The Tobacco Plus Expo (TPE) 2020 Trade Show took place in Las Vegas Nevada from January 29 to January 31 in Las Vegas, Nevada at the Las Vegas Convention Center. TPE has positioned itself as the first major tobacco/vape/alternative Trade Show of the calendar year. Many folks are familiar with the Premium Cigar Association (PCA)’s Trade Show held in the summer (formerly called the IPCPR Trade Show). The PCA/IPCPR Trade Show tends to focus on premium cigars and pipe products. TPE is broader in scope, also including vape, alternative and convenience store products as well as their accessories. In recent years, TPE has been putting an increased focus on the products that have been traditionally showcased at PCA/IPCPR – premium cigars and pipes.

TPE is hosted by Tobacco Media Group (TMG), which is a subsidiary of Kretek International focused on media and events. Kretek is a corporate entity that is focused on tobacco and alternative products. Among many of Kretek’s subsidiaries include Phillips & King (a distribution company) and Ventura Cigar Company (a premium cigar company). It differs from the PCA’s Trade Show which is run by a non-profit trade association.

With a focus around premium cigars, this year Cigar Coop attended this year’s TPE Trade Show. As we have done in the past, Cigar Coop offers its thoughts and perspectives around the show in this “Post Game Report”.

“Everybody’s Happy”

It might be relative compared to what was a down year for IPCPR in 2019, but for the most part (with a few exceptions), the words “Everybody’s Happy” could easily be applied – at least from the premium cigar side of the show.

Manufacturers and brand owners were happy with the overall trade show experience. Attendees seemed extremely happy, and cigar media had an excellent trade show experience.

There is some MMQB (Monday Morning QuarterBacking) we will do here – because that’s what we do. Overall TPE has to be incredibly pleased with their Trade Show – and specifically, the investment made on the premium cigar end.

TPE Show Observations & Analysis

1. Co-Existing with the Alternative Products

Essentially, TPE 2020 was two trade shows under one roof. On the left side were the tobacco exhibitors while on the right side were the vape, CBD, and alternative products. The left side of the hall had a red carpet for tobacco while the right side had a blue carpet.

Once upon a time, the PCA used to have alternative products at its trade show, most notably hookah products. These products were mixed with the premium cigar and pipe exhibitors. This didn’t work well and many retailers and manufacturers complained. There was the old school method of the cigar and pipe industry of making appointments for booth visits, while the alternative world used more aggressive tactics to drag you into the booth while you walked by. At TPE while the alternative products were separate, the aggressive tactics still existed. There was a little of it with the non-premium products, but I didn’t hear it as a major problem.

One thing that was clear was that the bigger, more elaborate booths were on the blue carpet side. Yes, Drew Estate, Villiger, and Phillips and King had massive booths, and Perdomo certainly had a top tier booth, but most of booths on the red carpet side paled in comparison to the blue carpet side. The blue side reminded of the elaborate structures of IPCPR. Taking the four companies I mentioned out of it, most were very simple – backdrops with a table, counter, a few display cabinets. Some used shared pavilion space (which is in the next section). In a way, the blue side reminded me of Beverly Hills, and the red side had more of a blue-collar urban-feel.

I’m not being critical of the smaller footprint. Given the costs with IPCPR/PCA over the past few years being an issue, I think most companies were looking to see if a scaled-down model would work for them. ROI (Return on Investment) was a big measurement for a lot of cigar companies, so costs to exhibit were heavily considered. Some of the alternative companies have more capital than the premium cigar companies, which is why there was a disparity. Many cigar brands told me the setup for them on the red carpet size reminded them of the old RTDA (predecessor name of the organization for IPCPR) Trade Show days and seemed very comfortable with it. As a premium cigar guy, I would love to see the industry I cover center stage, but that simply may not be the best choice economically. Personally I think the “back to simplicity of the old days” was an excuse more than anything to admitting many in the cigar industry cannot afford to do a trade show like PCA and TPE works better.

I did hear a few people complain about the alternative/vape product side being there. It’s important to remember that without the blue carpet exhibitors, it might not have been possible for TPE to offer the incentives they did.

2. The Pavillions

The Pavillions were essentially kiosks organized in a squareish area with some common seating in the middle. There were three of these on the show floor. The kiosks at each Pavillion provided a low-cost, turn-key (show up and ready to exhibit) booth. While it was quite appealing to the small companies, there were some medium to larger-sized companies (AJ Fernandez Cigars was the largest company in the Pavillion setup) in this area.

The Pavillions certainly had a professional look. While many of the manufacturers seemed pleased because it kept costs down, I wasn’t a personal fan of this setup. I found it very difficult to engage in conversations and I constantly felt on top of others at a booth. There was seating in the middle, but it was limited. Some retailers expressed a similar concern.

Still, I think the Pavillions provide an option for the smaller companies to exhibit product. I don’t envision them going away, but perhaps some tweaks to the common area would help.

3. ROI

I mentioned ROI (Return on Investment) before – and it was certainly the acronym I kept hearing over and over again from the premium cigar exhibitors.

I heard from some small and large companies that they didn’t write as many orders compared to those from an IPCPR Trade Show, and many said they didn’t have the mega-orders they get at IPCPR or a TAA Trade Show. On the other hand, at TPE 20 the topic of ROI came up quite a bit. The theme was that many companies found themselves in the “black” after day one. The lower cost booths played a huge role in achieving those goals.

4. The Foot Traffic

As I learned a lesson with the recent IPCPR Trade Show, there are two metrics to look at with attendance: actual attendance and foot traffic.

Actual attendance refers to the number of badges issued. Currently, at press time, we do not have the actual attendance numbers for TPE. Foot traffic refers to the number of people on the trade show floor at a given period of time. Since there wasn’t badge scanning for the Trade Show Floor, this became a more difficult thing to assess. My general observation is there were fewer people in a smaller show floor for TPE when comparing this to the IPCPR Trade Show.

As I stated in my Day Three Post Game report, I paid particular attention to the last 90 minutes of Day Three (the final day) of the TPE Trade Show. While there certainly were tire-kickers present during this time, there seemed to be increased ordering activity during the last 90 minutes This is what I had to say:


When the doors to TPE 20 opened for the final day, there was less foot traffic than there was on days one and two. That day, foot traffic picked up during the late morning/early afternoon before slightly reducing again.

I paid particular attention to the last 90 minutes of the TPE 20 and tried to compare and contrast it to IPCPR 2019. I used the method of looking at booth activity and foot traffic. There was little doubt in my mind the traffic activity at the final 90 minutes of TPE 20 was ahead of IPCPR 2019. This wasn’t just attendees hanging out in booths. While there still were some manufacturers who used the last 90 minutes to pack up, there were plenty of others that were writing orders.

Basically my unscientific assessment for the final day is that attendees didn’t pack up and go home. I’ve heard it from many retailers who go to PCA, they simply cannot afford to be there for four days. It’s not so much the travel costs as much as its the expectation that when a retailer visits a booth, that retailer is putting in an order – and retailers don’t have unlimited funds to spend on orders over four days. The three days makes it easier, and many cigar retailers told me that when they were done ordering, they could “explore” the alternative products on the blue carpet.

5. Customer Service

If there was a theme that came up over and over again, it was how TMG made everyone feel welcome. This goes from exhibitors, attendees, and media (see comments in the Answers to Pre-Game Questions section for more on media). Credit for this has to go to Ellie Hanson and Dawn Conger of TMG who simply did an amazing job. I’ll also credit Ben Stimpson and Antoine Reed of Tobacco Business magazine as well for making people feel welcome. All were present on the trade show floor asking everyone how things were going, what they needed, and what could the organizers do better.

TPE is run like a business, but there was a human element that made the difference with TPE. Building and maintaining relationships is something that the cigar industry has always prided itself on and TMG was very committed to this philosophy at its trade show.

6. Buy, Sell, Explore

I found his to be a significant slogan. Trade shows are all about buying and selling. If you don’t have buying or selling, you don’t have a trade show. Over the years, this has been the focus of the IPCPR/PCA Trade Show as well as TPE. It’s the word “explore” that was particularly of interest to me. While I think explore is something that goes on at both IPCPR/PCA Trade Shows, its the first time I’ve seen it in the messaging of booth shows.

With TPE growing – particularly on the premium cigar side, I believe the “explore” was to encourage tobacco people to visit the non-tobacco people – and vice versa.

As I mentioned above, the IPCPR/PCA Trade Show four days is simply too long for many retailers. The expectation of retailers at the IPCPR/PCA is that they are in buying-mode and not “hanging out.” While certainly many explore new brands, it’s still a high-pressure environment and retailers not buying are competing for time with retailers buying. As mentioned TPE is a buying show, however it is less pressure. It’s easier for many cigar retailers to cover the show in 3 days, and they always have the option to go over to the alternative “blue side.”

7. Star Power Absent

If there was one thing that differed from IPCPR is that TPE didn’t seem to have the level of cigar industry star power or main company stakeholders. There were some exceptions – Rafael Nodal (Altadis), Glenn Wolfson (Drew Estate), Christian Eiroa (CLE Cigar Company), Michael Herklots (Nat Sherman), and Jochy Blanco (IndianHead Cigars) were present, but many other names were not. I think there were several reasons for this. First, TPE is a newer venture to many premium cigar companies so I do believe some were looking to see what it was all about and control expenses.

TPE’s Tobacco Business Awards are one thing that encourages star power to attend (after all who doesn’t like to get an award in the cigar industry). Carlito Fuente and Pete Johnson were two winners of the Tobacco Business Awards. While they weren’t active on the Trade Show floor, they did come in to receive the awards they won.

In terms of non-tobacco industry celebrities, there was Karl Malone (Karl Malone Barrel Aged Cigar) and Tommy Chong (a CBD product) who were exhibiting products at TPE.

If the TPE Trade Show continues to grow, we could see more star power.

8. Where were Cigar Aficionado and Cigar Dave?

As far as I know, neither was at the show. I was quite disappointed as I thought both would be here. With 2020 being an important turning point for TPE for the premium cigar industry, I think both could benefit. People can be critical if they want, but both are long-time cigar media brands and in a way paved the road for guys like me.

Cigar Dave’s been pretty open about some of the things wrong with the IPCPR/PCA and I was most interested in his thoughts about TPE.

9. The Las Vegas Convention Center and Host Hotel

Three years ago when IPCPR moved to the Las Vegas Convention Center from the Sands Expo Center, you would think the sky was falling on Chicken Little. There didn’t seem to be many complaints at TPE on the Las Vegas Convention Center.

Yes, a few people complained (including this author) of the horrendous parking situation. There were some complaints of food prices, but overall there wasn’t the vibe that “TPE should move to the Sands” – which was the mood we heard in 2017 and 2018 while the IPCPR Trade Show was at the Las Vegas Convention Center.

The lack of venue complains could simply be that the cigar industry found a nice smoking language at the Casbar’s smoking lounge and bar at the nearby Sahara Las Vegas hotel. We all know how the cigar industry loves those places and the beverages served.

Answers to the Pre-Game Questions

The following were questions posed during our The 2020 Tobacco Plus Expo Pre-Game Report. With the Trade Show now in the annuls of history, it’s time to look at whether these questions were answered.

1. Is TPE Really Targeting to Overtake PCA?

The answer to this question is yes.

Incentives, a focus on premium cigars, excellent customer service, and an alternative approach are a big part of TPE’s strategy.  At the same time, I applaud the coopetition the PCA and TPE staff have had. However, I’ve been concerned about both organizations signing up exhibitors at each trade show.

PCA Executive Director Scott Pearce was a guest on the Prime Time Show in January and mentioned that PCA is looking at alternative venues and alternative times to hold its Trade Show. My question is what happens to TPE if the PCA Trade Show is moved up to the spring. It will create an even more competitive situation between the two trade shows – and my guess is a line will be drawn in the sand over which shows companies will attend.

The thing is this. I’m seeing as much competition as coopetition – and it raises flags in my book. If there were a plan for true coopetition, would a stronger alliance or partnership be formalized? I don’t see that happening with Kretek (TPE’s parent company) pulling out of the PCA Trade Show this year.

2. Will the Incentive Program Produce an Exciting Set of Products?

The answer for 2020 was No.

Yes, there were some new products, but there was not a lot that was compelling. There wasn’t any buzz of “hey did you check out company XYZ’s new ABC cigar?” Companies like Altadis, Rocky Patel Premium Cigars, and Villiger did have full lines released. However many companies focused on line extensions and value-priced cigars. Some companies even announced cigars that weren’t at TPE. In the end, I didn’t see attendees doing handstands talking about these new products.

I can see if TPE continues in an upward trajectory that the answer to this question will change. I believe we are two years away from that point.

The big question is whether or not Kretek (who owns TPE) can continue to offer incentives to not just manufacturers, but to retailers and media. It does not seem to be a sustainable model. From what we were told the incentives to manufacturers to bring new product were minimal (and some didn’t even know about it), but there were more substantial incentives provided to retailers including hotel rooms and gift cards. At some point, Kretek is going to want to increase their margins (and I don’t blame them). It will be interesting to see whether the incentives decrease over the next few years.

3. What About the Big Four Pulling Out of PCA?

It was very much a topic, but in the end I don’t think it impacted much at TPE. This aligned with my expectations I mentioned earlier on.

Of the four companies, Drew Estate has the largest size booth by a landslide. They have secured 1500 square feet plus a “Drew Estate Lounge Experience” on top of it. Davidoff of Geneva and General Cigar Company have secured 400 square feet each, and Altadis U.S.A. has 200 square feet.

I’m not expecting much of a change in terms of what is released at TPE.  Drew Estate and Altadis U.S.A. have made product announcements and its definitely fewer products than have been seen at PCA. At press time, General Cigar and Davidoff of Geneva have not made any product announcements.

 

Drew Estate had the largest booth of the big four at the show. The music was too loud (but it was much improved in terms of the music playlist). Meanwhile, the other three companies had smaller footprints. In the end, pulling out of the PCA Trade Show didn’t allow for much time to make changes.

Perhaps the most interesting thing was that Royal Agio Cigars, who is now owned by Scandinavian Tobacco Group (STG) had a bigger booth than General Cigar Company (who is also owned by STG). I believe this is because Royal Agio had been committed to TPE already. While Royal Agio is certainly known for its machine made products, there still was plenty of focus on its premium hand made brands (Balmoral and San Pedro de Macoris).

4. What Will Ventura Cigar Company’s Presence at the Show Be?

When I posed this question in the Pre Game Report, I said:

TPE is owned by Kretek International. Ventura Cigar Company is a premium cigar arm of Kretek. It has gotten some push over the past few years. There have been a couple of brand acquisitions, and the company brought in industry icon Michael Giannini to be Ventura’s General Manager. Originally it was sold by Phillips & King, the distribution arm of Kretek, but last year a decision was made to have Ventura utilize its own sales force.

Along the way, something was going on in Kretek. This led to layoffs within Kretek, and that hit the Ventura Sales force. It appears now Phillips & King would absorb Ventura sales responsibilities again. This has led to a lot of questions on the future of Ventura. While Ventura has stated it isn’t going anywhere, the questions are not going away.

Some think Ventura’s success is tied to Kretek’s commitment to premium cigars at TPE. I don’t think that is the case because Phillips & King sells a lot of cigars. If the commitment went down for cigars from Phillips & King, then I would be concerned.

Whether Kretek was in or out, I still think given Ventura’s problems from last year that TPE 2020 is going to be a litmus test for Ventura. On the positive side, Ventura has one of the more intriguing releases at TPE 2020 with the Archetype Master & Pupil – two releases coming out of the Joya de Nicaragua factory. On the other hand, there are still questions about Ventura’s future and because Kretek pulled out of PCA, it leaves TPE as the only major U.S. trade show Ventura will exhibit at.

For those who follow Ventura Cigar Company, there are questions: Will Foundry ever be integrated into the company’s portfolio? Are there more releases planned under the Cuban Cigar Factory brand? What is the future of the Case Study project? Will we see more projects from Indiana Ortez?

The bottom line: the more Ventura does at TPE, the more likely these questions will go away.

The answer was Ventura did not have a big footprint. It was pretty much relegated to a smaller kiosk in a large booth. The emphasis was on the tobacco products that Phillips and King distributed. On the surface it seemed that Ventura was a piece of the P&K puzzle – namely not only do they distribute leading products, but they distribute products they are developing themselves.

Michael Giannini and Indiana Ortez were working the booth hard. There were the two new Archetype cigars present. There was no Case Study on display, but Foundry Time Flies was available. The Ventura products also seemed to be moving well from the times I visited the booth. I didn’t hear one retailer say “what’s up with Ventura?”

One key point, a smaller presence of Ventura didn’t seem to impact anything in terms of Phillips & King. This was the busiest booth of the show throughout the three days of TPE 2020.

My conclusion: the downscaled presence of Ventura was noticeable to me. At the same time, I believe that’s exactly what it was – a downscaled presence. It gives Kretek an opportunity to execute in reset mode and continue to move forward with the brand.

5. What about Media at TPE 2020?

For years at the IPCPR Trade Show, online cigar media has been paying a price for the infamous blogger who went trick or treating at the 2010 IPCPR. Add the yellow journalism of the late Gary Arzt and online cigar media (who are called bloggers when things are awry) has been under the microscope for a decade. At TPE 2020, I didn’t hear one complaint that the bloggers/media were in the way or were there for the free samples.

I’m unapologetic when I say media has a right to ask for samples at a Trade Show. When it comes to new product, media needs to see, touch, and try it. IPCPR has a rule that technically bans media from asking for samples. This rule was put into place because of the sins of the Trick or Treater blogger of 2010. Cigar Coop has honored it, but I hate the rule. TPE has figured out everyone is an adult. I also believed TPE used more stringent criteria to issue credentials considering media incentives were offered, so that helped offset things.

I do wonder though if there is more product at future TPEs if complaints about (bleeping) bloggers asking for free samples will surface.

I mentioned above that there was an emphasis on customer service from TPE and how this carried over to media. A lot of comparisons have been made to media at IPCPR and problems with media at IPCPR. I discussed this in the pre-game report:


Over the past decade at the IPCPR Trade Show, there has been a perception of tension between the IPCPR and the online media. There was tension in 2019 when an ill-timed email was sent out to the media on the eve of the Trade Show strongly suggesting all booth visits be done by appointment and encouragement to conduct interviews off the trade show floor. Other than that, most of the tension I’ve seen with media and IPCPR have been isolated incidents between the organization and media outlets or general complaining about lunch tickets.

My conclusion here is that I don’t think IPCPR has mistreated the media, it’s that TPE is a part of TMG – which is in the media business. TMG is better equipped to serve the needs of the media – and that’s what we saw at TPE 2020.

Finally, it is important to mention the media room. This provided an excellent area for the media to either conduct interviews or get some work done in between booth visits. There were times the room was filled up.

Every year I hear suggestions of creating a “radio row” like the NFL has during Super Bowl week. Every year my reaction is the same – bad idea. There are certain times it makes sense to use a media room to conduct an interview. It made sense for me to use it when I interviewed Karl Malone because his company had a small booth. However, media needs to be on the trade show floor, seeing the booths, seeing the products, and capturing the vibe of the show. The media room is a great concept, but shouldn’t replace being on the show floor.

6. Will the Weather Play a Factor at Some Point with a January Trade Show?

Not a question for 2020, but with TPE 2021 scheduled for January 27 through January 29th, I’m still concerned at some point in the future, this Trade Show will be impacted by weather.

7. Who is Expected Not to Exhibit at TPE?

This stayed pretty accurate, here are some of the better-known companies that were not expected to be at TPE. This is not meant to be a complete list and a more comprehensive up-to-date list can be found on Developing Palates.

  • Ashton Distributors
  • Bombay Tobak
  • Cubariqueño Cigar Company
  • La Flor Dominicana
  • Leaf by Oscar
  • Quality Importers (XIKAR)
  • Quesada Cigars
  • Padrón Cigars
  • Recluse Cigar
  • SeiBel Distribution (MLB Cigar Ventures & Matilde Cigars)
  • Viaje Cigars
  • Warped Cigars

I did see a lot of brands not registered as exhibitors to the Trade Show “Walking the Floor.”

8. Is TPE a Viable Alternative to the PCA Trade Show?

With the hard work by TMG combined with the positive energy and feedback from many I would say yes. I still have some questions if the TPE Trade Show can continue to offer the incentives it does. TPE is not on equal footing with the PCA Trade Show, but its growing.

Certainly, I wanted to see more new products. The positive outcome for 2020 has people excited and looking forward to the 2021 edition of the Trade Show, so I think the launching of more new products will be an organic outcome of that growth.

Finally, I still do see TPE and PCA as being competition. Some may look at competition as healthy, but the next few years are going to be quite interesting.

The Daily Recaps

Photo Credits: Cigar Coop