Accessories: They're on a roll Roll-ups are back in fashion and at the heart of a £180m sector. Lisa Riley reports The £180m tobacco accessories sector is booming because of the high tax on ready made cigarettes which makes smokers seek out cheaper alternatives. In the past five years the sector has increased 45%, and growth looks set to continue. Currently, 29% of smokers ­ around 4 million people ­ make their own cigarettes. These include 1.4 million full time roll your own (RYO) smokers, and about 3 million who smoke both RYO and factory made cigarettes. As a result, the demand for papers, filters, lighters, matches, gas and lighter fuel and rolling machines is increasing. Price has played a big part in RYO growth, but it has also become a fashionable way to smoke, particularly among young adults. Paul Fallon, brand manager for Imperial Tobacco's Rizla, says: "Attitudes have changed and roll your own has become trendy. And that is helping to drive sales." RYO was once an all-male activity, but women are increasingly making roll-ups and industry estimates suggest as much as a quarter of all RYO smokers are female. For retailers, RYO products are a boon in a tough market because they offer an average profit margin of around 44%, compared with 7.5% on cigarettes. Papers do even better. Imperial says its Rizla papers average more than 50% profit. Papers are the largest chunk of the sector. Swedish Match says 390 million bookets,worth £78.5m were sold in 1999, a 15% increase over 1998. Rizla is the biggest brand, with 74% of sales, its green, red and blue Regular papers being its best-sellers. Swedish Match's Swan is steadily gaining share, with 21% volume sales up 12% year on year. A relative newcomer is leading US brand Zig Zag, launched in October 1997 and now at number three. In November it added red papers to its range. The company says it mainly supplies independents through wholesalers and cash & carries, but is now talking to the multiples. And commercial director Andrew Armstrong says a number of new products are planned for the coming year. Filters is the fastest growing segment, worth £17m, and growing 43% year on year (Albemarle Market Research). One in three RYO smokers now uses filters, a practice that's likely to increase according to Swedish Match trade marketing manager Duncan Kerr. "Filters are expected to become a standard RYO purchase," he says. SM's Swan is the leading brand with 77% share and its Extra Slim filters have captured 14% market share within a year of launch. On the back of all this activity, rolling machine sales are romping away. Imperial estimates growth at 60% annually, with 1.6 million machines sold every year. Around 27% of new entrants to the RYO sector use a machine and 13% of all RYO smokers always use one (Albemarle Market Research). The market is still small at £2.7m in value, but profitable. For example Imperial says sales of 10 regular Rizla machines will generate £6 in profit. Other areas are not so buoyant, notably matches which smokers are replacing with lighters. Disposables dominate the £45m market which is growing 9% year on year and led by Swedish Match (Cricket, Swan and Poppell brands), Imperial's Tokai and Clipper, and Bic, an international best seller. The strength of the accessories market lies in the independent sector because so many of the products are a distress purchase. Swedish Match says RYO smokers tend to be younger and socially active, so are more inclined to shop at c-stores and off licences. Zig Zag's Armstrong says independents offer the biggest choice, so benefit the most. "Supermarket ranges are smaller, which is reflected in low sales growth," he says. Manufacturers are putting more emphasis on merchandising as one of the best ways to increase sales. The recommended route is a RYO block on the tobacco gantry, placing papers and accessories next to RYO tobacco to encourage impulse sales. Rizla's Fallon says: "Case studies show considerable increase in sales when stock is merchandised effectively." {{FOCUS SPECIALS }}