Sunday, March 08 2009
Larry Monte is a devoted La Gloria Cubana fan. He is also the owner of Monte's Pueblo Pipe in Albuquerque, New Mexico and decided he wanted to do something special for La Gloria and for his store.
So the Club La Gloria Cubana was born, with the grand opening held on Friday (March 6) in Monte's new facility in Albuquerque. It's the first of its kind in New Mexico, with the lounge taking up 2,700 sq. ft. over two floors of a 65-year-old building. The interior was redone to create a Southwestern-styled club, but with accents from the Dominican Republic. There are 108 private cigar lockers as well as a full range of the La Gloria Cubana line.
Ernesto Perez-Carrillo, the man who made La Gloria Cubana famous in the U.S. will be on hand for the grand opening festivities, along with New Mexico Governor Bill Richardson (who enjoys cigars but nevertheless signed a statewide smoking ban!), Albuquerque Mayor Martin Chavez and other dignitaries.
"The lounge is part-and-parcel to our strategy pf developing branded cigar lounges at preferred tobacco retail shops in the U.S. and abroad," noted General Cigar Director of Public Relations Victoria McKee, indicating that this first Club La Gloria Cubana won't be the last.
McKee added that as a result of Monte's request for a La Gloria-branded space, "the General Cigar marketing team, led by [La Gloria Cubana marketing guru] Michael Giannini developed a concept for the branded lounge, created the logo and developed specific elements to brand the space."
>> "We will take decisive measures to mitigate the effects of possible volume declines for U.S. cigars [sales]. For U.S. machine-made cigars, we expect significant trade hoarding in the first quarter, following by destocking effects in the second quarter."
That, in a nutshell, is the outlook of the biggest player in the U.S. premium cigar market, Swedish Match. It owns General Cigar and included that comment in its financial report for the whole of 2008.
Cigars and snuff/snus are the two financial drivers for Swedish Match and account for 28% and 29% of the company's sales, respectively. But the smokeless side contributes 53% of Swedish Match's profits compared to only 22% for cigars. The remaining sales come from chewing tobacco (7%), pipe tobacco and accessories (6%), matches and lighters (12%) and distribution operations (18%).
There were a lot more details on cigars in the year-end report, including:
=> Swedish Match's cigar sales actually increased in 2008, specifically due to the acquisition of U.S. retailer Cigars International in late 2007. Excluding Cigars International, the report noted that "premium cigar sales in the U.S. declined by 8 percent in local currency versus [the] prior year as a result of lower volumes.
"Premium cigar volumes have been lower in 2008 as retailers have been managing inventory levels to reflect the current market. Premium cigar retailers have been faced with both a more difficult credit environment and reduced consumption. Sales of mass-market cigars in the U.S. declined by 2 percent in local currency. Volumes were negatively impacted by some destocking following the hoarding effects in the third quarter in anticipation of a September price increase."
=> Overall cigar sales totaled $405.76 million (all financial figures are converted from Swedish kronor), up 7.2% over 2007, with profits down 6.5% to $76.5 million from $81.8 million in 2007. In local currencies, sales were up by 8% and profits down just 2%. The trend was toward smaller and less expensive cigars in the U.S. and Europe and new smoking bans hurt sales in France and the Netherlands. Profit margins were also trimmed, from 21.6% in 2007 to 18.8% in 2008.
=> In the fourth quarter, in which figures are fully comparable with 2007 as Cigars International's results were included in both years, total cigar sales went up by 13.8% in Kronor, but were down 1% in local currencies.
Swedish Match's report also included an interesting look at the U.S. cigar market, the world's largest:
=> The premium cigar market is estimated at 270 million cigars a year in sales, down from more than 300 million last year. Swedish Match is estimated to hold a 30% market share and the long-term view is that the U.S. premium market is stable, but with fluctuations on a year-to-year basis.
=> The machine-made market is estimated at seven billion cigars sold annually, including little cigars, almost 26 times as large as the premium market. In machine-mades, Swedish Match claims a 5.8% market share in sales volume, standing fourth behind Swisher International (32.1%), Imperial Tobacco (in Altadis U.S.A.; 18.4%) and Altria (in John Middleton, Inc.; 15.0%). Swedish's long-term volume outlook for this sector is "up."
Swedish Match estimates the total European market for cigars – premium and machine – at five billion sticks per year with a "stable to slightly down" outlook.
>> The annual Avo limited-edition blend is an early-season highlight for smokers and the start of Avo Uvezian's months-long birthday celebration!
He's getting ready for his 83rd birthday on March 22 with the release of the ninth limited-edition cigar from the Avo brand. The Companero is a 6-inch by 54-ring Toro with an Ecuadorian-grown wrapper, Dominican-grown binder and specially-aged, five-leaf filler blend of Dominican and Peruvian leaves.
"The AVO Companero is the best blend ever released under my name from the Occidental Kelner Cigars factory in the Dominican Republic," said Uvezian. "I am extremely pleased with the results of the work Henke Kelner and I have put into blending this cigar and look forward to sharing it with consumers and hearing their reaction."
As usual, the annual launch of the Avo limited edition will be saluted by a series of dinners featuring Avo himself on the piano. The first is set for March 16 at the Davidoff of Geneva store on Madison Avenue in New York, followed by a March 19 dinner at De La Concha in New York; the full schedule still to be released. The Companero will be offered in boxes of 10 with the special Companero logo embossed in gold on the top of the box. Prices are reportedly $159 per box.
- Rich Perelman in Los Angeles
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Reprinted by permission. "Heard in the Humidor" is a publication of Perelman, Pioneer & Company. Copyright 2009; All rights reserved.
