Limited Release Cigars
It seems there is no limit to them lately
First off… What makes a “Limited Release”?
The term “limited release” is used as a marketing incentive for various kinds of products, originally published products related to the arts, such as books, prints or recorded music and films, but now including cars, fine wine, whisky and of course cigars.
With cigars, a “limited release” by its very nature is restricted in the number of cigars produced, although in fact the number may be very low or very high.
The first “limited release” in cigars that I can recall was Punch “Rare” Corojo dating back in the early 1990’s, and it is still sold almost 25 years later. I don’t know how limited it is, but it does comes out only once a year, making it an “annual release”. It was first released by Villizon & Company, owners at that time of Punch, Hoyo de Monterrey among many other brands which were all made in Honduras. Today all their brands are owned by General Cigar a division of Swedish Match and the largest cigar company in the world, Scandinavian Tobacco Group (STG).
Today, just about every cigar brand has what they call “limited releases” and some entire brands and companies are “limited releases” which include new added names such as “special editions”, “shop exclusives”, “deluxe edition”, “collector’s edition” and so on… and it seems many more are about to hit the shelves of cigar shops this year.
The fact is, retailers have little to no space on their shelves as there is a glut of brands and sizes in full production, yet manufacturers keep adding limited editions. My question is why?
Why would any manufacturer choose to work at a blend, design, packaging, marketing and advertising on something that will go away by plan? A product that will intuitively be extinct without building a following for future sales. There must be a reason because it is being done over and over again and copied by virtually every cigar company. So let’s look at the possibilities of why.
Here is the 10 reason I can think of, as to why a cigar manufacturer might make “limited releases”.
- INSANITY – Maybe, in this copycat industry, each manufacturer believes that if the others are doing it, it must be the right thing to do even if it proves not to be. Try it again… over and over and expect a different outcome… which we all know is the definition of insanity.
- SHELF SPACE – There is little shelf space available in retail cigar shops, so by putting out “limited releases, the manufacture can stake claim of the space and own it. When it starts getting low, the next “limited release” can be launched and there is always a place for it.
- TURN NOTHING INTO SOMETHING – A manufacture has a bunch of slow moving cigars and can simply re-packages them as the “limited release” and now instead of selling them as a close-out, they can sell them at a premium.
- CREATIVE – The Manufacture may be having fun while getting creative with a cigar without abusing their key brand. No harm… no foul.
- PRE-ORDERS – A manufacturer takes orders for his new “limited release” and makes only what he knows will be sold. This is guaranteed sales for the manufactures and there is never an overstock unsold.
- THE CLEAN-UP – A manufacturer wants to get rid of material that they will not be buying again in the near future, having in-stock only a little of this and a little of that, a “limited release” can clean out the materials. Much like a good restaurant owner would make chicken soup for tomorrow from the left over chicken from tonight.
- PRODUCT LAUNCH ATTENTION – “Limited releases” is the answer to the consumers most asked question and for the press. What’s new is the most asked question in cigar shops across the globe. Having “limited releases” keeps the attention on the manufacture to the consumer who always has something new (but limited) and to the press who need something to talk about. Bloggers love to write about them and consumers love to tweet about them.
- LOW COST FOR THE MANUFACTURER – For a smaller manufacturer, if it wasn’t limited they would never be able stock, sell, or control all the brands they have… so “limited releases” let them have something new without the expense to market them, stock them and distribute them.
- THE REGULAR STUFF LOST ITS LUSTER – Nobody is talking about the manufacturers’ regular brand anymore. Maybe the brand isn’t as good as it used to be because the crop year has changed which caused the cigar to change or for a whole host of other reasons. It just doesn’t sell like it used too so it is re-packaged as a “limited release”.
- TESTING THE NEXT BLEND – A manufacturer is not quite sure if this combination of tobacco, or if its size, ring, shape will sell, so they put it out as a test, pre-sold as a “limited release”. If it sells through and gets accolades, it later can become a real brand.
I’m sure there are others… can you think of any?
The problem as I see it is that a lot of manufacturers are banking on the “limited release”… literally. They have no primary brand that can keep the company funded for a long period of time. The manufacturer understand the bell curve of the cigar business, meaning a new cigar brand gets early traction from retailers, taking it in and filling their shelves and humidors with the new product. After the initial fill of the retailers stores, things appear to slow down, but in reality they have not slowed down, the manufacturer has only filled the stores and now it is time to fill the consumers with what we call… the sell through.
At the re-order point from the retailer, not every size is needed and the brand appears to have leveled off or dropped. At that point, most manufacturers go into panic mode and launch the next one. This is repeated over and over again until what is about to happen… the retailer cannot take on any more new ones without discontinuing brands that already have a following which would probably be a big mistake.
The fact is that a “limited release” cigar is going to go away simply because it was made to do just that… go away… when they are gone, they are gone … forever! All the hard-work and all the attention it might have got is gone, simple because the manufacturer has painted themselves in a corner and make the claim, this is a “limited release”.
The consumer who loved it and wants to keep buying them, to be loyal to it and be a regular buyer of it, just can’t. Now it’s back to the competitor’s regular brand. For the consumer – If you love it… you can’t get it again. You’re not happy are you?
For the Retailer – If you recommend it and sell it out, you will now be driving your customers away, on the search to find another retailer who has some left if possible.
For the Manufacturer – You made money but they have created no assets for your long term business. It’s back to the drawing board, but following time there just might not be any room for your next “limited release”.
WHY DOES THIS CONTINUE?
Maybe… the manufacturer has not built a core consumer base but needs to keep up this insanity to keep their business afloat.
OR
The manufacturer has a bunch of leftovers and is flushing what would normally not sell and quickly switching it to a product that sells out of their factory immediately… the next “limited release”.
The problem now is that the retailer is overloaded with lots of other “limited releases” that just never sold through and then…here comes the next round. The retailer needs them if the consumer is asking and must take them or else the retailer runs the risk of their customer going else ware to find them.
When will it end? Only the FDA knows for sure.
Currently, the FDA (Food & Drug Administration) has considered in their Deeming Documents to stop all “limited releases” by forcing them through regulations and costly fees. Nobody wants to see that happen, but maybe the manufacturers are all rushing to market these “limited releases” before they are forced to stop.
Another question would be, what was the last brand to get built-up without the use of “limited releases”? I can’t think of it… can you?
