• Hi Guest - Come check out all of the new CP Merch Shop! Now you can support CigarPass buy purchasing hats, apparel, and more...
    Click here to visit! here...

Recent Trends in Habanos Marketing...

M

Mike33

New Member
Joined
Oct 30, 2006
Messages
1,813
I know there has been some discussion as to Habanos S.A. recent discontinuation of quite a few vitolas and even some entire lines. Mainly the smaller ring gauges are the ones being discontinued and this has been dis-hearting to me and I'm sure others as well. Besides this recent trend of going larger in ring gauges, there are a couple of other trends I would like some input on.

One, the introduction of the much-hyped maduro Cohibas. Are these a direct result of the American market or is there an increasing desire from Europe for maduros? This also has some bearing on the darker wrappers on the ELs that some call maduro. The Cohibas will be very expensive I'm sure, but I for one am anxious to try them and see if they can stand up to the domestic premiums like the Padron maduros and Anejos.

Second, as I am young and have only recently gotten into Cubans, it seems the amount of "special" humidors, regional releases, and EL are growing and becoming more popular by the year. Once again, is this the effect of the American market or was there enough foreign demand to warrant these releases? The marketing and presentation that are going into the "special" releases seems to point to trying to compete with the non-cuban cigar makers.

Basically, I am wondering if the American market is pushing Habanos into these trends? I know from reading interviews with Habanos execs. and from discussion on several boards, Habanos won't admit to this. I also know that half of Habanos S.A. was bought by Altadis of Spain several years ago (not sure how many) and Altadis has pushed these marketing decisions. Is the "ghost" American market really that important to Habanos?

Sorry for the length of this, but I'm really hoping for some good discussion and learning some more about the business side of cuban cigars. I am also especially interested in what some of the members from other countries think about these trends.
 
Young_Smoke said:
I know there has been some discussion as to Habanos S.A. recent discontinuation of quite a few vitolas and even some entire lines. Mainly the smaller ring gauges are the ones being discontinued and this has been dis-hearting to me and I'm sure others as well. Besides this recent trend of going larger in ring gauges, there are a couple of other trends I would like some input on.

One, the introduction of the much-hyped maduro Cohibas. Are these a direct result of the American market or is there an increasing desire from Europe for maduros? This also has some bearing on the darker wrappers on the ELs that some call maduro. The Cohibas will be very expensive I'm sure, but I for one am anxious to try them and see if they can stand up to the domestic premiums like the Padron maduros and Anejos.

Second, as I am young and have only recently gotten into Cubans, it seems the amount of "special" humidors, regional releases, and EL are growing and becoming more popular by the year. Once again, is this the effect of the American market or was there enough foreign demand to warrant these releases? The marketing and presentation that are going into the "special" releases seems to point to trying to compete with the non-cuban cigar makers.

Basically, I am wondering if the American market is pushing Habanos into these trends? I know from reading interviews with Habanos execs. and from discussion on several boards, Habanos won't admit to this. I also know that half of Habanos S.A. was bought by Altadis of Spain several years ago (not sure how many) and Altadis has pushed these marketing decisions. Is the "ghost" American market really that important to Habanos?

Sorry for the length of this, but I'm really hoping for some good discussion and learning some more about the business side of cuban cigars. I am also especially interested in what some of the members from other countries think about these trends.
Click to expand...

There is no American Market. We only smoke Moontrance!


Check out these :linky (pdf) and here:linky (pdf)
These will start you off. I'm sure others (Moki?) will have more info.

oh - here too!


<edit to add...I think it's a 'time' issue also...people(read - I) don't have 2 hours to enjoy a smoke....so, shorter smoke are coming out! Who knows...maybe they don't have a filler for larger cigars. This might be due to the storms last year and '05.>
 
I am I guy who also enjoys UFO talk J.K. :laugh: , maybe they are prepairing for what many are already talking about. The "end of the embargo" Fidel's imminent upcoming departure from planet earth? I think there is still a lot to be sorted before that happens, then again manufacturing needs to be ahead of demand which I am sure will be high when the day comes. That is just my Noob opinon.
 
YoungSmoke,

Thanks for your excellent questions. I would not say that the American market has a direct effect on the marketing and product development decisions of Habanos-Altadis pertaining to Cuban cigars. I would, however, argue that one must acknowledge the fact that American tastes and sensibilities have a global influence.

The cigar world is pretty simple in terms of the product and its presentation. Innovations are few and far between. Aside from aspects relating to non-functional utility I'd even go so far as to say that there have been no true innovations in over a hundred years or whenever it was that wooden molds were first introduced.

Aside from candela and oscuro/maduro, Havana produces essentially all the other shades. In today's market, candela seems to be commercially dead but the darker shades seem to be full of growth potential. And so it makes eminent sense that Habanos should choose to go there.

On the question of special production, I think we need look no further than the bottom line. Underlying both the Cohiba maduro release and the plenitude of EL's, RR's, and the multitude of limited humidors is the very real consideration of profitability. I've been carrying out a very interesting analysis of the cost basis of Habanos and all these special issues serve to do one thing and that is to support increased margins.

So, I guess I'm saying that the influence of the American market is an unknown and most likely one the importance of which is commonly overestimated. By one recent estimate, the number of Cuban cigars smuggled into the U.S. is around 6 million. This is under 3% of Cuba's annual production of premium handrolled cigars and is valued at around $28 million dollars. This is but a small number and furthermore, is situated in a country that Habanos cannot directly address because of the embargo.

Now, the tastes and preferences of the American smoker are certainly known to Altadis. After all, they own the producer Consolidated Cigars and the retailer JR Cigars who together account for somewhere around $600 million in sales. This most certainly affects their US operations and I would suspect the Cuban operations keep an eye on things but I suspect that they are much more concerned about preserving topline sales and profitability in their big markets of Spain, France, UK, etc.

And don't forget that not only are the cigars getting fatter, they're getting shorter. This is a move that is consonant with social factors (time for smoking) and production factors (smaller and shorter leafs are able to be used).

Wilkey

Edit: Gary, I just saw your addition via edit. Twisted minds think alike. :thumbs:
 
There always is the possibility Habanos could be ramping up for a predicted end to the embargo.

I believe they did the same freakin' thing in the late 1990's....remember how we had a slew of new brands: Cuaba, Trinidad, Vegueros, San Cristobal, Vegas Robaina, and La Vigia? That last one, La Vigia, didn't make it...only 8 or so boxes got released in Canada to secure a trademark, then it was never heard of again, and Rob Ayala (an Australian tobacconist involved in the internet cigar community) even asked a Habanos rep for me about La Vigia and the guy denied it ever existed! :laugh:

Why were six new brands released for commercial production in a space of less than 5 years? To me, it's obvious...Habanos was expecting Clinton to drop the embargo in his last term, and they wanted new brands out immediately on the market while they dealt with the inevitable legal battles over the American rights to the other brands, like Romeo y Julieta and Montecristo, that other cigar companies put out on the American market.

When Altadis became a partner in Habanos, trademarks weren't so much of an issue anymore (though they still could get some legal heat from General Cigar and MATASA), but obviously Cuba may be thinking Raul will be able to normalize relations between them and the US and that the American market might be in Habanos' future.
 
Black Plague said:
There always is the possibility Habanos could be ramping up for a predicted end to the embargo.

I believe they did the same freakin' thing in the late 1990's....remember how we had a slew of new brands: Cuaba, Trinidad, Vegueros, San Cristobal, Vegas Robaina, and La Vigia? That last one, La Vigia, didn't make it...only 8 or so boxes got released in Canada to secure a trademark, then it was never heard of again, and Rob Ayala (an Australian tobacconist involved in the internet cigar community) even asked a Habanos rep for me about La Vigia and the guy denied it ever existed! :laugh:

Why were six new brands released for commercial production in a space of less than 5 years? To me, it's obvious...Habanos was expecting Clinton to drop the embargo in his last term, and they wanted new brands out immediately on the market while they dealt with the inevitable legal battles over the American rights to the other brands, like Romeo y Julieta and Montecristo, that other cigar companies put out on the American market.

When Altadis became a partner in Habanos, trademarks weren't so much of an issue anymore (though they still could get some legal heat from General Cigar and MATASA), but obviously Cuba may be thinking Raul will be able to normalize relations between them and the US and that the American market might be in Habanos' future.
Click to expand...

Ramping up with what? Certainly not additional tobacco. I've not read that their cultivation is increasing either in terms of efficiency or land area cultivated. Introducing brands that do not have disputed ownership makes a lot more sense. But even this is not so straightforward as it seems. Building a brand is not just coming up with a new name. And besides, Trinidad and Robaina already have analogs in the American market. Vegueros as it is presently formulated would probably not fly in the US. Neither would Guantanamera I think.

Until there is an expansion in their cultivation, taking on the newly opened U.S. market could only happen through rerouting volume that presently goes to other markets. Could it happen? I think so especially because we have the volume (see Grateful1's Altadis links) and we could pay the prices. When this opportunity comes up, Habanos will have to tread very carefully although the smoking bans in some of these other countries might result in some of the necessary contraction.

Wilkey
 
The Canadians will gladly pass on their supply to the US market, no serious smokers in Canada buy here anyway.
 
Ginseng said:
The cigar world is pretty simple in terms of the product and its presentation. Innovations are few and far between. Aside from aspects relating to non-functional utility I'd even go so far as to say that there have been no true innovations in over a hundred years or whenever it was that wooden molds were first introduced.
Click to expand...

I read in CA about these new plastic molds that are being used by Fuente and other NC cigar makers that changed several aspects of the market. These new molds don't wear out like the wooden ones and they also allow for new shapes to be pressed and made. I don't think Cuba has access to these as yet because there's only one company making them and they're located in the US (at least this is what the CA article said).

It would be interesting to see if changes would occur to the shapes and quality of various Cuban vitolas with the introduction of these newer plastic molds.
 
Thanks for your thoughts Wilkey and BP. Thanks also for the links Grateful.

I guess more or less what I think is that Habanos is trying to model their premiums/cubans more based upon what has worked for Altadis in the U.S. This would explain a lot of the various marketing gimmicks they have done to some success. I do agree Wilkey that the U.S. doesn't have a direct impact on Habanos in terms of sales, but I do believe they are hoping to capture more of the U.S. market even though it is not open to them. I have heard numbers of anywhere between 5% to 8% of the Habanos sales come from the U.S. The truth is, there is no way to know. As grateful's links showed, the real growth markets for Habanos are China and the Middle East.

It would not surprise me, however, to see Altadis steer the company into more indirect marketing to U.S. consumers. They know what we like already. So, indirectly or directly, I do think the U.S. has some effect on the direction of Habanos.
 
I think it would be foolish to ignore a viable as of yet "untapped" market such as the U.S. of A. While China is one of the larger tobacco consuming countries (I hear as high as 85% smoking rate), the United States is a great consumer state for tobacco in addition to other products. We are an affluent society, expertly turning luxuries into neccessities. I can not think of another society that indulges itself more than the United States. We buy booze by the keg, we waste more food than most 3rd world countries can produce, and we smoke cigarettes by the pack. To this end, the balance of it all comes in the form of AA, diet plans/pills and stomach staple surguries, and the ever so popular nicotine patch.

So if the time comes when Habanos will freely cross the border, I am sure that every cigar smoker will buy in excess. Hell, we are doing that even now, why else would we need 4 coolidors, a personally built walk in, and Bob's master craftsmanship skills?

On a further note, Americans (referring to U.S. citizens) like big things. Big cars, big boats, big steaks, big rims, bit boobies, big butts, big money. BIG BIG BIG. So I expect to see some big ring guages in the future. I like fatter but shorter sizes myself, particularly robusto/rothschild sizes.
 
To touch on another point that was brought up concerning the introduction of brands and such, the newer brands were created to be specialty or niche brands. I speak of SCDLH, Cuaba, and Trinidad. These brands only represent a very small percentage of the market for Habanos and they will likely stay that way. Currently with 31 brands and well over 200 vitolas, there is no real need to introduce any more brands. I think Habanos will focus on the regional and limitada releases instead of launching new brands if the U.S. were to open. Maybe they will create a special brand to recognize the opening of the U.S. market, but who knows.

Another question Wilkey and others, the operator of FoH has stated he believes recent production is at quality levels he hasn't seen in a long time, perhaps ever. There is also somewhat of a consensus that this is the case around this board and on FoH. What causes Cuba to focus on quality so intently recently as opposed to all the years past? People have complained about the quality (by this, I mean mainly construction and draw) for decades with nothing being done, why focus on it know?

Some of the information I used came from here. Great website :thumbs: .

edit: removed a name
 
I noticed in more recent trades with Europeans, that more people are looking for Maduros. Also, ECCJ was comparing Maduros in one issue, if I remember correctly.
 
Mark Twain said:
Ginseng said:
The cigar world is pretty simple in terms of the product and its presentation. Innovations are few and far between. Aside from aspects relating to non-functional utility I'd even go so far as to say that there have been no true innovations in over a hundred years or whenever it was that wooden molds were first introduced.
Click to expand...

I read in CA about these new plastic molds that are being used by Fuente and other NC cigar makers that changed several aspects of the market. These new molds don't wear out like the wooden ones and they also allow for new shapes to be pressed and made. I don't think Cuba has access to these as yet because there's only one company making them and they're located in the US (at least this is what the CA article said).

It would be interesting to see if changes would occur to the shapes and quality of various Cuban vitolas with the introduction of these newer plastic molds.
Click to expand...


The production of the Cuaba line has made using the plastic molds. Not sure about the other lines. Possibly when the wood molds wear out.
 
Young_Smoke said:
One, the introduction of the much-hyped maduro Cohibas. Are these a direct result of the American market or is there an increasing desire from Europe for maduros? This also has some bearing on the darker wrappers on the ELs that some call maduro. The Cohibas will be very expensive I'm sure, but I for one am anxious to try them and see if they can stand up to the domestic premiums like the Padron maduros and Anejos.
Click to expand...

Many smokers still prefer darker wrappers. A maduro wrapper is still a relatively new concept for Cuban cigars. Considering that EL's have been a marketing goldmine for Habanos, it seems like a natural progression to market a a maduro wrapper. The introduction of a non-EL maduro to the Cohiba line is good business sense (not that I would buy it). It marks maduro as a premium and exclusive addition . Since Cohiba is a global brand, it is also easier for Habanos to track the demand for such a product.
 
Back in the day, Habanos did mark boxes with the wrapper color. Not sure when that stopped (probably the 80's), and funny enough back then everyone wanted LIGHT wrappers and not maduros :laugh:

I don't know if they'd start doing it again, but depending on how these new maduro offers sell, you might see the other global marcas (Party, RyJ, Monte, and Hoyo) offering maduro lines.

Though I confess I am curious to try them, IMHO, the new Cohiba Maduros look like such a rip-off of non-Cuban cigars. Black wrappers, ring gauges fit for a lead pipe.....take the band off and maybe the pigtail is the only thing that'd tip you off that it wasn't a LGC Serie R or some Rocky Patel cigar. :laugh:
 
You must log in or register to reply here.
Top