THE PLAYERS IN THE CIGAR WORLD

With Cubatabaco, founded in 1962, the Cuban state merged the entire state-owned tobacco and cigar production of the island into one government controlled body. The United States trade embargo, imposed as a consequence of the Communism new organisation, still today excludes one of Cuba’s most important export goods from the largest cigar market in the world.

Stateside, consumer demand for tobacco and cigars has thus had to be satisfied by other manufacturing countries, It is predominantly exiled Cubans who have relocated their production to Central and South American countries such as the Dominican Republic, Nicaragua, Honduras, Mexico and Brazil, and have taken over this role.

Today a large part of the global cigar market is in the hands of large European companies.

One of them is the Scandinavian Tobacco Group, headquartered in Denmark. It is one of the most powerful manufactures in the world, and in the USA, holds a market share in excess of 25%. The merger with the powerful Swedish Match AB in 2010, which since that time has held 49% of Scandinavian, came rather unexpectedly. This merger also garnered STG the ownership of the General Cigar Company, owners of the world brand Macanudo and countless Cuban labels like Cohiba, Bolivar, Hoyo de Monterrey and Partagas in the United States.

These brands are very interesting for international sales, but in the United States they rank among the Market leaders. While the Danes rely on cigars from the new world, an opponent to STG Imperial Tobacco has one foot in Cuba.

In 2008 The British multinational cigarette company bought the Madrid based Altadis S.A and with Altadis USA, also  purchased the owner of the trade mark rights for H Upmann, Montecristo, Romeo y Julieta, Trinidad, etc. in the USA as well as Vegafina, Santa Damiana  and Flor de Copan on international market.

Only six years after the founding of Habanos S.A in 1994, the government monopoly for the sales and marketing of Cuban tobacco manufacturing, Altadis had acquired 50% of Habanos S.A. This share is now owned by the imperial Tobacco company group.

Davidoff Cigars are another big player bustling the new world market. What began with the Russian tobacco specialist dealer Zino Davidoff, who ran a highly acclaimed tobacco store in Geneva and was also allowed to sell Cuban cigars with the name Davidoff as a private label, was to be expanded and merged with other multinational companies.

With a presence in over 150 countries they produced 38,9 million premium cigars in the Dominican Republic and Honduras. Successful in the USA is primarily the main brand Davidoff, as well as Camacho. The Classic Habanos markets are the United Kingdom, Spain, France, China, Germany, Switzerland and Cuba. According to Habanos, 70% of their sales are made in 14 countries, whereby Cohiba, Montecristo and Romeo y Julieta make us two third of the successes.\

The economic crisis and legislative measures are slowing down sales in traditional markets, And although most consumers find the cigar as being synonymous with Cuba, the market share of Cuban products and new world cigars is increasing exponentially. During the last few years, however, there seems to be movement and manufacturers are now increasingly entering the new markets.

The market for cigars from the new world has been increasing steadily since around 2004, says “Taylors Tobacconists Bond Street Brighton UK” but the momentum has picked up substantially  over the last four to five years. Since 1992 new world cigars has been importing new cigar brands to the British market, which was originally strongly characterised by Cuban cigars. The estimates the current market share of non Cuban cigars in Great Britain to be 25 to 30 percent.

Generally it is not considered an easy venture to gain footing in new markets and the various characteristics and idiosyncrasies of various countries also represents logistical challenges and problems for expansions. We have to be flexible enough to understand that each country and culture has its own ways of doing business.

While Habanos and Davidoff are concentrating on flagship store concepts, many manufacturers agree that, from country to country there are different preferences when it comes to taste.

And country dependent preferences in taste definitely exist, especially when it comes to flavour as Juan Martinez of Joys de Nicaragua knows, “ I think the international smoker likes good cigars. That is the preferred taste. Our greatest potential in not one particular country, but to continue to eat away at the Cuban cigar market share.

The demand for not Cuban cigars is one reason for international movement since 1990. More and more handmade cigar smokers are demanding new world cigars rather than just being offered Cuban cigars.

“Gurkha cigar representatives” consumers are eager to try new and innovative concepts. That’s why we have made a flying start in the markets. Also Perdomo Cigars is confident and says “we see a lot of growth and if we produce a top quality product, the quantity will always grow”.

Just as the AJ Fernandez and La Flor Dominican is another of the most recent entrants to the international market. In the last two years our international market has grown exponentially. However the globalisation of the cigar market is not only happening from the west to the east.

If you enjoyed this blog and would like to know more, please feel free to contact us today at Taylors Tobacconists.