Cuban Cigar Industry Poll

[El Presidente]

This is the biggest question in the Cigar world today. Distributors are asking it, retailers are asking it, consumers are asking it. 

At the top of the piramide, HSA is playing the "nothing to see here" ..."everything is fantastic" card. 

Outside of the glass palace it is bedlam. Everyone can see it, feel it, smell it. 

Fascinating time isn't it 

Which of the following most closely aligns with your thoughts? 

[Pantone151]

The demand is there and there's enough aura and cachet associated with CCs that I have a hard time believing it all just goes by the wayside.  There's money to be made returning to higher capacity so long as quality doesn't suffer.

[El Presidente]

Just now, Pantone151 said:

The demand is there and there's enough aura and cachet associated with CCs that I have a hard time believing it all just goes by the wayside.  There's money to be made returning to higher capacity so long as quality doesn't suffer.

Under this regime? How do they get there? 

No money and short of food/medicine. Brain drain not slowing. Farmers not paid. Lowest planting in history. Infrastructure collapse. 

It may be revived under a different operator. Under this regime? Can't see it. 

HSA is marketing.  Tabacuba is production. HSA does a fine job with little to play with. They are marketing geniuses using "smoke and mirrors" but eyes need to be on Tabacuba. How derelict is that institution? 

[Pantone151]

Man if things are that bad it's time for the CIA to stage a revolution and install Hamlet as the new president to save our cigars

[NSXCIGAR]

If all the stars align there will be a slow recovery. Short to medium term, status quo. 

[Cabbie]

11 minutes ago, NSXCIGAR said:

If all the stars align there will be a slow recovery. Short to medium term, status quo. 

This can be the best possible outcome we can hope for.

[Rhinoww]

It’s depressing but it seems like A big win might be seeing some stock build up in three to five years. That assumes weather, planting, fuel and fertilizer cooperate and there are enough qualified rollers. That is unlikely to happen, unless demand drops off a cliff as well due to economic shifts or a massive shift in tastes. Again, doubtful but possible.  Best case is for a status quo. Soon enough a $50 Cuban stick may somehow seem everyday. It will never be everyday to me. 
I’m already looking at my stash and thinking about how I can stretch it into a lifetime supply if things don’t change. 
I just read an article about a foodie who bought a bottle of Rye that became worth close to 100k. He drank it because he loved it and it cost him $75. I wonder if that will be us smoking cigars in a few years. I have a few bottles of pappy that I paid next to nothing for that are worth 1k plus. Still have not cracked those seals, but perhaps they might pair well with a few of my espys or SW. 

And for the record, my vote was that things will collapse. 

[MPS]

pack it up it’s over, just a matter of time now.

[Chibearsv]

18 minutes ago, Rhinoww said:

I just read an article about a foodie who bought a bottle of Rye that became worth close to 100k. He drank it because he loved it and it cost him $75

This is how I feel about my stash. Never gonna sell since I paid a reasonable price and I enjoy them too much. 

[Islandboy]

I think in the case of their sugar industry, there was robust global competition involved, as well as higher processing costs. Seems to me we’re just at a certain point in a cycle with Cuban cigars, and if the powers that be have any brains at all, they’ll eventually figure their way back to higher production.

[SCgarman]

1 hour ago, Pantone151 said:

Man if things are that bad it's time for the CIA to stage a revolution and install Hamlet as the new president to save our cigars

He is busy saving us from Cuban cigarmageddon by offering us a great alternative. The Nudies line. As far as Cuba, Hamlet has been there done that. There are nothing but good things that came from him leaving there and making USA his new home.

[MickVanWinkle]

I’d have to assume the current trajectory (or worse) unless an underlying transformation takes place.  Overwhelming demand can prop it up and slow down the decline for only so long until that too colllapses.

[MossybackR]

12 minutes ago, Islandboy said:

in the case of their sugar industry, there was robust global competition involved, as well as higher processing costs. Seems to me we’re just at a certain point in a cycle with Cuban cigars, and if the powers that be have any brains at all, they’ll eventually figure their way back to higher production.

…falling sugar prices were also a factor in the sugar collapse — not what we’re seeing from HSA. They are using some effective “smoke and mirror” methods. Perhaps a spiral out of control, benefiting a few 😕

[DaBoot]

Definitely a failed state at this point. 

[Rhinoww]

28 minutes ago, Chibearsv said:

This is how I feel about my stash. Never gonna sell since I paid a reasonable price and I enjoy them too much. 

Here is a link to the article. https://www.foodandwine.com/lenells-red-hook-rye-7100939
 

[LizardGizmo]

I might be in the minority, but I believe that Tabacuba will improve production to pre-covid levels and beyond - it will just take a long time. La Corona alone is planning to improve its output from 5M to 8M annually by 2030 and I believe they can do it.

I don’t believe the HSA BS about the hurricane nor do I think there will be a tobacco shortage. I think it’s all marketing, placed in the regular rags to cause panic and justify price increases.

Will they have enough talent for rolling? Will they have enough quality tobacco? Those are icebergs, for sure, but hopefully they can avoid them. When I was in corona in March, the week after festival, there were 30 new students learning to roll, all at various stages in the 9 month torcedor course.

I really think there’s a serious effort happening in trying to take care of the torcedors and production people from leadership in the factories. Simple things, but they matter: housing, clothing, making sure they can feed their kids, etc. I think that speaks to the marked quality improvement we’ve seen over the last 3-4 years. I think it’s beyond being a good run of tobacco - I think they’re trying to do more. Happy people make good cigars, they say.

Talented and resourceful folks like Hamlet will always get out of there - but let’s not kid ourselves, he’s one of the greatest of all time.

Glass half-full, but I’m in an optimistic mood tonight.

[PigFish]

It has been long coming to this forum the recognition that HSA is really not he problem.

 I point this out as an age old market driven vs ignorant socialist driven philosophy on economics that rules the island state. How many time someone here has said… this is capitalism Ray… get used to it. Bullshit!

One cannot expect that those that are entrenched In failed economic theories to succeed in much of anything. Without the support of a more powerful communist state, one ahead of the eventual decline curve, they will all fail.

 It takes decades, but you cannot forever hide behind masks of propaganda.

Cuba is not the decline of the cigar industry. Cuba is a lesson on the failure of communism and what you get when you teach people that meritocracy is bad… dependence is good.

The relationship between the US and China may well heat up. I expect China to occupy Cuba as the Soviets once did. Cuba fails completely if this doesn’t happen. History repeats itself. My money has long been on this track. I’m positive it will happen. China is expanding all over the globe seeking resources and military advantage. Cuba is logical. The Chinese just want to buy it up at a receivership sale!

[BrightonCorgi]

They'll have to go back a normalized wholesale pricing model.   Skewing everything so retail pricing is the same across the globe does not work on a heavily taxed item (region specific) like cigars.  I see how they like to associate Habanos with luxury items like Hermes, B&O, Gucci, etc... but those items retail price is not effected by taxes. 

Cigar tourism be it Havana, Andorra, Beirut , etc...  is part of the allure IMO.  They had a good going.

The writing is on the wall.  Look at Duty Free's.  They use to be "one of the places" to buy Habanos globally.  Dufry is about ready to unplug their walk-in's.  Cigars aren't worth the hassle.  Crazy prices & lack of selection of Habanos now make them a pass for consumers walking by on a daily.  Where's all the Duty Free specific items promoted over the last decade?  I never see them.

[99call]

59 minutes ago, PigFish said:

It has been long coming to this forum the recognition that HSA is really not he problem.

 I point this out as an age old market driven vs ignorant socialist driven philosophy on economics that rules the island state. How many time someone here has said… this is capitalism Ray… get used to it. Bullshit!

One cannot expect that those that are entrenched In failed economic theories to succeed in much of anything. Without the support of a more powerful communist state, one ahead of the eventual decline curve, they will all fail.

 It takes decades, but you cannot forever hide behind masks of propaganda.

Cuba is not the decline of the cigar industry. Cuba is a lesson on the failure of communism and what you get when you teach people that meritocracy is bad… dependence is good.

The relationship between the US and China may well heat up. I expect China to occupy Cuba as the Soviets once did. Cuba fails completely if this doesn’t happen. History repeats itself. My money has long been on this track. I’m positive it will happen. China is expanding all over the globe seeking resources and military advantage. Cuba is logical. The Chinese just want to buy it up at a receivership sale!

Come on Ray,  just admit it, you've built a bunker and you just want to give it a go.  

 

 

[99call]

I do think China will somehow gain control of the cigar industry in Cuba, if not just to take ownership of a product that a great many of its people enjoy......why wouldn't you?.   

I have no idea what this will mean for the people or production,  levels of terrible human rights and poor pay will likely go unchanged, but efficiency and infrastructure will likely be invested in.

I do not however see the Chinese wanting to 'take' Cuba, as this would be a crazy escalation in tensions, also (despite the old school nature of the conflict taking place in Ukraine) I'm not convinced the nature of Chinese war machine would require a close staging post (as with the Cuban missile Crisis).        Lets be honest the two options are either, very little happening (war wise) or we are all toast 7 times over. 

[ha_banos]

They are struggling with too much it seems to be able to keep cigar production going in anything but a minimal production over the next few years I guess. Infrastructure, food, medicine, economics too many bigger issues.  

[BrightonCorgi]

34 minutes ago, 99call said:

I do think China will somehow gain control of the cigar industry in Cuba, if not just to take ownership of a product that a great many of its people enjoy......why wouldn't you?.   

I have no idea what this will mean for the people or production,  levels of terrible human rights and poor pay will likely go unchanged, but efficiency and infrastructure will likely be invested in.

I do not however see the Chinese wanting to 'take' Cuba, as this would be a crazy escalation in tensions, also (despite the old school nature of the conflict taking place in Ukraine) I'm not convinced the nature of Chinese war machine would require a close staging post (as with the Cuban missile Crisis).        Lets be honest the two options are either, very little happening (war wise) or we are all toast 7 times over. 

Hate to say it, but China controlling the Cuban cigar industry is probably the best thing for the Habanos at moment.  They know how to run an operation and are familiar with consistent products at any price point.  It's never good for the workers.

There's not much reason beyond flaring tensions and mega shipping ports to really infiltrate Cuba for the Chinese.

[SpecialK]

Voted for Option 1, I believe they will come back to the levels before... No mention of what the quality of the product will be... It's going to be rough in my opinion.. new rollers and 

getting these folks over the hump...

[MrBirdman]

1 hour ago, BrightonCorgi said:

Hate to say it, but China controlling the Cuban cigar industry is probably the best thing for the Habanos at moment. 

But they don’t control production - Tabacuba does. I don’t see Cuba selling a piece of that unless they’re completely out of options for keeping the jalopy going. 

We’re seeing a classic private equity pump, squeeze, and dump. Except that instead of screwing workers - who aren’t under their control and in any case who can’t be screwed any more than they already are - they’re screwing customers. I don’t think the current Chinese owners see this as a long term investment. 

[Greenhorn2]

Since the end of 2020, I have watched the Cuban cigar industry do an amazing swan dive off a really tall cliff. Whether they pull out of the dive or go splat is yet to be determined. But I feel unless some outsiders step in and pump large sums of money and leadership into the industry       ( that's if the Cuban leadership would even allow this to happen) then the ground is coming up fast on that cliff dive.