Cigar Jenga

[El Presidente]

Cigar Inflation continues to impact global markets. Now, we all know CC inflation is well and truly leading the pack, but I would estimate NC price inflation at around 8% over the past year. There are various reasons for this, but it is undeniable that input costs of NC cigars are rising fast with increased wages (10% this year in Honduras) and a shortage of wrapper that have seen prices for quality wrapper rising approximately 35% over a 12 month period.  Agriculture is fighting battles on a few fronts (social/political/economic/climate)  and it isn’t just tobacco. This is all occurring on a backdrop of continued high global demand which fascinates me given how many luxury industries have seen their bottom lines hit hard. French firm Rémy Cointreau saw sales fall by 23.5% in its third-quarter results for 2023/2024.

I expected the global cigar market to “pop” last year, but it is proving bloody resilient in Asia, the Middle East, UK and USA. Anecdotal evidence points to the China market softening, but hard data is difficult to pin down. Gut feel is that the China market is indeed softening at the high end while mid-level and entry product continue to do well. It isn’t a “given” however. NC brands that put the work in are generally being rewarded with decent penetration. Some are growing exponentially. Other well know global brands are simply burning rubber in the region and going nowhere.

Do we have the ingredients for a correction?…….or is there still too much global money happy to provide a home in mid to high end cigars?.  Your guess is as good as mine, but the limits are being pushed in this global game of cigar Jenga. 😉

 

 

[Li Bai]

All I can say is that it can't really get worse here in France, Cuban cigars wise. Every Monday in the morning I call the biggest and most renowned shops in Paris and the last two weeks they hardly received anything, except Quinteros and RyJ tubos.

One year ago I told to myself it couldn't get any worse but man was I wrong 😩

[anacostiakat]

I have been periodically checking vendors for cigars that my wife likes. Stock is non-existent or extremely limited. I mean, even Jose Pedras cigars are in short supply. Heh.

[wjs]

As a wine guy, I watched the market finally hit its ceiling. Thousands & thousands of dollars for rare Burgundies, champagne houses with millions of bottles in production tripling price in the past 5-6 years. Relative to wine, cigars have seen similar % increases but the QPR puts cigars in the value category with lots of room to run. I’d loved to have loaded up 10 years ago, but I’m grabbing what I can now because they (CC’s) aren’t likely to ever be this cheap again.

[Li Bai]

6 minutes ago, wjs said:

As a wine guy, I watched the market finally hit its ceiling. Thousands & thousands of dollars for rare Burgundies, champagne houses with millions of bottles in production tripling price in the past 5-6 years. Relative to wine, cigars have seen similar % increases but the QPR puts cigars in the value category with lots of room to run. I’d loved to have loaded up 10 years ago, but I’m grabbing what I can now because they (CC’s) aren’t likely to ever be this cheap again.

I hope you're wrong but this seems very likely to happen 🥲

[EasternPromises]

17 hours ago, Li Bai said:

All I can say is that it can't really get worse here in France, Cuban cigars wise. Every Monday in the morning I call the biggest and most renowned shops in Paris and the last two weeks they hardly received anything, except Quinteros and RyJ tubos.

One year ago I told to myself it couldn't get any worse but man was I wrong 😩

That’s interesting. The situation here in Singapore seems quite different. I was at a fairly well-known B&M store over the weekend and their shelves were filled to bursting - boxes upon boxes of Upmann Connies and Royal Robusto, HDM Epi 2 and Epi De Luxe, RASS, RA Superiores, QdO 50 and 54, RyJ Churchills, SLR Regios, etc. A few boxes of RE and LEs - RA no 2, Monte Supremos, etc. They even had a few singles of Siglo VI for sale and apparently a few weeks back they had received a few boxes of Esplendidos. 

Bear in mind, tobacco tax in Singapore is onerous and cigar prices are basically in the same ballpark as other heavily taxed countries like Australia and Canada. Though you could argue that could be a reason why they still have so much inventory on the shelves…but talking to the sale staff, they are still extremely busy and have customers coming in and buying boxes hand-over-fist (seemingly a mixture of locals and mainland Chinese tourists). 

[Shakey]

9 hours ago, wjs said:

As a wine guy, I watched the market finally hit its ceiling. Thousands & thousands of dollars for rare Burgundies, champagne houses with millions of bottles in production tripling price in the past 5-6 years. Relative to wine, cigars have seen similar % increases but the QPR puts cigars in the value category with lots of room to run. I’d loved to have loaded up 10 years ago, but I’m grabbing what I can now because they (CC’s) aren’t likely to ever be this cheap again.

Looking across cars, watches, wine, and leather goods/fashion I see the same pattern: there are a group of "premium" brands that are struggling but inside that group there is a much smaller group of "super premium" brands that are doing very well. On the buying side there's a small group of ultra-wealthy people who will spend effectively unlimited money to differentiate themselves from the merely rich, and on the selling side all of the premium brands are raising prices to be one of the anointed retailers. It's unfortunate for the enthusiasts like us who enjoy cigars (or cars, watches, etc) for the thing itself and not the implied wealth that it signifies. 

[Marco_011t556]

17 hours ago, Li Bai said:

All I can say is that it can't really get worse here in France, Cuban cigars wise. Every Monday in the morning I call the biggest and most renowned shops in Paris and the last two weeks they hardly received anything, except Quinteros and RyJ tubos.

One year ago I told to myself it couldn't get any worse but man was I wrong 😩

Sad for this.Can't imagine where the product goes.

3 hours ago, EasternPromises said:

That’s interesting. The situation here in Singapore seems quite different. I was at a fairly well-known B&M store over the weekend and their shelves were filled to bursting - boxes upon boxes of Upmann Connies and Royal Robusto, HDM Epi 2 and Epi De Luxe, RASS, RA Superiores, QdO 50 and 54, RyJ Churchills, SLR Regios, etc. A few boxes of RE and LEs - RA no 2, Monte Supremos, etc. They even had a few singles of Siglo VI for sale and apparently a few weeks back they had received a few boxes of Esplendidos. 

Bear in mind, tobacco tax in Singapore is onerous and cigar prices are basically in the same ballpark as other heavily taxed countries like Australia and Canada. Though you could argue that could be a reason why they still have so much inventory on the shelves…but talking to the sale staff, they are still extremely busy and have customers coming in and buying boxes hand-over-fist (seemingly a mixture of locals and mainland Chinese tourists). 

This crypto people and rich immigrants.

[Partyshrts]

The only bright side right now is you can still buy a box of Petit Coronas from a good Habano Marca for $10 a stick but once that hits $13 or more I will be buying Padron 1964 Principes.

[Engenheiro]

On 5/27/2024 at 5:16 AM, El Presidente said:

... It isn’t a “given” however. NC brands that put the work in are generally being rewarded with decent penetration. Some are growing exponentially ...

Do we have the ingredients for a correction?…….or is there still too much global money happy to provide a home in mid to high end cigars?.  Your guess is as good as mine, but the limits are being pushed in this global game of cigar Jenga. 😉

I sure hope so!

I would love nothing more than to see NC brands exponentially explode in popularity worldwide! Competition is healthy for any industry -- and it leads to great things for consumers, such as lower prices and better quality all-around.

As the saying goes, "A rising tide raises all ships" 🙂

[Monterey]

I looked into this and am calling b.s.

I went to my order history of my Non-Cuban site and looked at what I paid for cigars going back to 2016-2019. Dates are dependent on when I found my oldest purchase date. I then took those prices and today's prices and put them into an inflation calculator. Here is what I found. After adjusting for inflation:

• Olivia is the exact same price from 2016 to 2024
• Ashton is the exact same price from 2016 to 2024
• Fuente is up a net 3% from 2017 to 2024.  So increase .4% a year over inflation
• Caldwell is DOWN 12% from 2019 to 2024
• Padron is DOWN 4% from 2016 to 2024
• Illusione is DOWN 8% from 2019 to 2024.

So there is ZERO cigar inflation, at least to what I buy, beyond standard inflation. So to say "undeniable fact" to Non-Cuban "cigar inflation", I say, no