Habano

Fewer Cigar Smokers Want Cubans, Production Drops

Filed under: Cigars

The Cuban cigar industry is struggling under the dual pressures of smoking bans and economic malaise. Consumers around the world aren't buying as many sticks, and Cuba is cutting production. In Pinar del Rio, only 22.4 million leaves were harvested this year, off 14 percent from 26 million last year. Local media reports: "There was a reduction in planting due to limitations in resources caused by the economic crisis," according to the Financial Times.

With 70 percent of the market – not including the United States – the Cuban cigar business is a global force. So, its financial performance has broad implications, and the data doesn't look good:

According to the most recent report released by the government's statistics office, the industry has fallen on hard times in recent years, with production of cigars for export down from 217m in 2006, to 123m in 2007 and 73m last year as the business drew on its inventory.

Export cigar sales plunged to $218 million last year from $243 million in 2008 ... but keep in mind that the effects of the late 2008 financial crisis didn't really come to bear until 2009.

Of course, consumption in the United States is unchanged, because you can't go below zero. Nobody smokes Cuban cigars in the United States because they're illegal ... right?

Gallery: La Casa del Habano, St Barths

Vegas Robainos at La Casa del Habano, St Barths

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Tags: cigar, cigars, cuban, cuban cigars, CubanCigar, cubanos, cubans, Habano, habanos

Cuban Cigar Festival Punctuated with Million Dollar Humidor Auction

by Tom Johansmeyer (RSS feed) —

Filed under: Cigars, Auctions

The annual Habanos festival ended Friday with a million-dollar cymbal crash. The week-long event attracted cigar merchants, smokers and collectors from around the world to select, sample and savor ... all leading up to purchases, of course. The main attraction was an auction of ornate cedar and mahogany humidors packed with hecho a mano cigars, ultimately fetching $1.09 million. Hundreds may have attended, but only a small fraction walked away with that level of satisfaction.

The celebration came on the heels of an announcement by Habanos S.A. that its revenue only reached $360 million last year, an 8 percent decline from 2008. The new Romeo y Julieta that was unveiled at the event, designed to appeal to women, is ostensibly a direct response to two consecutive years of revenue declines. Since women comprise only 5 percent to 10 percent of Habanos' customers, the company is hoping that there's room for growth. The company is also relying on an economic recovery in Spain, which is its largest market.

Despite the new "ladies' line," the focus in Cuba last week was on the auction. The top humidor to move contained the new Cohiba Bieke cigar, fetching $681,000, close to two-thirds of the total. According to Oscar Basulto, Vice President of Habanos, this is the top premium cigar on the market – though I'm sure there are a few people in Nicaragua, Honduras and the Dominican Republic who would disagree.

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Tags: auction, cigar, cigars, cohiba, cohibe-behike-cigar, cuba, cuban, cubans, Habano, habanos, havana, humidor, humidors, romeo y julieta, RomeoYJulieta

Cuba's Looking for Ladies to Light Up

by Tom Johansmeyer (RSS feed) —

Filed under: Cigars

Cuban cigar sales are in the tank right now. A combination of economic woes and anti-smoking legislation around the world have put the squeeze on Habanos S.A., the company behind Cuban cigars. Sales fell 8 percent last year, the company said, to $360 million last year. This follows a sales decline in 2008. Even though the economy is showing signs of recovery, Cuban cigar haven't come back. So, the company is looking to move into some relatively uncharted territory: women.

To find its way into women's hands, Habanos has created a smaller and milder Romeo y Julieta (the women I know who smoke cigars, however, tend to prefer something more robust). Women comprise only a smal share of the market – between 5 percent and 10 percent according to Habanos marketing director Ana Lopez.

Though some love from the ladies may help, Habanos realizes that it won't change the world for the beleaguered Cuban cigar company, which expects only a modest performance in 2010, due in large part to soft economic conditions in Spain.

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Tags: cigar, cigars, cuban, cuban cigar, cuban cigars, CubanCigar, CubanCigars, cubans, Habano, habanos, women smoking cigars, WomenSmokingCigars