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A Brief History of the Cigar Industry

War, revolution and regulation have failed to snuff out the continuing story of the cigar.
David Savona
From the Print Edition:
Cigar Aficionado's 20th Anniversary, September/October 2012

(continued from page 4)

Today, the myriad companies that make, market, distribute and retail cigars worry not about who will buy their cigars, but if the government will cripple the industry with over regulation and taxes. The possibility that the Food and Drug Administration will slap restrictions on the industry, increasingly higher taxes and fewer and fewer cigar-friendly venues are the worries of the moment, and some fear that the government could ruin the cigar business.

But the legacy of the cigar boom can be seen in the heir apparents to some of the world’s most famous cigar brands.
Children of cigarmakers, who had nearly forsaken their birthrights in the industry, were once again emboldened to join their parents. Today the cigar business is rich with father/son, father/daughter, brother/brother and brother/sister teams, including the Fuentes, Padróns, Quesadas, Eiroas, Garcias, Patels, Levins, Kelners, Newmans, Plasencias, Turrents, two Oliva families (one growing leaf, one making cigars) and many more. Charlie Toraño abandoned his law practice and joined his father in 1996, and today is president of the company, becoming the fourth generation in his family in the tobacco business.

Today Quesada proudly sits at the helm of MATASA, albeit in a new, far larger and more modern cigar factory, with his two daughters, Raquel and Patricia, taking an increasingly active role in the company, along with a number of nephews, nieces and cousins. They make blends using leaves that weren’t grown in the 1980s, package the cigars in vibrant boxes with modern logos and use their Blackberries to tweet about the products to cigar lovers around the world.

Twenty years ago, cigarmakers toiled in obscurity in a business that few felt had any future. “Nobody knew who was behind the products,” says retailer Gary Pesh. Today, cigarmakers are stars, similar to celebrity chefs. And while cigar sales today aren’t nearly as vibrant as they were during the peak of the boom, the cigar market is far larger today than it was before the boom. Premium cigar imports in 2011 (the last full year available) were 278.5 million cigars, well more than two-and-a-half times their level in 1991, when only 103.6 million cigars were imported.

While the market for cigars is far larger on a unit scale, the impact of the past 20 years is far more pronounced when you look at the overall value of the market. The average price for a premium cigar in 1990 was $1.75, according to Cigar Insider estimates, giving the U.S. premium cigar industry a market value of $186 million. The average price of a cigar rose to $3.23 by 1996, giving the market a value of close to $1 billion.

Today, cigar prices have pushed even higher. While there are bargains to be found, most lie in the $5 to $7 range. Many cigars sell for around $10, and special cigars push the upper limits of premium cigar pricing to $25, $30 and more per cigar.
The average retail price of a premium cigar rated by either Cigar Aficionado or Cigar Insider in 2012 is $9.51. At that average price, the U.S. premium cigar market would have a value of $2.6 billion—14 times the value of the annual market in 1990.

The cigar world has been completely, unforgettably transformed. Cigarmakers work alongside their sons and daughters, and no one who makes a cigar in 2012 worries that consumers down the road will lose interest in their product.

“Thank God for the cigar boom,” says Carlos Fuente Jr., one of the icons of the cigar business. “For the first time in history, tobacco farmers, tobacco dealers, people who own smoke shops were all able to make a decent living.”

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Comments   1 comment(s)

Doc Diaz December 4, 2012 1:51am ET

This was a very enlightening article. An excellent summary, however I am surprised you did not mention the first cigar "boom" in 1964, which was the first real resurgence of cigars since the Golden Age of cigars, which peaked in the early 1900s and started to decline around 1920.

The first boom, in 1964, was related to a number of factors (which I have written about elsewhere) and was helped along, ironically, by the Surgeon General's first-ever report on Smoking & Health. This report claimed that, “men smoking less than five cigars per day have death rates about the same as non-smokers.” This provided a scientific halo-effect for cigars that enhanced that short-lived yet significant cigar boom in the mid-1960s.

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