The Boutique Cigar Brand Boom is Over!
The “Names You Know” That’s What Cigar Retailers were Buying
Another Editorial by David Garofalo
“What’s New” might be what consumers are asking for… but “What Sells” and what is “Most Recognized” is what cigar retailers are buying.
I’m just back from the IPCPR Cigar Trade Show, the cigar industry’s largest convention and trade show world-wide. Walking through, I couldn’t help but notice the trade show booths that were crowded and the ones that were not. Take away the window shoppers and the brand owners talking with press and let’s just concentrate on the buyers, the retailers who were sitting and placing orders, large orders. Sure, the new stuff got the looks, write-ups and was what people were talking about, but if you looked really close (and I did) the “names you know” are what all the retailers were there for… to buy what sells.
In a recent survey to top cigar retailers by Cigar Aficionado, who by the way has been doing this survey for almost 20 years now, and one that I have participated in since the beginning, it showed that the biggest names in the cigar business are the ones that unquestionably sell the most.
Padron, Fuente, Davidoff, Romeo y Julieta, Perdomo, Rocky Patel and La Flor Dominicana round out the best -selling brands. Gone are the days of Macanudo, Montecristo, Punch and Partagas who used to highlight the list, but also missing are the “geek sticks”, the cigars that are talked about on blogs and chat rooms and even here on The Cigar Authority, gone are the limited releases and hard to get stuff because they simply don’t sell enough to even get on the radar at the retail cigar shop level.
There are some commonalities in the list, the best-selling brands all have at least 20 years or more of familiarity to the end-user, the cigar consumer, who spends their hard-earned money apparently on brands they know and trust. The vast majority of all dollars paid by the consumer on premium cigars are spent on the bigger names mentioned, which says to me that the consumer doesn’t want to take a chance, so they are buying the old standby, the name they know and trust. Some single sizes of some of these big name brands sell more than entire lines of the next tier of brands, and this was very apparent when you really looked at the retailers sitting and ordering from booth to booth.
About 300 million premium cigars will be sold in the United States this year, I would guess 80% of them (240 Million) will be owned by just the top 10 manufacturers and all the rest will split the remaining 20% percent. This is known as the 80/20 rule and it applies here. That would include hundreds of other cigar brands and companies that will battle for the crumbs or the remaining twenty percent or 60 million cigars. Several of those crumbs will amount to a fine living for some, others will just survive with it, but unfortunately others will fall as there simply will not be enough sales to cover all of their overall expenses.
Why haven’t any new cigar brands in the past 20 years broke through this barrier when all you hear is that the consumer is always looking for what’s new? One possibility is that most manufacturers have been focused on bringing to market the next thing over and over again and nobody is concentrating on building on what they already have. Another possibility might be that maybe… just maybe it takes 20 years or more to build a brand. That, I guess depends, but if you look at the cigars on the list you can see other commonalities.
It’s not the country of origin, because you have all three of the top cigar producing nations represented including the Dominican Republic, Honduras and Nicaragua. You have both corporate and family owned and operated businesses represented so that must not be the factor either. You have some employing company reps, some using brokers, some that use outside distribution and sales staff and even one that uses no sales staff at all.
What they all do have in common is consistency. Consistent marketing, brand building and cigars and blends that stay tried and true… Consistent.
Now don’t get me wrong, I’m not saying these brands are the best or not… I’m just saying they sell the best. I’m not saying that they are all good or all bad… they are all different. But what they do have in common is that they are all consistent. Consistently good or bad, I’ll leave that up to your palate, but I will tell you they are consistent, reliable and trustworthy for what they are. You may not love a McDonald’s Hamburger but no matter what, you know they are consistent… the same whether you like it or not and if there is nothing else around and your choice is the devil you know or the one you don’t, you go and buy that McDonalds Hamburger don’t you? Billions of people do and most cigar smokers are buying the big name brands, regardless of how much we talk about the boutiques and how hot we think they are. The fact is that retailers are going with what moves out of the humidors and not what’s hot or cool anymore. That’s what I saw at the cigar trade show… and I was looking. Despite the fact that there was over 100 new boutique cigars at the show, to me it looked like the Boutique Cigar Boom is over as we know it, but only time will tell. Now who feels like a hamburger?
