CTC Offers Breath of Fresh Air in Tobacco Market

By Angela Altass

CTC is a feel-good story about a Canadian tobacco company that is succeeding in a difficult market, says National Sales and Marketing Director Stéphane Bouchard.

“We are very good at what we do and our product is excellent,” says Bouchard. “We are a 100 per cent Canadian tobacco manufacturer. We sell cigarettes.”

Although tobacco is a fragile market, CTC, also known as Century Tobacco Company, is seeing success by lowering prices and increasing customer service.

“Yes, tobacco is a shrinking market but our sales are growing exponentially,” says Bouchard. “Tobacco is still a vibrant industry. You have to be professional and do business in a way that keeps the tobacco out of the hands of under-age consumers. I think the government is doing a good job of making sure that we are not creating more smokers but we want to make sure that the smokers who are out there are buying legal products and that retailers can make healthy profits selling those products.”

Tobacco holds an important place in the convenience store industry, states Bouchard.

“We have a small, humble plant in Summerstown, Ontario,” says Bouchard. “Our plant is growing while some of our competitors are closing plants. I’m not out to attack the big tobacco companies but this is a David & Goliath story. We are changing things. We are encouraging manufacturing in Canada and showing that we are able to win in a game that is being played with big conglomerates.”

The CTC story started in the 1980’s.

“We were actually manufacturing products for other companies,” says Bouchard. “We decided six or seven years ago to start our own line of premium super value cigarettes and get more directly involved with the retailers so we could control our brands, volume, pricing, and have our own strategy. Our distribution is a collaborative effort utilizing both wholesale and direct-to-store delivery networks. We sell to both independents and chains.”

CTC has been a breath of fresh air in Ontario’s highly regulated and challenging tobacco market, says Kenny Shim, president of the Ontario Convenience Stores Association (OCSA) and owner of Busy Bee King Mart in Toronto, Ontario.

“Unlike dealing with the big three tobacco companies, CTC makes it straightforward for retailers with just a few SKUs all positioned at the lowest price point,” says Shim. “What’s notable is the absence of restrictive rules on selling or pricing their products, giving retailers much-needed flexibility to adjust to market demands and customer needs. Given Ontario’s market situation, where illegal tobacco products are alarmingly accessible at a fraction of the legal product prices, CTC’s low-cost option with healthier profit margins is refreshing and beneficial. It allows retailers to sustain a competitive edge and cater to customers who seek value without dealing with the hurdles imposed by the major players.”

Consumers have been looking for a less expensive brand of cigarettes, which makes CTC an attractive option, says Bouchard.

“We are a family business,” notes Bouchard. “We are cost efficient and are able to get to retail cheaper. People are trying to save money and when they see that our brands are cheaper, they are willing to give them a try.”

Tobacco in Canada is highly regulated and the market is very restricted and difficult to get into, says Bouchard.

“You have to be well organized in your abilities to communicate with the government and understand regulations at all levels from packaging to product quality and distribution,” says Bouchard. “You need a lot of financial capital and you need a lot of knowledge about how to do things properly. Because it is very regulated, it closes the door to a lot of would-be entrepreneurs.”

Reinvigorating tobacco is important to the convenience industry, says Bouchard.

“At CTC, we’ve revitalized the tobacco segment for convenience channels, enabling retailers to increase profitability while offering competitive prices,” says Bouchard. “If we can bring down the price, we are able to put more profit in the pockets of the retailers and also maybe curb contraband tobacco.”

CTC is excited about the future as retailers of all sizes are taking note of the company’s brands: Platinum, Darts, Rally and Santa Fe.

“We want to support the independents with credit, easy distribution, lower minimum orders, and higher fill rates,” says Bouchard. “It’s easy to open an account with us and you don’t have to sign a contract. Some of the tobacco company contracts can be hard for the small mom and pop shops to understand. There are no hurdles to jump with us. You can try selling our products and just see how it goes. With the support of convenience retailers across Canada, CTC is poised to become the third-largest tobacco company in the country, currently available in all provinces except New Brunswick and Quebec.”

Instead of selling a pack of cigarettes for $17 in Ontario, for example, retailers can sell a pack of CTC cigarettes for $12.50.

“Our volume is through the roof,” states Bouchard. “We’re selling thousands of cartons of cigarettes every day. We are not here feeding stockholders. We are changing the existing formula of big tobacco companies. We are revolutionizing the tobacco industry coast-to-coast and we are very proud of that.”

Retailers interested in further information can register with CTC by visiting www.centuryt.com, calling 1-888-926-2522, or emailing info@centuryt.com.

 

Convenience & Carwash Canada spoke with several businesses regarding CTC Tobacco.

Here is what they had to say:

Kenny Shim, owner, Busy Bee King Mart, Toronto, Ontario: Ordering from CTC Tobacco is simple and efficient – one phone call with prompt delivery, no high minimum orders, and no red tape. This contrasts sharply with the major companies, each of which has policies that retailers must follow to access better pricing, which can be quite demanding and restrictive.

Brydon Giesbrecht, category manager, Fields Canada, Vancouver, British Columbia: Century Tobacco has been a fantastic company to work with so far. We have them currently in 30 locations in Alberta and British Columbia. They are progressive and ahead of the curve when it comes to tobacco regulations and legislation. The price point is exceptional. They’ve been good with helping us understand the processes that need to take place for doing price changes, etc.

Their customer service is second to none. I really appreciate their forward-thinking, honesty and integrity.

At first, to be honest, there was some trepidation with customers because they hadn’t really seen these brands before but once customers tried them, they kept coming back for more.

Sean Casey, category manager – pet, tobacco, Giant Tiger Stores Limited, Ottawa, Ontario: We are currently just chatting with Century Tobacco Company about assortment in our Giant Tiger stores. We have yet to confirm anything and have none of their products in our stores. I look forward to more positive conversations in the future with Century Tobacco.

What I can say, based on the products they proposed and where they fit in the market, is that they would be positive disruption to legal tobacco sales. Their competitive, market low costs would allow retailers to retail these products well below normal and give retailers more profitable sales.

Vince Commisso, owner, MVR Cash & Carry, Oakville, Ontario: CTC has been very aggressive in building an alternative option to the big three tobacco manufacturers. They value the wholesaler as an option to get their products distributed to the retailer. They have a great sales team that connects with the customer.

CTC offers a quality cigarette at a very attractive price point. Our customers continue to demand value in today’s tough economic times. Their products are always in full stock with the freshest codes. MVR is working closely with CTC to promote their brands and help retailers get CTC products on their shelves.

Fawwaz Mlatoom, owner, Mobil Convenience, Ottawa, Ontario: The experience with CTC has been very good. Customers like it because the cost is good. Customers are coming back and buying it again. The company is easy to deal with. It is easy to place an order and I receive it within the second day. I would recommend it to everyone.

Rachel Robinet, general manager, UPI Energy Convenience, Seaforth, Ontario: It’s been great. They offer affordable smokes and good customer service. They reach out to me to see if I need anything on a regular basis. The cigarettes seem to move well here and the price absolutely makes a difference. We’re able to put a bigger margin on them so we can make a bit more too, which is nice.

John McCash, owner, The Smoke Shop, Cambridge, Ontario: CTC Tobacco have been really good. Customers are responding to the lower cost. It’s a better product at a lower cost. They’ve got a really good product and they made it possible that their prices are basically the lowest in the industry so it works for them and it works for us.