A tycoon friend of mine in New York recently told me that there are two businesses that are bulletproof during a recession -- tobacco and booze. So, as the U.S. economy, not to mention the world market, continues its path into what might be a deep recession, I suggest that we smoke and buy as many good cigars as possible.
Plenty of cigar smokers already have the idea, and I am probably preaching to the converted who are reading this column. For instance, as blue-chip stock values were tumbling in London City's markets in mid-October, cigar prices for superpremium smokes remained firm down the road at a Christie's auction. The sale in the auction house's King Street room totaled close to $300,000, with 90 percent of the slightly more than 400 lots selling.
With some disbelief, I sat in the front row for close to two hours as lot after lot sold. The average price per cigar went for more than $20, with some boxes of 25 smokes going for more than $10,000. For instance, the magnificent Cuban Dunhill robusto, the Cabinetta (a cigar I rated 100 points in Cigar Aficionado's October issue), set an auction record at £7,200 (about $10,500) for a box of 25. And that was without the 10 percent buyer's premium, which the successful bidder had to tack on.
"I had a client who wanted a perfect box and he was willing to pay for them," said a beautiful blonde American cigar merchant, who bought one of three boxes on sale. She passed on the other two boxes, which went for £4,200 (about $6,200) and £3,200 (about $4,700). The former had less handsome wrappers while the latter only included 21 cigars.
Many bidders were Americans, who were obviously taking the advice of President Bush by putting a little life into the global economy. (Our president might draw the line with Cuban cigars, but he is known to enjoy a good smoke from time to time). Americans bid by mail, fax, phone, proxy and, of course, in person. The remaining bidders in the room were a few Brits and Chinese, but far fewer of the latter than in the past. One bidder from the state of Illinois, who was sitting in the group of 50 or so in the auction room, seemed to be bidding for three or four different people, fumbling among his various black-and-white bidding cards with their different numbers.
"I thought prices were reasonable on most of the cigars and there were very good cigars available," he said, without giving his name -- there was no use in asking anyway. "It shows that the premium cigar market for aged cigars is still very strong."
The success of the sale also proves that, for a serious cigar smoker, a great smoke remains more than a luxury. It's a necessity, regardless of the price in many instances. A great cigar is something that we are not willing to give up, even when the world around us may seem to be crumbling. Smoking a good cigar is more than a chance to escape the stress and ugliness around us. It's something that enhances our life, like excellent wine and food, fine music or a good book.
Look at my tycoon friend in New York for example. He is smoking all of his great cigars at the moment, usually starting his day with a Cuban Davidoff Dom Perignon (about $250 a cigar). "I figured that I better enjoy each day as it comes now," he said slightly nervously, thinking about the decline of his business and stock values. "You just don't know what is going to happen next."
It's that uncertainty that drives us all closer to home, giving us a sort of "nesting" instinct. We better realize that it's time to spend more time at home and take more time to relax with family and friends. A fine cigar is all part of that -- as long as your family lets you smoke at home.
This desire for familiar surroundings is apparently why the sales of home videos and entertainment equipment are on the rise in the United States, as are the sales of just about anything else that makes life at home a little more comfortable. A cigar-smoking friend, who is a restaurateur/wine merchant in Manhattan, said that his wine sales from his wine shop were very strong this autumn, despite September 11. "People may not want to go out to restaurants and blow a lot of money, but they are more than willing to buy a good bottle of wine and take it home to enjoy," he said. He's doing the same with cigars, but his wife won't let him smoke at home. So he's smoking in his large four-wheeler during his 45-minute drive home.
Some people (inevitably nonsmokers) mistakenly thought that a great cigar was simply a luxury product, and that cigar sales would take a dive after September 11. They naively believed that a good smoke had more to do with a pretty Cartier watch or a flashy Gucci tie than a glass of fine wine or a good meal. But while luxury products in general have been taking a beating since this fall, premium cigar sales are holding their own. Friends in the fashion business in Italy tell me that brands such as Prada and Gucci have lost as much as 40 to 50 percent of their global business, particularly in the United States. Obviously, for many people, it doesn't feel right going out and spending pockets full of money on a Prada suit or Gucci shoes after September 11, but buying and smoking a great cigar is something they still appreciate -- the pleasure is a hell of a lot less expensive.
For example, Enrico Garzaroli, the bear-like owner of the Graycliff Cigar Co., says that his cigar business couldn't be any better. He is selling plenty of his finely crafted smokes. On the other hand, his hotel and restaurant business in Nassau, Bahamas, is in the doldrums. "My cigars are selling incredibly well right now," he said, puffing on one of his double corona blue label smokes in a New York bar last October. "The rest of my business is #*@*. I have had nothing but cancellations at the hotel and restaurant."
Garzaroli isn't surprised, though. He and others have seen it all before. It was the same in the early 1990s during the Gulf War. People cut back on just about every luxury imaginable -- except for cigars. "I think that people actually smoked more during Desert Storm," said one New York City cigar shop manager I spoke to last fall. "They would rather eat or drink less than not enjoy a good cigar."
This all doesn't mean, however, that the cigar manufacturers (particularly Cubans) reading this column should get some dumb idea such as raising their prices. If anything, they should give us a break and drop them. And they should deliver better quality.
I can't help but think that Cuban cigars are going to take a beating in the marketplace, if their quality doesn't improve. Before September 11, the talking heads in charge of the Cuban cigar business said that they were going to make (and sell) close to 150 million cigars in 2001. I assume that they have now adjusted their forecasts, and plan to do less. However. the readjustment might improve the quality of their cigars. When I visited a few cigar factories in Havana last August, I was appalled by the general lack of quality.
The flaws were right out in the open for everyone to see, from inferior filler tobacco and wrappers to sloppy craftsmanship. One cigar sorter, who was grouping the finished smokes by color, said to me that the "wrappers were incredibly ugly and marked." Added a roller in the other room, "Don't blame us. We are just doing the best we can with what we have. Whenever there is a problem, people always blame the cigar roller."
Key Cubans in the cigar business say that the percentage of rejected cigars coming from factories has actually decreased. In some factories, officials have even introduced new machines that check the draw of cigars, and they say that these machines never make a mistake in detecting plugged cigars. Did they ever think that maybe the percentage of rejected cigars is down because more are being shipped out of the factory to the poor retailer and consumer?
If the Cubans don't improve their quality soon, they simply won't be able to sell their cigars. Serious cigar smokers are not going to spend their precious money on mediocre cigars -- and we are all watching our dollars very closely. It's the same with all cigars, whether they come from Cuba, Nicaragua or the Dominican Republic. Quality is what counts now. What we really need are $15 and $20 quality cigars that sell for $10 and $8.
The bottom line, however, regardless of price, is that we all need great cigars in these troubled times. That's why the autumn sale of aged, premium Cuban cigars at Christie's went so well.