Cuban cigar sales hit record as China demand surges

[BrightonCorgi]

19 hours ago, El Presidente said:

I would agree with you that they killed gems... 

You could have brought back the RA 898 this year but globally people would still line up to purchase the next  Cohiba LE  50:1    If it were your enterprise, where would you park your leaf?

They could and should do both. simply a matter of a release every 5 years for the "killed gems".

Habanos need to marketing effort to promote why the RA 898 (or corona :-) ) is so special and why everyone needs to buy them right away.  Promotion of Habanos in general is lackluster, but is also dampened due to being a tobacco product.  They need to focus on the lifestyle so they don't actually directly promote tobacco.

[CaptainQuintero]

  I suppose a legitimate question is what's the fall back option?

  Ignore the generalisations but..

  We have all seen the stereotype 'flash guys' who have come into money and want only the 'best' cigar, they only want the ultra premium. So it's Cohiba, special releases etc and nothing else. The thing with these types are that they come in, spend a lot in a short amount of time, generally lose interest and move on to the next ultra premium hobby; top golf clubs, road bikes etc and continue the cycle.

  Some stay and find the inherent positives in cigars but it's a small percentage. 

  So what is Cuba's plan for when, in a decade or so and they've engineered their whole business to cater to this market, a significant proportion of this market simply moves on to the next show off hobby? They've alienated the rest of their historic market, in price and product. They can't advertise anymore, plain packaging will be everywhere, they won't cut prices back to 'pre-dick' pricing levels, what can they do?

[BrightonCorgi]

9 minutes ago, CaptainQuintero said:

  So what is Cuba's plan for when, in a decade or so and they've engineered their whole business to cater to this market, a significant proportion of this market simply moves on to the next show off hobby? They've alienated the rest of their historic market, in price and product. They can't advertise anymore, plain packaging will be everywhere, they won't cut prices back to 'pre-dick' pricing levels, what can they do?

Habanos needs to cater to their long held distribution channels first and foremost.  You can't alienate the base, but the long term prospects don't look too rosy for anyone in the tobacco industry IMO.

[CaptainQuintero]

I'm assuming that the bricks and mortar of the traditional profit for habanos; being the cheaper Partagas mille fleur, Romeos, cedros line, Monte 4 etc in Europe has changed?

It seemed that was the staple and the premium stuff was the bonus profit on top. If that model has flipped, is it sustainable? 

More importantly, does this mean that the new-look vegeros line was ultimately a waste of time? 

[dangolf18]

I'd say the 12% yoy increase in sales had something to do with price increases for flagship brands and the introduction of more and more exclusive products. But I also think China definitely had something to do with it, considering when I was in Spain a few months ago, most shops owners told me the Chinese had been buying up EVERYTHING. There was definitely hardly any stock on the shelves of the better known stores.

[Colt45]

22 hours ago, Hookmaker said:

And my experience from wine is, that they will not be interested in much other than that.

With regard to "latest fadists", I'd agree, though I imagine that once a certain segment finds something else of interest,  they'll move on. But the reduction / elimination of regular production and increase in special releases is not a very recent phenomenon and I've my doubts that we'll see the clock turned back on that - at least any time soon.

Again, if we want Cuban cigars, there's one game in town - like it or lump it....

 

[El Presidente]

2 hours ago, CaptainQuintero said:

  I suppose a legitimate question is what's the fall back option?

 

 

If this was a military exercise, Nazi Legislation controls much of the Asia Pacific and Western Europe.   HSA have largely left the underground networks in those countries to hold their own while they retreat back into the markets of China, Eastern Europe and the Middle East.   They are still waiting for the US to come into the war. 

[Fugu]

22 hours ago, El Presidente said:

Should the booming markets fall back (and we haven't even factored in the US) then they could re-release RA898, Partagas Corona, Upmann Super Corona, connie 1/2/3, Dieux in 50's and most of us will all be running back like Pavlov's dog.

Question is - if and when that might happen, how many of those "us" will still be around to appreciate it.... . At some point people will have forgotten about those cigars.
But otherwise widely in agreement with your assessment here, actually.

Fashions come and go, have always been, sure, but what we see now since the turn of the century is an unparalleled change never observed before in the long history of the Cuban cigar.

18 hours ago, NSXCIGAR said:

Some may argue that it has in fact been gutted but I would push back on that, and again, what has been available has been fairly good over the last 24 months. So while their strategy is certainly aligned with higher-end cigars with higher margins they have had a general lack of raw materials in the last few years that they've managed to do quite well with in my estimation.

I am having one issue here, NSX, and that's the term "higher-end". High-end always implying for me - quality. But for my liking there is too high a proportion of the new and special releases that is simply just higher-end calibre, higher-end dressing and higher-end pricing, but otherwise using basically the same standard tobacco. And this streamlining comes at the cost of a continual cutting back on classic vitolas that still "some" of us do prefer....

[Fugu]

4 hours ago, dangolf18 said:

But I also think China definitely had something to do with it, considering when I was in Spain a few months ago, most shops owners told me the Chinese had been buying up EVERYTHING. There was definitely hardly any stock on the shelves of the better known stores.

Yep, same observations made here in my hometown B&M (a rather smallish but well-assorted one) a couple of months back: Owner told me about some Chinese guys he had never seen before, entering the shop and starting filming everything with the smartphone. They were then receiving buying orders for particular stock online via Skype. He pointed me to a pile of their purchases which he had set aside for them for the time being (amongst it a beautiful box of Lances which I had returned for and planned on buying after having tried out some singles....). All Cohiba, Monte and LEs.

[dangolf18]

Yep, same observations made here in my hometown B&M (a rather smallish but well-assorted one) a couple of months back: Owner told me about some Chinese guys he had never seen before, entering the shop and starting filming everything with the smartphone. They were then receiving buying orders for particular stock online via Skype. He pointed me to a pile of their purchases which he had set aside for them for the time being (amongst it a beautiful box of Lances which I had returned for and planned on buying after having tried out some singles....). All Cohiba, Monte and LEs.

That’s really unfortunate. From the shops I went to, it seemed only the shops that appeared at the top of search results on Google were hit hard. Found a shop a bit lesser known that had a great selection of aged stuff and LEs. Let’s just pray Andorra hasn’t been ransacked yet.


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[CaptainQuintero]

3 hours ago, El Presidente said:

 

If this was a military exercise, Nazi Legislation controls much of the Asia Pacific and Western Europe.   HSA have largely left the underground networks in those countries to hold their own while they retreat back into the markets of China, Eastern Europe and the Middle East.   They are still waiting for the US to come into the war. 

  So in short it's a gallic shrug and que sera sera!

  Maybe they're onto something; just react when the market changes, no point worrying about what might never happen.

  I suppose if you're limited in resources there's a kind of sense to simply making the most out of what you know is doing well for you right now.

  I wonder who is the driving force behind the big changes, is it tabacuba or Imperial. You'd think dragging CCs into the modern style of consumerism would be at Imperial's door, but the scorched earth policy of how it's been done send a bit amateurish.

  Unless it really is just a minority feeling the hits and we're in an echo chamber. But that again probably goes back to what exactly is driving CC profits nowadays. If the old RyJ and Partagas cheapies in Spain/Germany/France etc has dropped by the wayside and it's the ultra premium stuff bringing home the bulk of the profits now, then I suppose we just could really be the guys holding onto the vinyl bellowing into the wind about the curse of the cassette

 

[NSXCIGAR]

3 hours ago, Fugu said:

I am having one issue here, NSX, and that's the term "higher-end". High-end always implying for me - quality. But for my liking there is too high a proportion of the new and special releases that is simply just higher-end calibre, higher-end dressing and higher-end pricing, but otherwise using basically the same standard tobacco. And this streamlining comes at the cost of a continual cutting back on classic vitolas that still "some" of us do prefer....

Yes, our definitions are different here. I'm using "high-end" to describe expensive special releases, quality notwithstanding.

For me, I'm not that concerned about the quality of special releases. I'm not in their market segment for those. I'm almost completely concerned with regular production, particularly since I've never felt special production has a generally higher level of quality than regular production and even if it did the price is out of proportion in 2018. My position is that they seem to have been able to keep regular production quality high enough and quantities high enough (although neither is ideal) with what has ostensibly been less than ideal levels of raw materials over the last 24-36 months.

Yes, I know models have been cut and as you know I'm against them all. But that's been the trend since 2003. You and I are not their targets and I understand that. Would I like zero special production and all that prime tobacco going into regular production? Of course. But that's not realistic to expect anymore. As long as regular production is decent with the shortages they've experienced I have to give them credit as they could have just stuck absolute crap into regular production or reduced supply to nothing, and they haven't done that. 

[Lotusguy]

. Let’s just pray Andorra hasn’t been ransacked yet.


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Keep dreaming - the flippers have long been over Andorra like locusts.

Incidentally, I'll be there next week and I shall report back.

[Blakes]

On ‎27‎/‎02‎/‎2018 at 10:28 PM, El Presidente said:

You are correct in that they really don't care about any specific individual. They care about "market segments" and "product positioning".  There may be six market segments and right now we are at the very bottom of the totem pole. 

...  Our market segment can grumble and go try some NC's. We are welcome to stay there. 

 

 

 

I certainly am a grumbler. I'm not a fan of NC's either but what I have noticed over the last couple of years is the increasing ease of getting hold of Cuban custom rolls, good quality custom rolls for that matter. And available in any size you like, (Corona, Lonsdale, Daliah, Skinnies etc..) These are the cigars that have been taking up a larger percentage of space up in my stocks in recent years.

To me it seems HSA are inadvertently creating an underground 'competitor' all be it tiny.

If circumstances change in Cuba, how long before small private marcas return to the market?

[El Presidente]

6 minutes ago, Blakes said:

I certainly am a grumbler. I'm not a fan of NC's either but what I have noticed over the last couple of years is the increasing ease of getting hold of Cuban custom rolls, good quality custom rolls for that matter. And available in any size you like, (Corona, Lonsdale, Daliah, Skinnies etc..) These are the cigars that have been taking up a larger percentage of space up in my stocks in recent years.

To me it seems HSA are inadvertently creating an underground 'competitor' all be it tiny.

If circumstances change in Cuba, how long before small private marcas return to the market?

If the suitcase custom market (fly in , load up, get out, repeat) get's out of hand then they can shut down the house rollers overnight. Small change right now. Of bigger concern to them is the farmer to entrepreneur to retailer/flipper market. That will be fixed with a jail sentence and giving the land to someone else. It is not at the top of the list of concerns but they will crack down if distributors get together and complain loud enough. 

If circumstances change in Cuba. Privateers will be growing tobacco up and down inclusive of the cracks along the malecon. 

[alloy]

Well...it seems like the Chinese have invaded FOH's 24:24! All the aged Cohiba stock went so fast, it seems like they have 24:24 hardwired to their smartphones the instant it comes up, BAM! They are sold...It's just not fair...

[Hookmaker]

7 hours ago, Lotusguy said:

 

Keep dreaming - the flippers have long been over Andorra like locusts.

Incidentally, I'll be there next week and I shall report back.

 

Damn for you, I'll be there this weekend, and right now they're stocked to the roof 

[Lotusguy]

Damn for you, I'll be there this weekend, and right now they're stocked to the roof 

Noooooooooooooooo

I just arrived in Barcelona with two friends (aka mules) in tow.

[99call]

On 01/03/2018 at 9:00 AM, Lotusguy said:

 

Keep dreaming - the flippers have long been over Andorra like locusts.

Incidentally, I'll be there next week and I shall report back.

 

Haha, I always love comments on Andorra, invariably its:

"it's bullshit don't go..........................but i'll let you know what its like"

[kwsaw63]

Habanos are doing what any MNC worth its salt would do - maximise profits to the best of its ability. Having worked for a number of MNCs I also know that short term targets are all that matters with only lip service paid to the long term. China’s economic growth and large population have made it a global force to be reckoned with, whether we like it or not (for the record I don’t like it and I speak as an ethnic Chinese whose grandfather emigrated to SE Asia). 

In short the folks in Habanos are doing what anyone of us would do, if we were in their shoes. For me I refuse to pay for overpriced double banded short and fatties but instead buy & stock up on regular production cigars before they get discontinued.

[PigFish]

On 2/26/2018 at 8:35 PM, El Presidente said:

You have to give them some credit: Making more $ with less product is excellent ROI. 

Yep... puts their marketing plan right up there with Charlie Tuna!

-Piggy

[Lotusguy]

Haha, I always love comments on Andorra, invariably its:
"it's bullshit don't go..........................but i'll let you know what its like"

Not saying there is nothing at all - it's still a tax free zone after all. But the days of picking up ERDM Tainos by the boat load are long over and if I wasn't already near Barcelona with two friends that also want to go and aren't smokers, I wouldn't make the trip.

Better for you?

[99call]

1 minute ago, Lotusguy said:

Not saying there is nothing at all - it's still a tax free zone after all. But the days of picking up ERDM Tainos by the boat load are long over and if I wasn't already near Barcelona with two friends that also want to go and aren't smokers, I wouldn't make the trip.

Better for you?

I'm just jealous dude, I've not made it there yet. I hope it beats your expectations and you you snag some finds

The comment was just intended as a funny observation, in the fact that whenever I hear a CC enthusiast on the way to Andorra, they're always very sceptical, of there being anything left, but pilgrimage continues. 

[Lotusguy]

I'm just jealous dude, I've not made it there yet. I hope it beats your expectations and you you snag some finds
The comment was just intended as a funny observation, in the fact that whenever I hear a CC enthusiast on the way to Andorra, they're always very sceptical, of there being anything left, but pilgrimage continues. 

Sorry - didn't mean to come across as cranky, brother.

I also hope I'll be pleasantly surprised but I don't want to get my hopes up, based on reports by friends.

[99call]

6 minutes ago, Lotusguy said:

 

Sorry - didn't mean to come across as cranky, brother.

I also hope I'll be pleasantly surprised but I don't want to get my hopes up, based on reports by friends.

 

good luck, If you get the chance, it would be good to have some up to date shelve pics for the forum, I think the last ones on the thread are about 4yrs old.