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Summer, 2007

Neos: The Growth Machine
By Jonathan Bell
With a resurgent turnaround for a sleepy brand that was nearly retired, Holland’s J. Cortès cigar company has become a surprisingly significant force in mini cigar markets throughout the world.

The J. Cortès cigar company has seen steady growth for the past several years, so it is no surprise that it continues to expand its global sales and marketing efforts. What is particularly noteworthy, though, is the new wave of growth this privately-owned company is so ably riding alongside its larger competitors.

Despite a far-flung presence in cigar markets worldwide, J. Cortès remains very much a Belgian company with a stubbornly Flemish outlook in embracing the smoking style of so-called Dutch cigars. The company’s premier line bears its own name, and the famed “deep water” blue design of the J. Cortès product line is well known, an innovative, bold stroke of marketing genius when it first appeared on shop shelves (at the time it was commonly held that one could not sell a tobacco product packaged in such a sensual tint of blue). 

Neos too has long been a J. Cortès brand of its own. The lesson learned from the story of Neos could be summed up as “beware of throwing out what might appear to be worn out, older trademarks.” With the right push at the right time they just might come back to a vibrant new life. This is what happened with Neos.

In recent years, this trademark has burgeoned into several lines of minis, from Neos proper to Neos Feelings, Fuego, Tipi, Neos Exotic, and the new Neos Chiwawa. Each of these Neos lines has a variety of mini cigar entries and include natural, flavored, and tipped varieties. Each also comes in a host of packaging formats and sizes. There are some 30 different Neos entries in all.

A distinctive feature of Neos is the slimness of its “mini-mini” version, delivering a truly quick, affordable smoke when time is short. Another feature is that J. Cortès products are 100% tobacco cigars.

The success of the Neos mini-minis echoes the trend among smokers across international markets. In France, for example, the mini-mini cigarillos market now accounts for 11% of all French cigar sales.

Neos has also been among the market pioneers in flavored cigarillos. Neos ‘madness’ has in part been built on the great success of its vanilla-flavored entry, already the best selling extension in the brand family. One can also smoke a cappuccino, chocolate, mango, or cherrry Neos, not to mention menthol which is relatively unique in the cigar category. There is also a Neos classic ‘Wilde’ format featuring an uncut, “shaggy” foot.

All in all, dusted off and put out on the global tobacco market with bold new entries, the Neos minis have become J. Cortès’ rising star, and now represent 25% of the company’s business. Neos has seen serious sales expansion in the past in France and Spain, and those markets remain stable for the brand. Now it is seeing serious new growth in the United States, Canada, Italy, Greece, Russia, Poland, Hungary, the Czech Republic, Japan, Malaysia, and Thailand.

In fact, exports—not only for Neos, but for the J. Cortès line itself—are thriving, posting an increase of about 70% over the past four years. This performance is good timing, as the company’s strong traditional market position in Belgium has suffered recently with the new smoking ban imposed there. Belgians are notoriously fond of fine cuisine, wine, and a cigar to go with it. The ban in restaurant consumption has therefore been a problem for sales. Nevertheless, J. Cortès sales are up overall in the first quarter of 2007.

Never idle, J. Cortès launched a new cigar family in 2005: Amigos. The brand has reportedly done exceptionally well in France and Spain, particularly during 2006. In Italy, Amigos has seen soaring sales and already ranks in eighth position overall on the Italian cigar market.

According to Yves Goemaere, Export Manager for the company, cigar markets almost everywhere are now being defined by price, flavors, size (small to mini-mini) and filters.

But fine big cigars are also a class act at J. Cortès. The company’s line of hand-made cigars from the Dominican Republic range from a robusto to a lonsdale size. This flagship line also includes the Belgian-made J. Cortès classic cigarillos, sold around the world, plus J. Cortès Premium Minis and Premium Light Minis.

Tobacco Products International - Summer, 2007
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