El Presidente Posted January 25, 2006 Posted January 25, 2006 3. If relations between Cuba and the U.S. were normalized, how would the Cuban cigar industry deal with the probable increase in demand in the U.S, while maintaining, or increasing quality worldwide? This is always a topic of discussion industry wide. Realistically, the earliest we are looking at this is 4 years away (2010). Marketing strategy by Altadis will be to position Habanos at the top eschelon of product...Rolls Royce. They will never meet demand so they will charge top dollar. Parralel importing will be controlled to the extent that they will own 50% or thereabouts of all worldwide distributors (process happening now) The distributors in return will have Guaranteed stock numbers. 5: 1 Demand Supply equation. Premium Positioning. Premium Pricing = maximum profit. End game would be the purchase of Cubatobacco and Pinar Del Rio/Vuelta Abajo plantations. You would then see almost complete vertical integration from plantation to distribution. Just my thoughts mind you :-)
Colt45 Posted January 25, 2006 Posted January 25, 2006 Rob, thanks for answering everybody's questions. Great info. My understanding has been that Altadis decided to make Cuban cigars a high end luxury item a few years back. That they could control the whole thing from start to finish is almost mind boggling - but I guess it's not much different than any other business. It almost seems like what was done with armies during colonial times, is now being done with money. Thanks agin!
1f1fan Posted January 25, 2006 Posted January 25, 2006 I am not taking any chances on what might happen....I'm stocking up now for the long haul. :-D
Loki Posted January 25, 2006 Posted January 25, 2006 » I am not taking any chances on what might happen....I'm stocking up now for » the long haul. :-D Without a doubt, I've often thought about the day that the embargo drops. Liberty for the Cuban people sorrow for the Habanos smoker.
El Presidente Posted January 25, 2006 Author Posted January 25, 2006 » I wonder what an LCDH franchise costs.:-| You need $1000,000 to fit one out. There is a minimum floor area which is a killer.
Wiley Posted January 25, 2006 Posted January 25, 2006 How did they meet demand before the embargo? I mean, cigar smoking was substantially more popular at one time. Could they plant more crops and go back to exporting the tobacco to be rolled elsewhere? I can't remember what the cigars rolled in the US with Cuban tobacco used to be called.
Colt45 Posted January 25, 2006 Posted January 25, 2006 » I can't remember what the cigars rolled in the US with » Cuban tobacco used to be called. Clear Havanas
El Presidente Posted January 25, 2006 Author Posted January 25, 2006 Cigarillo's and the like (Clubs/Demi Tasse) were the mass market cigars of the time. Premium production numbers today would certainly exceed pre-embargo numers. I will try and get the numbers as a comparison...just hard to seperate Premium cigars numbers from total numbers when it comes to that period.
billyburg Posted January 25, 2006 Posted January 25, 2006 » » » 5: 1 Demand Supply equation. Premium Positioning. Premium Pricing = » maximum profit. » » It seems to be the general concensus of a big price increase but how much? 20%-50%. If so won't they loose alot of the current market. I guess they'll bank on crazy americans buying 70% of the total production at price.
El Presidente Posted January 25, 2006 Author Posted January 25, 2006 End pricing is total conjecture at this point. One thing is for certain. For their premium range they could increase prices 25% and still have demand 5 to 1. While the net is price sensitive the rest of the world (walk in stores) are not. Clientelle are well heeled and discerning but not overly price conscious when it comes to top end Habanos. If they could achieve Padron standard construction they could position their product as Rolls Royce, Krug, Patek. They have a long way to go to reach Padron construction consistency. Still 5 years away at the earliest.
genevapics Posted January 25, 2006 Posted January 25, 2006 If a lifting of the the embargo would drive prices higher, then I am all for the embargo. While I would love to be able to purchase cuban cigars legally, I really do not want to see that large (or larger) of a price increase. And let's face it, if it does once again become legal to buy cuban cigars, the demand in this country would skyrocket! As long as there are reputable dealers such as El Presidente, then things will be good for those of us in the states. Don't get me wrong, I would love to be able to travel to Cuba legally and enjoy the beauty of the island. But man, I just don't need to see price hikes because of incredible demand. Along with the price hikes, there would also be shortages of the raw goods necessary to produce the cigars. This would in turn lead to subpar cigars and very angry smokers. Would it be wrong to suggest that conditions would resemble those that we experinced during the Cigar Boom... only worse? For now, I am all for the embargo... for selfish reasons.:-D One other result of a lifting of the embargo... I would assume that many americanos would buy from their local Casa de Habanos... instead of from our fearless leader. Not a good thing!:crying:
billyburg Posted January 26, 2006 Posted January 26, 2006 »» » For now, I am all for the embargo... for selfish reasons.:-D » » Ditto!!:
Mel Posted January 26, 2006 Posted January 26, 2006 Nor Price sensitive? They must not smoke as many as I do there Senor Prez. Genevapic I hate to say I feel similar. I just wish I had the balls you got to prostrate yourself on the web like that. You selfish bastard;-) Maybe we could spread some dirt on Fidel and keep this thing going? I do hate to see good people on the island suffer on his(or however)acount.
jaxstraww Posted February 3, 2006 Posted February 3, 2006 My question after the embargo is where the B&M's find room for the new influx of habanos. At least in the States I have never been to a B&M that had ooodles of room. They have boxes stashed on the floor, under racks and anywhere else they can keep the boxes humidified. Now you have a whole new monster to bring in. You need to cut bait somewhere. Do the CAO's and Torano find themselves out because the PAM's, Opus and Habanos take the shelves? Do you put a box of Domincan MC #2 next to a box of the real deal. The domincans are already $8-10 in most stores. How can you justify that if the Habano version is $12. I say the Dominican would almost have to drop to about $5-6 for anyone to even look at it when i came to decision time. What abou fakes? Every nickel and dime internet retailer (most are legit but you know of these quick tobacco house sites) will be selling authentic Cubans. Yeah right. There will be som many noobs smoking at that point ere in the States it'll be easy to move **** product and they won't be the wiser. It'll be a mess for years. Like it was said above I hope the cuban people get the benefeits of the embargo lifting but I hope a Davidoff type retailer program goes into effect on Habanos.If you want to sell them you have to be a licensed Habano dealer say. ATF should earn their money and crack down on counterfeits too.
The Privateer Posted February 3, 2006 Posted February 3, 2006 » » Like it was said above I hope the cuban people get the benefeits of the » embargo lifting but I hope a Davidoff type retailer program goes into » effect on Habanos.If you want to sell them you have to be a licensed » Habano dealer say. ATF should earn their money and crack down on » counterfeits too. With a giant like Altadis controlling much of the marketing, I'm sure there will be proper control over the distribution and sale of product.
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