What would be nice to see is C & D purchase and relocate the steam presses of Mac Baren to their facility. Then we would see a whole new iteration of pipe tobacco.
Scandinavian Tobacco Group A/S to acquire Mac Baren Tobacco Company A/S
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The Chairman's Report was a very enlightening read. Thanks for the post.I'm a curious cat.Has anyone dug into the online file cabinet of STG? I thought the Chairman's Report on April 4th of 2024 contained a good directional nod in how they might play their hand shaping things. Pages 3, 4, 7 & 8 were most interesting.
In brief, the report was about meeting climate sustainability numbers and increasing mechanized industrialization of cigars while pushing further into the Global Next Generation Tobacco Products Market. There was nothing in their literature that pointed to focusing on pipe tobacco other than acquiring existing real estate and putting profits towards their goals mentioned above (it seemed to me). GNGTPMs from what I could find are:
Global Next Generation Tobacco Products Market, By Device Type (e-Cigarettes, Vaps, Mods, e-Hookahs, Pens, Other), System (Open Vaping System, Closed Vaping System, Semi-Closed System, Other), Product Type (Tobacco Heating Products, Vapour Products, Snus Products, Other), Component (Atomizer, Vape Mod, Cartomizer, E-liquid, Battery, Other), Age Group (18-30 Age Group, 31-44 Age Group, 45-60 Age Group, 61 and Above Age Group), Distribution Channel (Online Buying, Retail Stores, Convenience Store, Drug Store, Newsstand, Tobacconist Store, Specialty E-cigarette Store, Other), Country (U.S., Canada, Mexico, Brazil, Argentina, Rest of South America, Germany, France, Italy, U.K., Belgium, Spain, Russia, Turkey, Netherlands, Switzerland, Rest of Europe, Japan, China, India, South Korea, Australia, Singapore, Malaysia, Thailand, Indonesia, Philippines, Rest of Asia-Pacific, U.A.E, Saudi Arabia, Egypt, South Africa, Israel, Rest of Middle East and Africa) Industry Trends and Forecast to 2028. Resource: Next Generation Tobacco Products Market – Global Industry Trends and Forecast to 2028 | Data Bridge Market Research - https://www.databridgemarketresearch.com/reports/global-next-generation-tobacco-products-market
Among the information is the very telling forecast for growth in their different product endeavors. Next Generation Tobacco Products are seen to have room for marked growth, while cigars and smoking tobacco are seen as flat or no growth. Given their focus on sustainable growth I would take this to indicate that they will be gradually moving away from cigars and smoking tobaccos and more toward Next Gen products in the coming years, to improve profitability in changing and developing markets. Simplifying operations being a core mandate, simplifying the range of products will necessarily be part of that process.
I would not be surprised if the offerings in the pipe tobacco area were reduced or sold off to another manufacturer. In any case, nothing in the report refers to producing the highest quality as a goal.
This is what I was thinking towards as well. The entire food industry has been altered in the same way. BlackRock and Vanguard are the majority shareholders for the handful of global corporations that have bought up virtually all of the food-branded companies in the US market...even most of the niche market of organic products. Then there is the push for ESG investing and factors into the stock market. Then quietly over time, the corporations add more and more cheaper ingredients to food products, more chemicals etc.
Increasingly I find it difficult with how to spend my dollar in every direction. Stick to my guns and spend more for the hand-crafted as a quiet boycott of the corporate oligarchy? Or save money with the industrialized version for a larger quantity that mostly only the corporate oligarchy can provide? I would love to shop every week at the farmers market and support local farmers...but the prices are mind-numbing and I cannot feed my family this way.
Then there is the cultural angle. Change the culture, change the market (something corporations, governments and media are very familiar with). I just do not see the same level of commercial push in the tobacco market with traditional pipe smoking like I see with next gen products. Yet here I am, a new gen X pipe smoker looking for my next batch of tobacco samples to try and new potential pipes for my pipe collection. I have hope for a renaissance of the hand-crafted.
Yes, someone get Sykes Wilford to see this. They should buy some of that flake manufacturing equipment from STG if they close the Mac Baren factory.
Mac Baren's best sellers in the US in recent years are all the creations of Per Jensen. They owe him for whatever market share they still have under the Mac Baren label.
I think they did make a smart move some years ago buying the Capstan, Three Nuns and St Bruno pipe brands. STG would be fools to change those blends (recall STG produced Capstan and Three Nuns in the Assens factory as recently as 2011.)
Another line Mac Baren did a great job with is Amphora. Those pouches contain high quality broken flake at a great price. I have some Full Aroma jarred up. Not sure how long the casings will last.
My favorite Sutliff blend is 507C Va Slices. I'm not sure who produces it. There is some thought that it is made in Denmark.
I hope someone from the industry with answers to these questions will post here at some point.
I think they did make a smart move some years ago buying the Capstan, Three Nuns and St Bruno pipe brands. STG would be fools to change those blends (recall STG produced Capstan and Three Nuns in the Assens factory as recently as 2011.)
Another line Mac Baren did a great job with is Amphora. Those pouches contain high quality broken flake at a great price. I have some Full Aroma jarred up. Not sure how long the casings will last.
My favorite Sutliff blend is 507C Va Slices. I'm not sure who produces it. There is some thought that it is made in Denmark.
I hope someone from the industry with answers to these questions will post here at some point.
Sutliff 507C is made in Denmark (the 5lb bricks say so on the label). I believe Mac Baren makes it (they own Sutliff)
Maybe it’s time for serious pipe smokers to stop buying STG products.
After all the smaller vendors have a hard enough time surviving in this small niche market.
Don’t we all believe maybe it’s time to really put our money in the small guy/gal?
KBV
kbven.com
L.J. Peretti
ljperetti.com
The Country Squire
www.thecountrysquireonline.com
Uhle’s
Watch City Cigar
watchcitycigar.com
Wilke Pipe Tobacco
www.wilkepipetobacco.com
And all the other small B&M!
P.S. Here’s Gawith, because they’re not exactly STG sized.
www.gawithhoggarth.ltd
After all the smaller vendors have a hard enough time surviving in this small niche market.
Don’t we all believe maybe it’s time to really put our money in the small guy/gal?
KBV
KBV – Ken Byron Ventures
kbven.com
L.J. Peretti
L.J. Peretti / Est. 1870 / Boston, MA
L.J. Peretti, established in 1870 in Boston, carries a wide assortment of cigars, pipes, and imported and custom blended tobacco.
ljperetti.com
The Country Squire
Home - The Country Squire Tobacconist
Early Father’s Day Sale!May 28 – June 1stShop Now Shop Now! Shop the Collection Squire Tobaccos Cigars Pipes Squire Accessories & Merch A curated collection for the discerning pipe and cigar smoker Our team of knowledgeable tobacconists are here to guide you on your journey to finding your next...
www.thecountrysquireonline.com
Uhle’s
Uhle Tobacco Company
Welcome to Uhle Tobacco Company, a full service tobacco shop located in downtown Milwaukee, Wisconsin. Through our retail shop, online store and mail order business, we have been serving our loyal customers since 1939. Feel free to browse our site, and if you're in town: visit us. We are a true...
uhles.com
Watch City Cigar
Watch City Cigar & Pipe - Pipe Tobacco, Cigars, & Pipes at Great Prices
Watch City Cigar & Pipe is more than an online pipe tobacco and cigar sales website. Our physical store has tens of thousands of pipes and tobaccos, as well as robust custom ordering for hard-to-get smoking items.
watchcitycigar.com
Wilke Pipe Tobacco
Home | wilkepipetobacco
www.wilkepipetobacco.com
And all the other small B&M!
P.S. Here’s Gawith, because they’re not exactly STG sized.
HOME | Gawithhoggarth
www.gawithhoggarth.ltd
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Any good straight Virginia rec’s from Country Squire or Wilke that are bright and sweet? I wanted to like Peretti’s, but I can’t get past the soapy taste…Maybe it’s time for serious pipe smokers to stop buying STG products.
After all the smaller vendors have a hard enough time surviving in this small niche market.
Don’t we all believe maybe it’s time to really put our money in the small guy/gal?
KBV
KBV – Ken Byron Ventures
L.J. Peretti
L.J. Peretti / Est. 1870 / Boston, MA
L.J. Peretti, established in 1870 in Boston, carries a wide assortment of cigars, pipes, and imported and custom blended tobacco.
The Country Squire
Home - The Country Squire Tobacconist
Early Father’s Day Sale!May 28 – June 1stShop Now Shop Now! Shop the Collection Squire Tobaccos Cigars Pipes Squire Accessories & Merch A curated collection for the discerning pipe and cigar smoker Our team of knowledgeable tobacconists are here to guide you on your journey to finding your next...
Uhle’s
Uhle Tobacco Company
Welcome to Uhle Tobacco Company, a full service tobacco shop located in downtown Milwaukee, Wisconsin. Through our retail shop, online store and mail order business, we have been serving our loyal customers since 1939. Feel free to browse our site, and if you're in town: visit us. We are a true...uhles.com
Watch City Cigar
Watch City Cigar & Pipe - Pipe Tobacco, Cigars, & Pipes at Great Prices
Watch City Cigar & Pipe is more than an online pipe tobacco and cigar sales website. Our physical store has tens of thousands of pipes and tobaccos, as well as robust custom ordering for hard-to-get smoking items.
Wilke Pipe Tobacco
Home | wilkepipetobacco
And all the other small B&M!
I haven’t smoked any Straight VAs from them…
Now @JimInks I would think is the Wilke man around here that would know. OH JIM! LOL
But Watch City I believe has that going on…
Hmm Peretti’s VA soapy? That doesn’t sound right, did you purchase some of their VA flakes?
Flake - L.J. Peretti
FLAKE TOBACCO: Flakes are blends of predominantly or entirely matured Virginia tobaccos that have been pressed and cured into cakes and then sliced. This process makes for a slow burning tobacco with a rich, full bodied smoke.
ljperetti.com
I occasionally smoke Wilke Back Bay without perique. It's a few grades of bright and gold Va. Rather mild, burns easy, and is one of my work smokes. It's not on the menu so you have to ask for it.I haven’t smoked any Straight VAs from them…
Now @JimInks I would think is the Wilke man around here that would know. OH JIM! LOL
But Watch City I believe has that going on…
Hmm Peretti’s VA soapy? That doesn’t sound right, did you purchase some of their VA flakes?
Flake - L.J. Peretti
FLAKE TOBACCO: Flakes are blends of predominantly or entirely matured Virginia tobaccos that have been pressed and cured into cakes and then sliced. This process makes for a slow burning tobacco with a rich, full bodied smoke.
Ampersand Flake from LJP was the one that seemed like it would best fit my preferred flavor/profile, but alas I didn’t even finish the 1oz sample. I tried it in about 6 different pipes, most of which were freshly cleanedI haven’t smoked any Straight VAs from them…
Now @JimInks I would think is the Wilke man around here that would know. OH JIM! LOL
But Watch City I believe has that going on…
Hmm Peretti’s VA soapy? That doesn’t sound right, did you purchase some of their VA flakes?
Flake - L.J. Peretti
FLAKE TOBACCO: Flakes are blends of predominantly or entirely matured Virginia tobaccos that have been pressed and cured into cakes and then sliced. This process makes for a slow burning tobacco with a rich, full bodied smoke.
Same soapy taste…
Ampersand Flake from LJP was the one that seemed like it would best fit my preferred flavor/profile, but alas I didn’t even finish the 1oz sample. I tried it in about 6 different pipes, most of which were freshly cleaned
Still doesn’t sound right, it’s suppose to be a Straight VA. I would just call them, and call Ernie too at Watch, hell call them all while your at it.
They’re all friendly to chat with…
Ampersand Flake
updating via yoast
www.tobaccoreviews.com
If you ever have to give a one word answer to the question of who owns the world, Vanguard would be as close as you're going to get. It's the single largest shareholder in the Borg that is Black Rock.
Depending on whether you’re looking at assets under management or assets under administration the pecking order varies but in any case Fidelity, Schwab & Vanguard are the big three in America.
Im gonna have to agree here. When you are moving that kind of cash and have stockholders it simply makes no sense to increase your bottom line when your audience does not grow. My guess is if its popular it will stay. If not it will go. Evenutally they will consolidate production. Sadly, it just makes sense from their perspective.
I will say the economics don’t suggest any compulsion to sell. Mac Baren’s EBITDA was over $12 million, and unless the family had grossly over leveraged it they had a cash machine with steady (if perhaps gradually declining) revenues. That kind of profitability will support substantial dividends to the owners. My guess is they were simply ready for an exit. In cases like this generational transitions are often the proximate cause.
As for a generational transition, from what I can tell the last direct descendant of the family which ran the business for 134 years passed away in 2021. The breakage of such links often precipitate liquidity events. But that’s just an observation. Mac Baren is a private company and I have no real idea about the inside story. I will say the new CEO (previously COO) is an MBA or equivalent. Taking that into consideration it’s unsurprising to me that the company was sold a couple of years after the last family member running it died. The only surprising thing to me is the valuation; a bit over 6x EBITDA for a company of this size bought by a strategic player is close to dirt cheap. As woodsroad noted the synergies in this transaction are material and easily achieved. An aggressive strategic buyer would be looking at gross profit, not EBITDA, and determining how much of it could be made to stick to them after consolidation of operations and general overhead.
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Maybe the seller is anticipating that being tobacco manufacturer in EU is not going to be easy in the future.
And the market for pipe tobacco is not growing.
And the market for pipe tobacco is not growing.