Why U.S. cigar companies can’t wait for you to light up Cuban cigars

[El Presidente]

By Bryan Llenas

Published September 09, 2015

Fox News Latino

http://latino.foxnews.com/latino/money/2015/09/09/why-us-cigar-companies-cant-wait-for-to-light-cuban-cigars/

The American cigar industry is looking forward to the day Cuban Cigars will be sold openly in the United States, and is not worried about the iconic cigar hurting business because, frankly, they aren’t as good as you think they are.

“I welcome the cigars coming in from Cuba,” Kaizad Hansotia, CEO of South Florida-based Gurkha Cigars, told Fox News Latino. “It’s going to be great for the industry.”

As the CEO of one of the leading luxury cigar companies in the world, Hansotia believes the possible opening of Cuban cigars into the U.S. market will inevitably benefit everyone in the industry. There’s no question the “mysticisim,’ as he calls it, of the Cuban cigarro will be an allure for customers.

On the other hand, Hansotia believes the Cuban cigars do not pose a threat to U.S. companies because the quality of their product is lacking. When asked if he believes the Cuban cigar is the best in the world, Hansotia strongly dismissed it.

“Absolutely not. In my opinion it isn’t.” He believes American customers are now used to much more complex flavors today that simply can’t be matched by a Cuban cigar.

“The flavor profile of a Cuban cigar is going to be very different than most of the American corporations because we can get tobacco from the U.S., Ecuador, Italy, Brazil, and it creates such a wide profile taste value,” Hansotia explained. “It’s amazing.”

Thanks to the recent restoration of diplomatic ties between Cuba and the U.S. by the Obama administration, Americans now traveling to Cuba can bring back $100 worth of cigars. The loosening of restrictions has Cigar aficionados in the U.S. pondering what could happen if the 1962 trade embargo were to end – allowing Cuban cigars to flow into the U.S. marketplace freely.

“We would see an increase in sales at the retail level,” said Kevin “Kip” Talley, Senior Director of Federal Legislative Affairs from the International Premium Cigar and Pipe Association. “People are curious about Cuban cigars.”

Talley emphasized that while “the introduction of Cuban cigars would shake up the industry a little bit,” he said, “great cigars are already out there and I think a lot of people already know that.”

Since 1962, the U.S. Cigar industry has done nothing but boom as America became the largest cigar market in the world. Americans are now smoking about 40 percent of the world’s cigars and between 2000 and 2012, cigar sales in the U.S. more than doubled from 6 billion to more than 13 billion cigars a year.

U.S. cigar experts are skeptical that the Cuban cigar industry could even meet the demand of the American market not only in terms of volume, but in quality control of the product.

“When you get a box of Cuban cigars and around 10 to 20 percent of the cigars are usually plugged or the quality control is not there,” Hansotia said. “To an American customer, when you go and sell a box to them and 20 percent of the cigars are bad you’re going to have a big problem. They are going to return the cigars to you.”

A lot has changed since the Cuban embargo went in place. Dominican Republic, Honduras and Nicaragua have become the top three cigar-producing countries in the United States and in that time they’ve advanced and adopted manufacturing practices that, Telley believes, have not been in place in Cuba.

“These manufactures are rotating their crops, they are keeping their soil fresh, they are practicing strong economic and agricultural practices that I don’t think Cuba is really following,” Telley said. “They are pushing for as many products as possible for the market place each year and that’s really hurting their soil, really the blood of the tobacco plant.”

Whether prices of Cuban cigars would rise or fall is up to debate. Some believe, for example, that the loosening of restrictions would increase the demand of Cuban cigars or Habanos which have limited annual supply.

Will the mystique surrounding Cuban cigars be enough to propel it in the market place? We’ll see, but for now, it seems U.S. cigar companies are hoping that mystique will at the very least lead to more cigar aficionados.

[dangolf18]

That's rich coming from the guy who produces the most overpriced dog turds on the market...

[HarveyBoulevard]

When asked if he believes the Cuban cigar is the best in the world, Hansotia strongly dismissed it.

“Absolutely not. In my opinion it isn’t.”

I saw a drunk the other day and asked him if he had an alcohol problem and he said he didn't...

I saw a fat guy the other day and asked him if he had an eating problem and he said he didn't (I'm a fat bastard so shut it)...

I saw a lawyer the other day and asked him if he had a 'truth telling' problem...and he said he didn't (see note above)

I guess if you don't consider the source, everything sounds true!

[Pariah89]

I saw a drunk the other day and asked him if he had an alcohol problem and he said he didn't...

I saw a fat guy the other day and asked him if he had an eating problem and he said he didn't (I'm a fat bastard so shut it)...

I saw a lawyer the other day and asked him if he had a 'truth telling' problem...and he said he didn't (see note above)

I guess if you don't consider the source, everything sounds true!

Haha, yup.

[Habana Mike]

Haters gonna hate

[Liga1069]

I buddy of mine introduced a new brand of cigars to the industry about two years ago - they are catching on, and he repeats much of what is said above, specifically this part:

A lot has changed since the Cuban embargo went in place. Dominican Republic, Honduras and Nicaragua have become the top three cigar-producing countries in the United States and in that time they’ve advanced and adopted manufacturing practices that, Telley believes, have not been in place in Cuba.“These manufactures are rotating their crops, they are keeping their soil fresh, they are practicing strong economic and agricultural practices that I don’t think Cuba is really following,” Telley said. “They are pushing for as many products as possible for the market place each year and that’s really hurting their soil, really the blood of the tobacco plant.”

What he and his fellow cigar makers most look forward to, is not an opportunity to buy Cuban smokes, but rather the opportunity to buy Cuban tobacco and blend those unique flavors with the blends they are currently creating from primarily Nicaraguan plants.

[Colt45]

After a brief perusal, I personally think the complexity comment is way off. But I also feel that the quality comment (which I read as consistency of construction and flavor), to be pretty much on point.

[Roc585]

I buddy of mine introduced a new brand of cigars to the industry about two years ago - they are catching on, and he repeats much of what is said above, specifically this part:

A lot has changed since the Cuban embargo went in place. Dominican Republic, Honduras and Nicaragua have become the top three cigar-producing countries in the United States and in that time they’ve advanced and adopted manufacturing practices that, Telley believes, have not been in place in Cuba.“These manufactures are rotating their crops, they are keeping their soil fresh, they are practicing strong economic and agricultural practices that I don’t think Cuba is really following,” Telley said. “They are pushing for as many products as possible for the market place each year and that’s really hurting their soil, really the blood of the tobacco plant.”

What he and his fellow cigar makers most look forward to, is not an opportunity to buy Cuban smokes, but rather the opportunity to buy Cuban tobacco and blend those unique flavors with the blends they are currently creating from primarily Nicaraguan plants.

Absolutely nailed it! Honestly, I think there could be some outstanding blends created! I've had a couple blends before and thought very highly of them.

[oliverdst]

I insist: most north americans who still don't smoke CC will not pay the extra price for cubans.

[stogieluver]

Fine with me. I hope he's right. More for me.

[RickHendeson]

I insist: most north americans who still don't smoke CC will not pay the extra price for cubans.

At least not after the fad effect wears off

[Rye]

Coming from a man who

Doesn't smoke cigars, this is not worth the battery life it took to read.

These numbers seem a bit off to me as well.

[CUBANO]

That's rich coming from the guy who produces the most overpriced dog turds on the market...

I agree with you 100%

[Kyoung]

Fine with me. I hope he's right. More for me.

Me too! I am interested to see what kind of blends can be created with access to cuban tobacco though. That being said, I don't think that will change my CC preference over other smokes!

[Fumadoro]

I see his comments as bravado. He has to put up a strong front to not look weak in the eyes of his consumers and his competitors, who are all saying the same thing. Though it isn't so long ago when the US had a very conservative federal government and the embargo ending was a crazy idea that I remember seeing these guys at events talking about how much they loved smoking cuban cigars. Now that the embargo lifting is more of a "when" than an "if", they need to step up their rhetoric.

[cigcars]

At least not after the fad effect wears off

We have to think about the poor darlings who are going to be victims of plenty of fakes out there (as if there aren't many - too many anyway) that are going to taint their opinion about Cubans before they get a good quality authentic one.

[santela]

Well he's definitely not wrong about the quality of Cuban cigars... We've all been victims of crap Cuban quality control.

Aside from that I call bullshit.

[DrunkenMonkey]

I insist: most north americans who still don't smoke CC will not pay the extra price for cubans.

I hope you're right. Let them smoke the other cigars. They do have plenty to choose from. But I think that there are a lot of cigar smokers in the U.S. who just never thought of trying to figure out how to get Cuban cigars. A lot of those guys will walk into their first LCDH, fire up a Hoyo Epi 1, and have a revelation. They will be the ones who will drive up the prices long term, and honestly, that will be the natural market price for the cigars. I think the embargo is having the effect of unnaturally depressing the price by eliminating that part of the demand. But we will soon find out, I hope.

[PointFivePast]

I do think it will be interesting to see how many of the non-CC-acquainted American smokers adjust to the quality control issue. With Cuban cigars, you definitely have to use your own judgement and the judgement of a quality seller (such as Rob here) to pick the best out of the batch. It will be an adjustment for the majority of the American market that is used to buying box after box of identical cigars. I think many will be turned off getting burned when buying the throwaway boxes for cheap while not understanding that the premium paid for the exact same marca and vitola results in a better smoke.

[El Presidente]

It will be a madhouse for a while.

• If Costa Rican fake peddlers were listed companies, you would be buying shares right now.
• The vintage market will go through the roof.
• 2 day FEDEX delivery Woohoo!
• Price increases, stock shortages (more than normal).
• The Romeo y Julieta No 3 tubos will become a premium cigar.
• "Old school Cuban flavour" will come to symbolize pre 2015.
• The e-mails Di....think of the e-mails!!!!
• I may end up working for Hamlet

[anacostiakat]

That article is a real shocker!

I do not believe Cuba will sell tobacco. Clearly they need to make a more consistent cigar.

Yea it will be wild at first.

[Smallclub]

Absolutely nailed it! Honestly, I think there could be some outstanding blends created! I've had a couple blends before and thought very highly of them.

I can't see how; anyway why the cubans would sell leaves when they need them for an increased production?

For many amateurs Habanos are good precisely because they are puros - there is a reason old time aficionados are absolutely NOT interested in NC cigars blended with some 3rd class cuban leaves…

[oliverdst]

It will be a madhouse for a while.

• If Costa Rican fake peddlers were listed companies, you would be buying shares right now.
• The vintage market will go through the roof.
• 2 day FEDEX delivery Woohoo!
• Price increases, stock shortages (more than normal).
• The Romeo y Julieta No 3 tubos will become a premium cigar.
• "Old school Cuban flavour" will come to symbolize pre 2015.
• The e-mails Di....think of the e-mails!!!!
• I may end up working for Hamlet

glass top boxes

[btp1979]

As far as pricing goes, currently CC's are not any more expensive than good quality non CC's so I really don't think that will be a big issue for the American market. Granted prices will go up, but that will be because of the American market demand as well.

[topdiesel]

The only thing about this article that might really happen is that curiosity about CCs might bring in a whole new crowd of smokers who will inevitably smoke both Cuban and non-Cuban. The shear number of new smokers would boost sales for both CC and NC. Either way win for companies/governments that sell either one.