A Message for America
Posted: Jun 6, 2008 2:52pm ET
Manuel Garcia, the commercial director for Habanos SA., the global marketing and distribution organization for Cuban cigars, probably knows more about the Cuban cigar business than anyone on earth. He has been selling Cuban cigars for Habanos (and what it was called earlier, Cubatabaco) around the world since 1989, and he has seen amazing changes in the industry, both in production and distribution and marketing.
Each year, the 50-year-old travels about 220 days crisscrossing the globe preaching the quality and uniqueness of Cuban cigars. As I said in my blog yesterday, his company, Habanos, distributes Cuban smokes in more than 160 countries around the world, not including the United States, of course. Or at least not officially.
I would say that a large percentage of Cuban cigars sold in Canada and Mexico end up in the hands and mouths of Americans. And I suspect that a significant percentage of Cuban cigars sold by top cigar merchants and airport shops around the world go to Americans.
It’s not that hard to get a Cuban cigar in many cities in the states. We all know where to go. Just look at my video from Los Angeles a few months back. I smoked a delicious Partagas Serie D No. 4 for $18—about the same price as London. Granted, I think a lot of Cuban cigars being smuggled and sold in the United States are fakes, but I think the real aficionado knows the difference and he or she pays a premium for an illicit smoke.
In fact, if you think about it, we are talking about significant numbers of real Cuban cigars being smoked by Americans. If Americans accounted for only 10 percent of the world sales of Cuban cigars, then their business would add up to about 15 million cigars. And I think that that is very possible. I know cigar merchants in London, Paris, Madrid, Hamburg, Hong Kong, Tijuana, Cancún, even Auckland, who’s sales of Cuban cigars to Americans range better 20 and 40 percent of their total sales each year.
Anyway, I was thinking as I was interviewing Manuel yesterday morning what would happen to Cuban cigars when Americans can LEGALLY buy them? So I asked the question. He also has a message for Americans in the video with this blog.
“You know the market in the U.S. better than I do,” he said. “It consumes about two times more premium cigars than the world, if you consider that we sell about 150 million premium in the world each year. So If the market opens, it is a market with huge potential. But I don’t think that think that all the smokers are going to go smoke Cubans. Some will change but others will keep with what they are smoking.”
I then asked him how Cuba would cope with such a huge market just 90 miles away from the island. Can his country increase production and maintain quality to suffice such growth?
“I think that Cuba both in the agriculture and industry is preparing for that,” he said reassuringly. “We have a reserve of tobacco and we now have the infrastructure to make the extra cigars. The land is available [in Pinar del Río], so we can increase plantings of tobacco. And we can increase production of cigars. We just need a little more time to organize it properly. We are getting ready for that. We don’t know when, but we will be ready.”
I did mention to him that the last time Cuba tried to increase its production of cigars was a disaster. If you don’t remember, quality went down significantly in 1999, 2000 and 2001 when the island had a crazy goal to make and to export at least 200 million cigars. They made hundreds of thousands of cigars that didn’t draw. But, luckily, they dropped the plan and moved back to making high quality cigars.
“We learned a lot from that,” admitted Garcia, who said in so many words that the decline in quality was not due to bad tobacco but poor rolling. Essentially, they didn’t have enough experienced rollers to make all those extra cigars.
Apparently, it’s different now, although the annual production of premium cigars on the island has been the same ever since the failed experiment to significantly increase cigar exports. Vamos a ver, as they say. We will see..
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