Recommended Posts

Posted

I was looking last night through the list of new releases at the upcoming PCA in Vegas. Wow 😲

It appears (and there are exceptions) that the more established you are, the fewer new releases you require. 

It is an immensely crowded field in the NC world but that doesn't stop another busload of cigar releases. Green Hornet anyone? :D

A couple of questions come to mind. 

1. Do the majority of cigar brands follow the Pareto Principle?  Let's say 80% of sales come from 20% of thier products? 

2. Would this apply to Habanos? 

3. If you are not an "A " or God forbid a "B/C" class celebrity cigar brand, is the only way to climb that hill to relevance (and one suspects profitability) to nail a 92+ point review in CA?  Do you just keep putting product forward until one hits? 

 

You don't have to answer all. You don't even need to have a definitive answer. 

What are the dynamics that frame the NC cigar industry? 

 

Black Works Studio Green Hornet (5x48)

 

  • Like 1
Posted

1. Do the majority of cigar brands follow the Pareto Principle?  Let's say 80% of sales come from 20% of thier products? 

For large brands, absolutely.  For boutique or smaller brands it depends on how they're decided to manage their portfolio.  For some like Steve Saka at DT&T, his new releases are what brings smokers into his core releases.  I'd say that's a strategy that Black Label Trading Co. has tried to employed but in a way they've created a bit of a monster with all the people clamoring over their Black Works Studio limiteds.

2. Would this apply to Habanos? 

Unsure.

3. If you are not an "A " or God forbid a "B/C" class celebrity cigar brand, is the only way to climb that hill to relevance (and one suspects profitability) to nail a 92+ point review in CA?  Do you just keep putting product forward until one hits? 

Celebrity brands have a history of failure.  It's very rare that a celebrity brand has had any success really beyond the initial year. I'd say Espinosa's brand launch with Guy Fieri is a significant outlier (in the positive).

As far as CA goes; that's a whole other discussion that could take up multiple pages.  Suffice it to say, in cigar media we're very well aware when a brand starts to 'court' Cigar Aficionado in hopes they'll do well on the end of year list.

  • Like 1
  • Thanks 2
Posted
7 minutes ago, Cigar Surgeon said:

 

3. If you are not an "A " or God forbid a "B/C" class celebrity cigar brand, is the only way to climb that hill to relevance (and one suspects profitability) to nail a 92+ point review in CA?  Do you just keep putting product forward until one hits? 

Celebrity brands have a history of failure. 

Poor choice of framing by myself. 

By "celebrity" I was drawing a line between cigar brand standing and Hollywood A/B/C class celebrities.   

eg:    Padron/Fuente/Davidoff   etal =     A Class. 

         Casa Don Pablo Montoya etal =    D Class. 

Let's say Casa Don makes good to very good Nic cigars. How in hell does he get recognised and climb the hill in such a crowded market? 

  • Thanks 1
Posted
7 minutes ago, El Presidente said:

Let's say Casa Don makes good to very good Nic cigars. How in hell does he get recognised and climb the hill in such a crowded market? 

Challenging.  Very challenging.

We were just discussing leading into the PCA that it's always been difficult for smaller brands to get shelf space and be recognized as a brand.  That's become more difficult with the price point shift where we see new entrants coming in at a $15 minimum.  

I remember having a conversation with a fairly successful retailer at the TPE and I mentioned RoMa Craft and he had never heard of the brand.  They've been around 10 years, have their own factory, and produce enough cigars to be moving towards the small to medium category. 

I think the only way a new brand has a chance is be prepared to hand sell at events across the US and be prepared for it to take years. 

  • Like 2
Posted

Green Hornet has been around for quite some time and is a fantastic smoke!  Black Works Studio makes some really great stuff.  They are certainly in the small-medium category and they do have their market.  They will never be Fuente or Padron but then again I'm not sure that they want to be

  • Like 1
Posted
13 minutes ago, Silverstix said:

Green Hornet has been around for quite some time and is a fantastic smoke!  Black Works Studio makes some really great stuff.  They are certainly in the small-medium category and they do have their market.  They will never be Fuente or Padron but then again I'm not sure that they want to be

Indeed I read they are releasing another vitola/line at the upcoming show. 

I chose them (BWS) to showcase marketing strategies. 

  • Like 1
Posted

Look at Viaje…. They create new releases all the time, and they mostly are bad.  So they are just throwing stuff at the wall.  That’s their strategy. I have no idea how they survive or maybe my palate doesn’t understand their product. Maybe they got started in boutique world early on and just hung on? 

Steve Saka cares, has a name from his former post/job, and creates decent/very good quality albeit at a price. But he clearly rode on his name and delivered with decent/good quality product. 

There’s a NH smoke shop near me that is notoriously difficult to get shelf space but if your product is good he will sell it, unless he hates you. He sells tons of house product too which is decent quality and low cost….he was smart to vertically integrate with care. 
 

The NASA guy (Omar),  Fratello Cigars, makes a lot of releases and I think he did it through shoe leather. I don’t really like his stuff but it’s smokable. He did it with pure hard work. Maybe I don’t understand his stuff either. 
 

Romacraft makes great cigars. I think they did it through quality product. 
 

Seems like a few ways to get going, but you need money and/or access to quality product/blenders.  In the end quality should prevail…though there are brands out there that seem to keep going that I do not understand. 
 

I think Romacraft/Southern Draw/Foundation/Crowned Heads are good examples because I don’t think they had a ton of money but they constantly make (or made…haven’t bought in a while) really good stuff. And I think they had to grass root it by working the trade shows and the important retailers. 

  • Like 1
  • Thanks 1
Posted

I met Patrick J. Martin at a birthday party. He learned his trade at the old Zino Davidoff and he is a gifted salesman. He has the talent to sell everything.

Patrick has a cigar factory in the Dom. Rep. and produces the Patoro brand (Patrick's gold). He has done door-to-doors, gone to cigar shops and scrubbed there. That went well for a few years, growth was very good but not big enough. For him and his brand, the solution was to find a distribution channel for his cigars. There are independent companies that do that. They have their distribution channels, stock restaurants, hotels, lounges and cigar retailers. This is a catalyst to move from the Z producer to the A league. So here in Europe, as it is in the US, I have no plan and certainly no story to tell.

  • Like 1
Posted
20 hours ago, El Presidente said:

3. If you are not an "A " or God forbid a "B/C" class celebrity cigar brand, is the only way to climb that hill to relevance (and one suspects profitability) to nail a 92+ point review in CA?  Do you just keep putting product forward until one hits?

I comes down to ad spend in said publications.  Like getting an "A" in a private school.  Very easy.

Posted
3 minutes ago, BrightonCorgi said:

I comes down to ad spend in said publications.  Like getting an "A" in a private school.  Very easy.

I think you meant getting onto the rowing team at USC.   🤣

Posted
1 hour ago, BrightonCorgi said:

I comes down to ad spend in said publications.  Like getting an "A" in a private school.  Very easy.

I think it comes down to the fact that exclusivity in the NC world is difficult to quantify, and in many cases need be artificially manufactured. 

  • Like 1
Posted

Showing up on the CA end of year list isn't just down to revenue spend.  If you haven't listened to episodes of Cigar Coops CA Top 25 Pre-Game shows I'd highly recommend it.  I think the formula has been explained on multiple occasions and it boils down to a certain number of slots being 'reserved' for certain brands.  Outside of those slots anyone can be a contender provided they have not shown up on the list in the past.

https://cigar-coop.com/2022/01/prime-time-special-edition-113-the-unofficial-ca-top-25-pre-game-show-2021.html

https://cigar-coop.com/2021/01/prime-time-special-edition-91-the-unofficial-ca-top-25-pre-game-show-2020.html

 

Posted

I know rob has previously said that US cigar smokers want consistency. While I do think this is true, I think they also have a strong touch of vanity to them which makes them want “the newest and greatest”. I think if you’re in the US market you need to release new stuff purely to get new stuff to the market. I don’t think a Diplomaticos ( one cigar brand) or even a Bolivar (4 cigar brand) would survive in any way shape or form in the us market. 

Also on the other hand. How else do you spread your name in the cigar industry? It’s not like you’re innnovating anything. You make a cigar and it’s locked in. You don’t change the blend afterwards or the packaging generally. Even if it’s the best cigar ever. You get one review maybe two or three upon release and that’s it, reviewers move on. They don’t come back and revisit. So really the only way to get your name in the headlines is with a new cigar. 

  • Like 1
Posted
On 6/29/2023 at 11:01 AM, dominattorney said:

 

If I read appropriately between the lines, @El Presidente, do i detect a bit of a desire to blow up the Nudies brand? I think you have a unique opportunity to do so if that is the plan, but if i were you I'd capitalize on the unique position you're in from the start. You already have a sales platform that is pretty robust, so no need to hawk product through reps to brick and mortar shops to make space on shelves. You're selling to people who have loved a product that has recently betrayed them. You're selling cigars, sure, but more so you're selling a soothing balm on a significant emotional injury that consumers of CCs have been dealt.

I actually in real life felt relief when I lit up a Nudies N6 and realized it was a great stick, but more than that a substitute for large format cuban cigars. 

 

Not at all. I am blessed with many advantages not immediately available to someone starting up a new brand.  It is not lost on me.

Nudies/Desnudo and MOFOH will always be boutique in scale.  I like boutique. Controllable. Immense fun. Nudies/Desnudo MOFO are my DNA to FOH. My thankyou.

However that leaves the door open for a full sized brand. That is a different sandpit. We are well advanced but dues have to be paid. 

It is seldom dull in my world ;)

 

 

  • Like 2
Posted
15 hours ago, Cigar Surgeon said:

Showing up on the CA end of year list isn't just down to revenue spend.

What percent of NC's on their list did not spend any advertising money on CA? 

Posted
3 hours ago, BrightonCorgi said:

What percent of NC's on their list did not spend any advertising money on CA? 

As much as I love to bash on CA (and it's sister WS) they do seem to be 'fair' over all with regards to having a couple of very good non-advertised industry/consumer darlings every year in the top 10, as @Cigar Surgeon pointed out. Does that mean that money didn't change hands somewhere? Tough to prove a negative. I personally feel that both lists are 100% for sale to the highest bidder, but I'm by nature a cynic.

As to what drives new releases, to me, there are 2 major factors: premiumization and demographics. Cigars have a low production cost, but have scalable value to the consumer; consumers can be broken into groups roughly divided as casual, habitual, and collector, all groups further graded by individual economic factors. 

New releases are an easy, effective way to drive consumer interest into a certain brand. LTOs and scarcity drive wholesale order builds in today's buying environment. Saka, Drew Estate, Fuente all have very strongly structured outlines for what it takes to get their 'top' cigars. LFD, Padron, Viaje and a bunch of the 'cool kid' brands have a more vicious way for getting the same effect. You have to buy a fair amount of skim to get the cream.

I -love- these questions, but I'm an industry mercenary and nothing concrete is free.

Here's a rough outline:

#1. Yes, with certainty, but only when you see the big picture of the entire market for the output of a manufacturer, not necessarily a brand. See Bourbon, Scotch

#2. Yes, we've already seen evidence of this with sku discontinuation over the last 20 years. Habanos is more than likely trying to pivot into making enough of the 20% that provides 80% of sales while aggressively taking premiumization to the nth and dealing with manufacturing shortfalls. As anecdotally the average casual smoker worldwide believes a Cuban cigar is the finest smokable luxury available in the world, they can pivot into where they want to be even if they lose a 'significant' portion of the middle of their established market. They only need to hold the top 'collectors' and enough of the 'casual' to have enough demographic to keep buying in mass to remain relevant.  See Champagne, Bordeaux, Napa.

#3 stop selling products and start selling branding and a luxury experience. See Vodka & watches.

Let me know where to send the invoice and how long & boring of a PowerPoint you'd like. My rates are cripplingly high and unfortunately fair.

On 6/28/2023 at 3:34 PM, Cigar Surgeon said:

the only way a new brand has a chance is be prepared to hand sell at events across the US and be prepared for it to take years. 

I didn't have the finger dexterity to keep the 'I think' qualifier on your quote CS, but I'd retort that imho the best way to build a brand from a solid foundation is to cut the end transaction maker into the action, ie build a buying program that allows leveraged margin buying specifically for a retailer to make high quality product depletions commissionable. I'd say that most people buy the brands they know before they touch the doorknob or whatever the sales associate recommends with confidence and product knowledge. Volume drives the boat, so you may as well 'hire' every store associate you can to help the retailer deplete large orders faster and more effectively. Discounting into these arrangements is almost always a better & cleaner line item than spending free goods and C-level time at events, as much as consumers love them.

Posted
49 minutes ago, Çnote said:

I personally feel that both lists are 100% for sale to the highest bidder, but I'm by nature a cynic.

I too am skeptical about totally blind reviews and all that.  Money talks and magazines are a dying industry.  Would I promote an awful cigar to the top 20 or 50?  How stuffed was that envelope of money? 

In all seriousness, there is a line where long term reputation vs. easy money cross each other.  Delicate balance.

Posted
1 hour ago, BrightonCorgi said:

I too am skeptical about totally blind reviews and all that.  Money talks and magazines are a dying industry.  Would I promote an awful cigar to the top 20 or 50?  How stuffed was that envelope of money? 

In all seriousness, there is a line where long term reputation vs. easy money cross each other.  Delicate balance.

Third hand and 15 years ago I was told about blue chips wineries that would submit 500-800% of the required samples for tasting at WS in order to ensure that 'everyone would have enough to sample,' in the same vein as British critics and buyers would pop the trunk when parking at Classe BX Chateau back in the day (and still now I'm sure, small towns don't change much). Just saying there's lots of ways to stuff an envelope.

Posted
7 minutes ago, Çnote said:

Third hand and 15 years ago I was told about blue chips wineries that would submit 500-800% of the required samples for tasting at WS in order to ensure that 'everyone would have enough to sample,' in the same vein as British critics and buyers would pop the trunk when parking at Classe BX Chateau back in the day (and still now I'm sure, small towns don't change much). Just saying there's lots of ways to stuff an envelope.

I've heard those same stories.  I don't think it's as prevalent today for the British critics since spawn of the internet.  New good wines from Europe with enough to distribute are found.

In the States I can see it still the case.  It costs more to open and run a winery and shelf space for domestic wines is a battle.  Wineries have to sell on much higher margin to make ends meet.  They need more "marketing" budgets. 

Posted
On 6/30/2023 at 4:49 AM, BrightonCorgi said:

What percent of NC's on their list did not spend any advertising money on CA? 

I'd have to watch the shows again to get the breakdown but it's something like 5 or 6 slots typically go to brands that don't have advertising with CA.  But it's a bit of an post hoc ergo propter hoc situation because most brands advertise with CA because it moves the dial at retail. A number one rating in the magazine is a game changer for a brand. 

On 6/30/2023 at 8:57 AM, Çnote said:

I didn't have the finger dexterity to keep the 'I think' qualifier on your quote CS, but I'd retort that imho the best way to build a brand from a solid foundation is to cut the end transaction maker into the action, ie build a buying program that allows leveraged margin buying specifically for a retailer to make high quality product depletions commissionable. I'd say that most people buy the brands they know before they touch the doorknob or whatever the sales associate recommends with confidence and product knowledge. Volume drives the boat, so you may as well 'hire' every store associate you can to help the retailer deplete large orders faster and more effectively. Discounting into these arrangements is almost always a better & cleaner line item than spending free goods and C-level time at events, as much as consumers love them.

I think your ideas are sound, the gap here is that unfortunately most B&M owners are bad at running their business. The ones that are good at running their business understand the short half life of a lot of new brands and are extremely unlikely to take on the risk until they've been around for a few years. That's been my experience chatting with owners over the years at any rate.

  • Thanks 1
Posted

     *There's an old African saying: A good thing sells itself. A bad thing wants advertising.  And as another one of our late great comedians had observed (in light of the way commercials pretty much hammer themselves down our throat a million times a minute, over and over and OVER again and again and again): Anything good you don't have to force on people: they will steal it.

  • Like 2
Posted

So my hand rolled cigars made with tobacco stolen off the side of the road field in SC will NOT get me invited? Damn.

  • Haha 1
Posted
22 hours ago, Cigar Surgeon said:

the gap here is that unfortunately most B&M owners are bad at running their business. The ones that are good at running their business understand the short half life of a lot of new brands and are extremely unlikely to take on the risk until they've been around for a few years. That's been my experience chatting with owners over the years at any rate.

Lots of uncomfortable truth there.

  • Like 1

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
  • Recently Browsing   0 members

    • No registered users viewing this page.

Community Software by Invision Power Services, Inc.