Takes its ‘Shot’
Creative upstart manufacturer relies on quality products made in America and works hard to effectively address the difficult regulatory landscape to the benefit of the entire industry.
By Joe Finora
does a relatively new tobacco company achieve real success in the difficult world of today’s tobacco marketplace? Cheyenne International is a new breed of manufacturer that has risen from the south and quickly spread throughout the country. But more importantly, it hasn’t shied away from Washington, D.C. - diving headstrong into critical industry issues.
Cheyenne International is making waves by providing exciting top-rate products with a creative approach to the marketplace and a top-notch management team to match.
To this point, Cheyenne’s story is a relatively brief but striking and singular one. The company, led by Bill Greiwe - a business consultant turned tobacco entrepreneur - started by offering a high quality cigarette at a fair price as an alternative to the major brands. Not only has the market changed considerably since their launch in 2002, but so has Cheyenne, adjusting from a competitive, regulatory, and production standpoint to address marketplace issues and take advantage of opportunities. As it did, it took Greiwe and his team on an odyssey that only the tobacco industry could provide.
Headquartered in North Carolina in the heart of American tobacco country, Greiwe has been very active in lobbying efforts against legislation that he argues harms the tobacco industry in general and especially the smaller players. He feels that a strong lobbying effort will be an important part of Cheyenne’s strategy going forward. In fact, he feels that many laws and regulations that have been promoted by large tobacco companies to the detriment of other manufacturers, wholesalers, and retailers - as well as the vendors who sell to them - are inappropriate and border on the unethical. Laws and regulation that seek a level playing field are one thing, but laws such as the Master Settlement Agreement (MSA) which appear to promote monopoly and raise significant barriers for some but not all are another, notes Greiwe. Cheyenne has become adept at traversing the minefield of regulation and its approach of working closely with customers, vendors, and even regulators and competitors to create rational, workable regulation is in stark contrast to the approach of other manufacturers who seem to be actively working to create an advantage only for themselves. Of course the history of American business is a “heroic” tale of overcoming great odds and along the way redefining the landscape. Cheyenne’s goal is to set a new standard in the business.
Alternative to the Majors
Before kick-starting Cheyenne into high gear, Greiwe had advised another small tobacco company. Drawing on that knowledge, he and a group of partners set out with determination and imagination to build a new kind of tobacco company - one that would be focused on their customers’ success and actually remain friendly with retailers, wholesalers, and smokers alike. “I saw firsthand how disappointed nearly everyone at each part of the chain was with how the major tobacco companies were treating them in the course of doing business,” recalls Greiwe. “Satisfaction was at a definite low. There had to be a better way to run a tobacco business and the answer, in my opinion, was not difficult to understand or implement.”
He had been down the start-up business road before as a consultant. He knew any start-up is a risky venture, especially in a highly consolidated industry. A small “David-type” tobacco company wishing to carve out a niche in a land dominated by the giant “Goliaths” was a tall order. But by sticking to his basic principles - quality products at a fair price and respectful and favorable treatment of retailers, wholesalers, vendors, employees, and regulators, with a healthy dose of hard work - he decided to move Cheyenne from the drawing board to reality. “In many ways we were simply applying our personal principles to our business,” he notes. “We try to provide all who work with us a safe harbor in the storm. Cheyenne seeks to be a leader and an innovator but so often it just boils down to having a positive working relationship with those you conduct business with, working together to create success.”
Cheyenne prides itself on developing exciting new products. They include Cheyenne premium blend cigarettes, which was the company’s initial product, and Decade cigarettes, a discount brand that Greiwe says is doing well. 901’Z is a menthol cigarette with a hip, urban image; Cayman is the manufacturer’s all-natural product; and Cheyenne roll-your-own (RYO) is targeted at the growing legion of do-it-yourselfers looking for a premium affordable smoke. The company has experienced relatively quick success with its little cigar brands, most notably Cheyenne and Derringer, which sports a Western-style gambling motif. Its new Bodyshot brand of little cigars has already exceeded expectations. Introduced at the 2008 Tobacco Plus Expo in April, Bodyshot cocktail-flavored little cigars come in four types: Sangria, Rum and Cola, Trance, and Mojito. “The packaging and product was a real hit with retailers weary of the predictability reflected in many products in the industry,” says Greiwe. “As Cheyenne’s marketing proclaims: ‘Everybody Deserves a Shot!’” And many are taking a shot at Cheyenne’s products.
Greiwe notes that its little cigars have been “well received” by retailers and smokers alike; a “viable alternative for cigar smokers who want a pleasurable cigar experience but don’t have the time for a large cigar. Also our product is a fair value for the price.” These attributes, in addition to the top-quality blends that make up the products, continue to win over customers and retailers with Cheyenne’s products which are now available in 49 states. Exports are also on the rise for the company which does not disclose sales as it is privately held. Greiwe does acknowledge however, that the sales curve is “moving in the right direction” and “all our categories are growing,” he expects it to continue to do so as word of Cheyenne spreads among retailers and smokers.
Cheyenne relies on a small but dedicated sales force which spends most of its time on the road meeting with retailers and offering to help them grow their business with a successful product line and an enthusiastic partner. Understanding that shelf space in this industry has become something of an endangered species, the Cheyenne sales team is armed with a full range of point-of-sales materials and proven strategies based upon extensive industry experience. The company is active at industry shows and efforts are supported by print ads in trade publications which are also helping to get the word out.
“We care about how we conduct business, who we are as a company and who we work with,” Greiwe says with passion. “We want to create value for our customers. Many are finding our approach to business refreshing.” To that end, the company refuses to sell its products through any other means than its retail channels. It does not engage in Internet or web-based sales, nor does it sell product via mail order. “Our company does not have a consumer catalog or a website for the purpose of selling product. When customers do call, email, or write to us and ask where they can find our products we direct them to the appropriate retailer,” he says.
Fighting the Good Fight
As if starting a new tobacco company is not a big enough challenge, Greiwe has also been very active in fighting excessive tax hikes on tobacco products as well as other government intervention which he believes is unfair or misguided and further inhibits fair trade and growth of new business. He believes that the tobacco industry is being shortsightedly marginalized at a time when participation by industry players - in an effort to achieve effective regulation that advances common goals that many in the industry actually share - exclude some players. This approach, Greiwe contends, will yield unintended consequences and regulation that is burdensome to all - including regulators - while not being effective in the end.
He and his lobbyist representatives, and trade associations that Cheyenne belongs to, are actively engaged in all of the ongoing fights over tobacco issues. “Common sense is in short supply and when activities shade towards dysfunctional and specifically beneficial to one company it becomes arguably unethical,” he says. He does his best to keep the “rational perspective” in front of Congress and urges everyone else in this business to do the same thing. “As difficult as it is with over-regulation and excessive and highly regressive taxation and our increasingly negative status, your legislators want and need to hear from you,” Greiwe stresses. “So much of what is going on is based upon misinformation or incomplete information; hearing your perspective will make it possible for your legislators to make better informed decisions.”
At the end of the day, what Greiwe really enjoys talking about, though, is the success that Cheyenne is having through implementing their strategy, focused on working closely with their customers. “We are fortunate to have a sales team with many years of experience in the business, who understand the nuts and bolts of what works and what doesn’t.”
Clearly Greiwe enjoys the challenge. “There are a lot of great people in all facets of the tobacco industry. There is no reason why we cannot work together to create a new path, a new way of doing business, working together to realize new ways to be successful while being responsible,” says Greiwe. “We can take the initiative and I look forward to working with everyone to do that.”
SMOKESHOP - June, 2008