Keeping smokers in the program. (Cigars).

While clubs have long been one of the last bastions of the beleaguered cigar and cigarette smoker, club managers are finding that they have to deal with increasing pressure from non-smokers in their membership and from legislative and regulatory pressures.

As this issue went to press, Missouri voters were being asked to approve a 55 cent per pack increase in the cost of cigarettes and a 20 percent increase in the tax on other tobacco products. In New York City, the city health commissioner reversed an earlier statement by Mayor Michael Bloomberg that private clubs would not be included in the proposed New York Smoke Free Act. The health commissioner said that the legislation--scheduled to be voted on sometime after mid-November--was designed to protect bartenders, servers, and other workers.

Admittedly, the days when many clubs had long waiting lists for "cigar dinners" are long gone. But the opportunity still exists to provide cigar smoking members and other smokers with an experience that meets their needs while respecting the rights of other members, guests, and staff.

Gerard Ezvan is president of F&K Cigar. Ezvan is both an importer of tobacco products and sundries from Germany, Italy, Spain, and the Dominican Republic, with national distribution and the proprietor of a respected old-line tobacco shop in St. Louis, MO. In the latter role, Ezvan services the cigar cases of some local St. Louis clubs. "The issue is there are fewer people consuming the products. We service every account that we can serve. The clubs are buying a little bit less. But it's still a lot better that it used to be prior to the boom. A lot of restaurants have given up. We're putting more high-end product on the shelves," Ezvan said.

Albert Armstrong, CCM, general manager of the University Club of Washington, DC remembers fondly the lavish cigar functions that were formerly held at his club. "There's been a big drop-off in cigars. There isn't the charisma about cigars that there was anymore," Armstrong said. "One of the things that we have found to be really successful here is to install smoke eater systems anywhere we renovate, so that smokers and nonsmokers can cohabitate peacefully. In our grille there used to be a light haze in the evening and now you have to try really hard to perceive it."

Armstrong has made changes in the manner and types of cigars that his club buys. "We buy from a several different sources--one locally and a couple by mail order. We have had success in the last five years in going with the larger brand names. We used to go with a couple of dollars a stick and presenting members with a four or five dollar cigar. Now we go with the larger brand and mark it up as little as possible so that it is perceived as member value. We used to double what we paid. It was not unusual to find good cigars at eight dollars and to charge 16, but that is not going to fly in this price-sensitive economy."

One relative newcomer to the club cigar market is offering club managers an opportunity to address member's price-sensitivity and to present tobacco products in a tasteful yet effective manner. Fuego Cubano, an international company whose U.S. operation is based in Van Nuys, CA, has operated a successful humidor program since 1997.

The difference in the Fuego Cubano program from other humidor programs is that the company manufactures its own humidors in several sizes, and services them with a staff of field representatives. The humidors, which range from roughly four feet wide by just under seven feet tall, to two feet wide by four feet high are made of solid oak with tempered glass doors and electronic humidification systems.

"Any club who wants to showcase our cigars has usage of the humidor based on the product they agree to buy," said Roger Padayao, director of product development. "They have to sell our product on the first two or three shelves. They can put anybody else's products on the shelves." Fuego Cubano markets Dominican filler Sumatra wrapper cigars in several flavor profiles under the "Companion" name, as well as flavored cigars--"Single Sweets," an affordable, noticeably sweet smoke and "OTP," a premium flavored cigar--and hand rolled cigarillos.

Company founder Alex Nehorayan developed the latter product, which Fuego Cubano calls "Cigets." Prepared like cigarettes but hand-rolled like cigars, Cigets are made from the same high quality, chemical-free tobacco as Fuego Cubano's cigars. Cigets are available in flavors like Swiss chocolate, Virgin Island rum, vanilla hazelnut, coconut, and cinnamon.

"Taxes are raising the cost of cigarettes--people are going to the alternative of flavored cigars or cigarillos," said Nehorayan. He believes that by giving smokers new and different alternatives at several price points, a club can continue to service the smoking population of its membership.

While smoking is no longer the ritual-rich event it was at clubs just a few years ago, careful attention to merchandising of tobacco products and an effort by managers to recognize the preferences of both smokers and non-smokers can pay off peaceful coexistence and increased sales.