Cuba's Cigar Summit
Cigar Lovers the World Over Descended Upon Havana in February to Celebrate the Past, Present and Future of Cuban Cigars
From the Print Edition:
The Cuba Issue, May/Jun 99
(continued from page 1)
Massachusetts just passed a new regulation that attempts to impose the same kind of warning labels on cigars as cigarettes, including cigar advertising.
In short, our rights have been, and are being, taken away. In many places in America, if you are dining at a restaurant and you want an after-dinner drink and a fine cigar, it's against the law. Go to the bar. Go outside. If it's raining, tough luck.
That scenario gives you some idea of the climate in which Cigar Aficionado magazine was born in 1992, and the ongoing battle against the anti-smoking forces. When people heard about the idea, the response was always the same: "A cigar magazine? You've got to be crazy." Maybe they were right.
But I'll tell you a secret. I didn't care.
Being here in Havana this morning is especially significant for me, because the idea for a cigar magazine really began right here, during my visit in 1991.
So, without research, without budgets and without a business plan, I just closed my eyes and listened to my heart.
Thus in September 1992, a new publishing category was created for the lover of the good life: the first cigar magazine. At the time, there were about 3 million cigar smokers in the United States. Today, there are an estimated 15 million cigar smokers in the United States.
Cigar Aficionado's mission seven years ago was simple and direct: "To educate and entertain. To help expand the market by introducing more and more people to the pleasures of a fine cigar." That mission remains the same today.
One of the early controversies we faced was whether or not to include Cuban cigars in our tasting reports. With the embargo waving its giant tail, thus making Cuban cigars illegal in the United States, clearly it was politically incorrect or maybe even "political suicide" to include Cuban cigar coverage in Cigar Aficionado.
Our view was simple. We could not, we would not, publish a serious international journal on premium cigars without including Cuban cigars. For a London- or Madrid-based publishing company, this would not have even been a question. But for a New York-based American publishing company, it caused considerable governmental and domestic cigar industry tension. Neither wanted it!
The magazine's international success supports our decision without further explanation. But when, in the summer of 1994, I interviewed President Castro for a cover story, the outrage in the United States from the Cuban-American community was considerable. Nevertheless, the issue was a great success because people in America, and around the world, wanted to hear from, and learn more about, a world leader.
While I don't want to be political today, I see a connection between what Cigar Aficionado has done to educate people about cigars and the potential for people in America to learn more about Cuba. The days of the cold war are far behind us now, and in every sector of the United States--in politics, in business and certainly among the American people--there is a growing momentum to end the misunderstandings of the past and begin a new era. The curiosity about Cuba is at an all-time high. And the desire is strong to be involved in the new Cuba that is being shaped today with the help and investment of the rest of the world. The time has come for new approaches on both sides of the Florida straits. But the big question remains: When will the embargo end?
And what will the end of the embargo mean for Cuban cigars? Will exports increase? Will prices increase? Will the total market grow? Will American smokers be willing to pay two or three times what they now pay for a Dominican smoke? Will they prefer the milder taste they have been smoking or the richer, spicier, stronger taste of a Cuban cigar? There is a multitude of questions, all without answers today.
As an industry, Cuba must ask itself: "Where do we go from here? Do we grow? Do we need to grow? What if we don't? What if we can't?"
Again, the future is unpredictable.
One dimension of the future in the cigar industry is absolutely clear. I dare say it's the difference between life and death for the industry. Consumers now, and more so in the future--your customers today, and future customers--will only pay for quality.
In the United States, we learned about quantity versus quality in 1997 and 1998, when more than 100 million poor quality, "no-name" cigars flooded the market. They were only on the market because of an acute shortage of established brands. Companies like Consolidated Cigar, General Cigar and Arturo Fuente were so short of cigars that they did not open new retail accounts for over two years. Once these brands were back on shelves, the no-name brands died a quick death, and their manufacturers were forced to dump cigars to discounters at pennies on the dollar.
Yes, quality matters. And quality will matter much more in the future. Price also matters. The manufacturers must set prices that are realistic. Importers, distributors and retailers must take reasonable markups. The days of hoarding "hot" or "rare" cigars are gone. Offer the cigar lover a quality cigar at a fair price or lose their business. Competition will get keener each year.
In Cigar Aficionado's robusto tasting in 1994, the top four cigars were Cuban. In our most recent issue [February], Churchills from Nicaragua, Honduras and Costa Rica, as well as Cuba, received high marks. Only two of the top six cigars were Cuban.
The message here is clear. While Cuban cigars continue to receive, on average, the highest marks in our blind tastings, cigars from the other premium cigar-producing nations are narrowing the gap. The non-Cuban cigars are stronger in taste than they had been before, in the tradition of full-bodied Cuban cigars.
Given the slowdown in the U.S. market in 1997 and 1998, many of those manufacturers who have uncontested international trademarks, such as Macanudo, Fuente, Avo, Davidoff and Ashton, are shipping their cigars, more and more, to world markets. They're receiving a warm reception.
Cuba makes great cigars. I remember great smoking moments, such as a powerful yet elegant Cohiba Esplendido, a silky smooth Montecristo No. 2, a rich, earthy Partagas Lusitania. These cigars have the finest tobaccos, and they're rolled by extraordinarily dedicated and gifted workers. But today, not all of Cuba's cigar production is up to that very special and high standard. Consistency has become a problem.
And this has been further aggravated by the explosion of counterfeit Cuban cigars.
As someone who loves cigars and cares deeply about the future health of the cigar industry, I can only ask Cuba to do the same thing that I have asked manufacturers in other countries to do. Cuba must review its premium cigar production plans. No country can expand production from 50 million to a targeted 240 million mostly handmade cigars in six years without compromising quality. It just can't be done. By any country. Including Cuba.
Let Cuba continue to expand tourism, increase production of sugar, nickel and biotech products to help aid its economic needs, but it must safeguard its most sought-after prestige export. Cigars are not commodities like rice or sugar. The only way to preserve the integrity of the Cuban cigar is to slow down its production growth.
To my mind, Cuba's exports of handmade cigars are already too high. Part of the mystique and romance of a Cohiba Robusto or a Hoyo de Monterrey Double Corona is the frustrating search for these uncommon treasures. Better to maintain their unique image and deliver a consistently high, world-class product at a high price, each and every time, than to compromise quality and fill the distribution channels to overflowing. Don't make a Cuban cigar easy to buy.
In my interview with President Castro in 1994, he said, and I quote, "The cigar has made our country famous. It has given us prestige. This prestige must be protected."
Cuba needs to tell cigar lovers of the world that it cares about its cigars, cares about the quality of its exports, more than the profits they generate. It is a very difficult philosophy given the difficulties of the Cuban economy.
I've shown you how cigar quality is improving in other countries. That improvement is only going to continue. Many cigar manufacturers have already slowed down their production. Tobacco is aging longer. Rollers are getting better trained and more experienced. And cigars are resting longer before getting shipped out the door. Cuba must do the same. That translates into better quality.
We believe that the world market will be a growing market for the handmade premium cigar, but only if the market is truly understood and supply and demand factors are considered. We all need to protect and defend the very integrity of the craft.
I wish for every cigar aficionado in the world, including Americans, to experience the pleasure of lighting up one of Cuba's great cigars. A Romeo y Julieta Churchill, a Punch Punch, a Montecristo "A". Only then will they understand just how great a great cigar can be.
During this conference, no doubt this complex market dilemma will be addressed by others. Let sound judgment, not politics or economics, prevail.
And to each of you, I offer my best wishes and a toast to your great national treasure, the Cuban cigar.
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