Why Does Habanos SA Discontinue Cigar Lines?

[jwr0201]

First, please excuse if this subject has been queried here. I have often wondered why Habanos SA would discontinue such successful and/or quality cigar lines such as the Serie du Connaisseur. It seems to me that it would be a benefit to have a high quality and sought after line that presumably would be higher in price and therefore higher profit. I can understand lines that are underperformers and non-sellers, but not the ones that are considered by so many to be among the best. Any opinions?

[Ken Gargett]

because the faceless men of habanos are cowboys-supporting, bleeding heart, nsw-following, teetotalling, redneck, sauv blanc drinking (yes, i know), selfie-taking, justin beiber fans who are as useless as chocolate teapots and white crayons and who must make their decisions on a highway because that is where accidents happen and who'll never be the men their mothers were.

but we do love them (and we know they'll take a holiday joke - rob told me to say all that).

[Habana Mike]

First and foremost, from a business perspective I imagine (hope) they must be doing some analysis on what is/was selling and contrast that with production and carrying costs.

Inventory control drives production and slow moving items typically get cut in any industry.

Apparently there are many more consumers now that prefer short, fat, double banded cigars over many of the classic vitolas. The former (LE/RE/new sizes) also must generate higher revenues and profits due to the markups we see over standard production.

Moving from several to just a few vitolas per marque reduces overall packaging and production costs and ultimately drives many consumers to the brands that produce the vitolas they prefer

For one, while I'd prefer to smoke more of the traditional vitolas more often, I am forced more and more to the current offerings which only propagates this further.

[Habana Mike]

That, or what Ken said......

[Lotusguy]

Money

[Ken Gargett]

That, or what Ken said......

i was just about to agree with you.

shall we just accept that the two posts are not mutually exclusive.

[Habana Mike]

Absolutely. Or should that be absolutely not?

I think Klaus's response was the most eloquent, succinct and accurate though!

[Sophistic]

From what ive seen and read, a lot of cigar smokers are crazy for everything thats new and/or limited. So lines have to be discontinued to make room for new ones.

[Jeremy Festa]

I only smoke discontinued

Sent from my iPhone

[Smallclub]

To keep cigar forums alive…

[CaptainQuintero]

They've pretty much stopped deleting now, for the time being anyway. I think they finally realised that they were gutting and irreversibility killing what made Cuban cigars the best in the world.

They still have a way to go before they have repaired the damage as far as I'm concerned.

They're still about 8 years behind the market trends. Ie now bringing out a 60 RG donkeydong and scaling up ring guages across the releases to copy the NC manufacturers, while the NCs have actually been moving away from that and back to lanceros for the past few years.

[LGC]

Because a lot of smokers don't mind paying a substantial premium for cardboard with a picture, boxes with a lacquered finish, velvet bag, a second band, a "new" cigar with with a slightly rounded head or couple mm difference in circumference, rejuvenation of a dormant brand, etc., etc. As was stated earlier, it all comes down to profit. Marketing is aware of the fact that many "smokers" are buying into the exclusivity factor and are willing to pay huge markups for unproven cigars. A $6-$8 will have some pleasant flavors, but a newly released $30 cigar will give you an all over orgasm. At the dinner table, people "eat" with their eyes. Many do the same with cigars.

[Fugu]

Because a lot of smokers don't mind paying a substantial premium for cardboard with a picture, boxes with a lacquered finish, velvet bag, a second band, a "new" cigar with with a slightly rounded head or couple mm difference in circumference, rejuvenation of a dormant brand, etc., etc. As was stated earlier, it all comes down to profit. Marketing is aware of the fact that many "smokers" are buying into the exclusivity factor and are willing to pay huge markups for unproven cigars. A $6-$8 will have some pleasant flavors, but a newly released $30 cigar will give you an all over orgasm. At the dinner table, people "eat" with their eyes. Many do the same with cigars.

Very well performing marketing, if you ask me. And I bet we are all guilty of having bitten the baited hook already, some of us to a lesser, some to a greater extent. In some cases, there is little choice left.

In addition to what HabanaMike and Brandon (and of course Ken…Happy Bday!) said, there is another aspect, which I was always wondering about, and perhaps those fellows in the know, who may have more insight into the industry, might be willing to share their views on:

Sure, it’s all about following a fashion, the need to save tobacco for the new releases, cutting slow sellers, simplifying packaging and higher profit margins in the “luxury” department etc.. True, but a significant part of it seems also to be about rationalization of processes and increasing productivity, wouldn’t it? The first heavy wave of discontinuations hit after Altadis came into play in 2000 (most discont. happening around 2002), and a second wave set in when Imperial took over Altadis in 2008, with most discontinuations then, if I remember correctly, coming into effect around 2009-2011.

A circumstance that might perhaps also come into play here is that the long and skinnies are just more difficult to make. It is more labour per unit. Getting a thinner-gauge cigar right in terms of construction will be more difficult than making a thicker-gauged stick. That is, I believe, because a thinner rg is less forgiving with regard to over- or underfilling, correct bunching and also with regard to getting the blend right and likewise consistent. The latter parameter primarily because there is less material making up the blend, and the relative importance/influence of single leaves or even parts thereof becoming more pronounced with regard to taste and also burn characteristics. This certainly asks for higher roller’s skills (a problem we observed before during the difficult period, in particular with the L&S) and thus will influence output rate (roller’s speed so to say), the quote of rejects and thus overall productivity, doesn’t it? Could this also be a factor driving the move away from the L&Ss in favour of the thicker ring gauges?

In addition or as a consequence of that trend, all these new, mainly thicker vitolas do take up more tobacco per unit. So how can Cuba still meet with the number of sticks to be produced per annum? 70 Mio sticks today or tomorrow may be representing much more tobacco than 70 Mio sticks 10 or 20 years ago? Is this being reflected in the simultaneous trend of extending the range in several marcas also towards the very short half coronas like HUHC, Monte Media Corona or short-fatties like Monte PE, Trini Vigia, as consequence of that? As a kind of partial volume compensation?

And, as the Captain says, them being eight years behind – perhaps it is finally time for Cuba to again spiritedly and confidently setting the trends instead of panting behind, now with the probable new chances and markets arising on the horizon.

Just a few thoughts.

[Colt45]

A circumstance that might perhaps also come into play here is that the long and skinnies are just more difficult to make. It is more labour per unit. Getting a thinner-gauge cigar right in terms of construction will be more difficult than making a thicker-gauged stick.

If that is the case, what does it tell us? I could read it as they don't have (are unwilling to pay/train) rollers capable of consistently producing quality cigars in these sizes. So, they take the easy way out.... (robustos are easy!)

At the end of the day, they've cut what doesn't sell - if Bolivar Corona Extras were flying off the shelves, we'd still be able to buy Bolivar Corona Extras. They certainly could produce any of these deletions on an irregular basis - enough to sell to those who would buy them. But why if they don't have to..........

[Ken Gargett]

(and of course Ken…Happy Bday!)

thanks, but not my birthday. not even this month.

[JohnS]

At the end of the day, to Habanos S.A, it's a business and the fact remains that Montecristo, Romeo y Julieta and Jose L.Piedra account for around half of all year sales (yes, that's right, 50%!) and when you add H.Upmann, Hoyo de Monterrey, Cohiba and Partagas, that would account for another third (again, yes, believe it or not, 33% of all sales). So since the other 20 brands only account for less than 20%, the only people who miss out via deletions are cigar enthusiasts such as us who can actually appreciate, for example, a Ramon Allones Specially Selected 50 Cab and are willing to wait 3 to 5 years to start delving into it. Most of the cigar buying market is not like that (but I wish they were more so!).

[mk05]

Why make 10 cigars where 3 sell 75% and the rest make up the residual, when you can restructure, only produce 5 cigars where the 3 made up the original 75% and the other 2 carried the residual? Your supply chain can concentrate on production, and your customers can focus on the streamlined product offerings. Simply put, you waste less and make more. Doesn't that make a lot of business sense?

[Ken Gargett]

At the end of the day, to Habanos S.A, it's a business and the fact remains that Montecristo, Romeo y Julieta and Jose L.Piedra account for around half of all year sales (yes, that's right, 50%!) and when you add H.Upmann, Hoyo de Monterrey, Cohiba and Partagas, that would account for another third (again, yes, believe it or not, 33% of all sales). So since the other 20 brands only account for less than 20%, the only people who miss out via deletions are cigar enthusiasts such as us who can actually appreciate, for example, a Ramon Allones Specially Selected 50 Cab and are willing to wait 3 to 5 years to start delving into it. Most of the cigar buying market is not like that (but I wish they were more so!).

john, i keep hearing that this is a business (not just from you, of course), that they weed out non performers, that they are not in this to make everyone happy etc etc etc.

what happened to good old fashioned communism?

[jwr0201]

because the faceless men of habanos are cowboys-supporting, bleeding heart, nsw-following, teetotalling, redneck, sauv blanc drinking (yes, i know), selfie-taking, justin beiber fans who are as useless as chocolate teapots and white crayons and who must make their decisions on a highway because that is where accidents happen and who'll never be the men their mothers were.

but we do love them (and we know they'll take a holiday joke - rob told me to say all that).

'justin beiber fans' this alone explained it!

[JohnS]

john, i keep hearing that this is a business (not just from you, of course), that they weed out non performers, that they are not in this to make everyone happy etc etc etc.

what happened to good old fashioned communism?

I hear you Ken. I had a Diplomáticos No.4 last night, most complex marevas I've ever had in regard to flavour development through the thirds. HSA discontinued it in 2010 so no, I can't have this in my rotation. I'm left to enjoying Montecristo No.4's (or Cohiba Siglo II's or Por Larranaga Petit Coronas) as my regular 'go to' marevas cigars. What do I do when I'd like a mild cinnamon, nutmeg 'change of pace' cigar as noted in the Diplomáticos flavour profile? Settle for a piramide Diplomáticos No.2 and learn to accept the vitola size. When I want a complex marevas-sized cigar, no more opting for the Dip 4! What a pity!

[CdnLimitada]

As someone who got into this "hobby" in 2011, I am disappointed that I can't find a number of the classic cigars that seem to be lost legends. Love to try more Diplomaticos, RA 898, Cuban Davidoffs, LGC in a number of sizes and more.

I also wish I would have stocked up more on QdO Imperiales, Monte GE, QdO Superiores, Boli GM that others down the road will be saying the same thing about these IMO.

[Fumadoro]

As someone who got into this "hobby" in 2011, I am disappointed that I can't find a number of the classic cigars that seem to be lost legends. Love to try more Diplomaticos, RA 898, Cuban Davidoffs, LGC in a number of sizes and more.

I also wish I would have stocked up more on QdO Imperiales, Monte GE, QdO Superiores, Boli GM that others down the road will be saying the same thing about these IMO.

I only recently got serious about cigars again in 2013 after a brief hiatus and only starting at that time did I really begin to explore Cuban cigars. I must say I echo your sentiments. I never bought a box of Dip 4s, many of the LGC cigars outside of the Medaille d'Or series, the QdO Imperiales even. I also loath that I can't buy a Cuban Davidoff that isn't over 20 years old, that costs $5k per box, and may very well be past its prime.

It's a shame, but one day, just maybe the tide will come back in.

[Fugu]

thanks, but not my birthday. not even this month.

Sorry Ken, blindly trusting the blokes on the shout box.

Leastwise, a very happy New Year to you, and all the best!

P.

[Fugu]

john, i keep hearing that this is a business (not just from you, of course), that they weed out non performers, that they are not in this to make everyone happy etc etc etc.

what happened to good old fashioned communism?

That's the basic issue here. State-owned, state-directed. There is no competition between marcas, cannibalizing on themselves without major negative effect on overall returns for the company.

[Colt45]

what happened to good old fashioned communism?

It nationalized the Cuban cigar industry, and here we are