The American Cigar World: Small and Getting Smaller
The Huffington Post reported recently that cigars in America are an $800 million a year retail business. The article goes on to discuss the recent trend toward cigar manufacturers offering travel junkets to Internet journalists. It’s a more cost-effective approach than traditional media advertising, which the industry is too small to sustain too much of. Cigar companies are also hindered greatly by laws against tobacco advertising.
In contrast to our $800,000,000 yearly retail revenue, the six American cigarette companies spend $4 billion a year in advertising alone. McDonalds makes $22.6 billion in revenue per year. The U.S national debt is over $13 trillion! The entire cigar industry in America is roughly the size of Facebook’s total revenue last year.
Enough stat salad. The point is that the cigar industry, in the grand scheme of things, is still pretty small. Our customers, on the whole, represent the wealthier segments of society. The Financial Times reports that Cuban cigar manufacturers are eyeing the increasing number of millionaires as an answer to profitability in light of smoking bans and taxes worldwide. We mean not to reinforce the stereotype of cigar smokers as elitist or well-to-do, but like golf courses and gold watches, the price for admission in the cigar world can be (but doesn’t have to be) steep.
The simple fact, especially brought to light when you look at the national debt, is that the economy worldwide has been suffering. People are foregoing certain luxury items as budgets crunch, and cigars fall squarely in that category. Add to that unprecedentedly high tobacco taxes and public smoking bans, and the challenges to market expansion seem insurmountable. A look at searches for “cigar” on Google reveal a slowly contracting market for premium tobacco products.
Then again, the cigar boom of the 90’s came seemingly from out of nowhere, so who knows? We prefer to look at the glass as being half full… the intimacy of our industry is what allows us to grow organically and steadily. We’re on a first-name basis with the majority of our colleagues, and generosity runs rampant. Our industry is big enough to produce more amazing products that one could ever hope to experience, yet small enough so you can walk right up to the CEO of a cigar company and share a drink and a smoke.
Finally, we unabashedly love our ravenous customer base. Full of fun-seekers and pleasure connoisseurs, we couldn’t imagine doing business with a more enjoyable bunch. We’re all in this together!