It’s no secret that many were unhappy after the 2019 IPCPR trade show. The topic garnering the most attention at the time, was the announced CigarCon consumer day. After receiving significant pushback on multiple fronts, the IPCPR (now rebranded PCA) announced the cancellation of CigarCon. However, this appears to not have been the only conversations taking place.

What also was no secret is that many attendees of the trade show, retailers and manufactures alike, have been unhappy with the trade show and the IPCPR/PCA for many years.  Grumbling and threats of not attending have been heard for years.  Concerns have ranged from declining attendance and increased exhibiting fees to increased union-controlled setup/teardown costs and deaf ears at the PCA, although no significant actions have been taken by anyone; that is, until last week.

On Friday morning, January 10, all the negotiations came to a head when four manufactures, Altadis, General Cigar, Davidoff, and Drew Estate announced they would not be attending the 2020 trade show.  It just so happens these four manufactures hold the top four largest market shares in the US as well as the largest footprints on the trade show floor.  According to halfwheel.com, these four manufacturers accounted for 27,500 square feet of booth space at the trade show last year, equating to almost 20% of the available space, although the PCA stated in their rebuttal announcement over the weekend that the number was closer to 12%.  Whatever the percentage, the costs for these booths were not cheap and it will be revenue the PCA will have to do without if the space is not acquired by other exhibitors at the trade show.

Most problems, whether political, personal, or business, involve money, either directly or indirectly due to its involvement; this riff is no exception.  Yes, there are many issues and grievances at play, as stated above, but ultimately it is about the money.  If there is value in the trade show for the exhibitors, these other issues can be overlooked and/or worked trough.  But when the value of the trade show is no longer there, whether actual or perceived, these other issues become more difficult to look past.

Looking at the trade show arrangements and relationships, this discontent almost seems inevitable.  The PCA is an organization of and for retailers, founded to further retailers’ interests.  Working with manufactures seems to be a logical partnership, unless the manufacturers are funding the organization.  With a significant portion of the organization’s income being generated through the trade show (some would say almost 100%), and a very large portion of that coming from manufacturers exhibiting, this puts significant control of the organization in the hands of those that hold the purse strings.  So long as everyone is in agreement with the efforts of the organization and the direction it is going, all is well.  But when the two sides don’t agree, is it really any surprise that the cooperation stops?

According to the PCA’s response to the announcement, the trade show will not be impacted by these absences as over 110,000 square feet of exhibit space have already been spoken for and many exhibitors have contacted them to book their space, expand their booths, or move to a more premium location on the showroom floor.  Indeed, this is a break for opportunistic exhibitors to take center stage and expand their exposure and market reach.  While what the PCA says is undoubtedly true, the question is how true?  The PCA’s announcement sounds as if the trade show will actually be better with these four companies not in attendance, getting the show closer to the organizations’ roots of family owned manufacturers and mom-and-pop brick and mortar retailers.  On the other hand, this could be well crafted damage control designed to bolster a fading confidence from the organizations’ members.

What is going to come of this is anyone’s guess; but, whatever happens, it’s going to be good for the industry.  The large companies’ absence will allow them to allocate funds normally spent on and around the trade show to other areas to further their business such as retailer development, product development, and regulatory compliance.  With their resources, they will be able to continue to effectively market to their customers in other ways and will be able to continue to fight against FDA via other channels.  For the retailer, more time and purchasing can be given to companies at the trade show that they might not otherwise consider, broadening their offerings and perhaps picking up more boutique or limited offerings.  And, as previously stated, the other manufacturers will have more room to swim with the big fish not being in the pond.