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World’s Biggest Cigar Producer Eyes Premium Market

David Savona
Posted: February 8, 2013

The company behind America’s best-selling cigar brand has taken a new interest in handmade, premium cigars.

Swisher International Inc., a company that sells more cigars in a day than many cigar companies sell in an entire year, has formed Royal Gold Cigars, a premium cigar division that is being headed by cigar-industry veteran Alex Goldman. Royal Gold is going to focus on selling cigars made by hand, from mixed-fill cigars selling for a couple of dollars each up to true, premium handmades with suggested retail prices approaching $10 a cigar.

“Royal Gold cigars is a fresh start in the premium business for Swisher International,” Goldman told Cigar Aficionado. “Royal Gold will produce and market great handmade cigars at reasonable prices for the discriminating premium cigar connoisseur.”

Goldman, a fourth-generation tobacconist who once ran the distributor House of Oxford and retailer Mom’s Cigars, said Royal Gold’s inaugural product would be a handmade cigar made of a mixture of long and short-filler tobacco, a type of smoke known as a Cuban sandwich. The brand, called Gold Strike, will retail for about $2 a cigar. It’s going to be rolled at the Nicaraguan American Cigars S.A. (NACSA) factory in Nicaragua, utilizing tobaccos grown by Tampa, Florida’s Oliva Tobacco Co. Goldman hopes to have Gold Strike on sale by April or May.

Royal Gold’s higher-end products will make their debut over the summer at the International Premium Cigar & Pipe Retailers trade show. “Our first three handmade long-filler premium lines will all launch at IPCPR—one each from the Dominican, Honduras and Nicaragua,” said Goldman. “The plan is to have a variety of strengths and flavor profiles across the different brands and a suggested retail between $4.50 and $8.50. One of the brands will be a rejuvenated version of Casino Gold, which is a premium cigar brand that the old Swisher premium cigar division marketed for many years. The other two brands are completely new names and concepts.”

Today, Swisher International sells more than 1 billion cigars a year in more than 60 different countries. (Some boutique cigar producers, by comparison, make fewer than 1 million cigars a year, and the entire premium import market is less than 300 million cigars.) Swisher has been making cigars since its founding in 1861 by David Swisher, and in 1958 the company introduced Swisher Sweets, a cigar made by machine with a sweetened tip. Today, Swisher Sweets are, by volume, the best-selling cigar in the United States.

In 1966, Swisher became a public company when it was acquired by American Maize-Products Co. In 1995, American Maize was sold, but the Ziegler family, which controlled American Maize, immediately bought back Swisher. In 1996, with the company experiencing strong sales in the midst of the cigar boom, Swisher went public as Swisher International Group Inc. The company invested heavily in the premium cigar segment, building factories in Honduras and the Dominican Republic, but slashed its premium division in 2002, divesting its Bering brand and refocusing on its core machine-made market.

Goldman said that Swisher is not pursing the same strategy in the premium market this time around.

“Swisher does not currently and has no plans to own a premium cigar factory,” said Goldman. “Royal Gold cigars will be working with various factories and cigar personalities in Honduras, Nicaragua and the Dominican Republic that I have had relationships with for years through my experience as a wholesaler, retailer, brand owner and distributor.”

For more on this deal, and on Swisher’s history in the premium cigar business, see Tuesday’s Cigar Insider.