New World cigar price increases

[Cigar Surgeon]

Developing Palates just wrapped up our 2025 review season and one of the things I look forward to the most is our "By The Numbers" editorial that breaks everything down.

Part of it is a thumb in the nose of people who snipe from the sidelines, but a big part of it is a reflection on where the industry is headed.

This seemed relevant this morning as Charlie types up his tenth or so price increase article that I've seen roll out this week over at halfwheel.

Average Review Cigar Price: $17.31

Now this isn't a perfect capture of the cigar market.  For starters there's a significant selection bias in terms of what we're reviewing.  But it is a decent sample size, as we review roughly 20% - 25% of the new releases for the year.  And I would also hypothesize that this is a good reflection of the cigars that people who read and follow cigar content tend to purchase.

More than a $3 average price increase in 3 years.  Nearly a $6 average price increase in 5 years.

[El Presidente]

2 hours ago, Cigar Surgeon said:

More than a $3 average price increase in 3 years.  Nearly a $6 average price increase in 5 years.

What do members believe are the core drivers? 

 

 

[StoagieSnape]

Inflationary adjustments: affects overall production line (labor costs, supplies, equipment etc)

Tariffs

Increased demand: good thing

Price positioning:  a strategy to be seen as and compete with other premium brands. 

[alloy]

Greed!

[El Presidente]

Wage costs across the board have increased 12% over the past two years alone in Honduras. Leaf cost increases have varied but wrapper in particular within the NC industry is up some 20% over the past three years. 18% Tariffs Nicaragua, 10% on the other main countries in the cigar game. 

Throw in a change in mindset by brand owners to test the premium end of the market.  Not everyone can or wants to throw out a $100 NC cigar, but plenty are happy to try a $30 premium that wouldn't have crossed their mind 5 years ago. Most have pulled it off relatively successfully. 

Since 2000, from hamburgers to utilities, the consumer has experienced a period of upwards price adjustment in terms of mindset. Some cigar manufacturers have pushed the edge of this wave. 

At the same time, B&M store owners have also been hit with significant fixed cost increases outside of cigars. They have largely passed them on. 

I believe most price increases this year (2026) for NC will be around 5%. 

 

[Cigar Surgeon]

I also don't think you can count out the number of small'ish brands who are doing well in the market.  The challenge with being successful at that level is that you're good enough to pay the bills, but not good enough to own a factory.

If you don't own a factory, you're at the compounded costs of material, labour and factory overhead.

[El Presidente]

A common misconception is that a 10% cost increase can be offset by a 10% price increase. That only works if margins are ignored. If a manufacturer works to a fixed 30% margin, the price has to be reset so that the margin still exists on the higher cost base. Otherwise, margin erosion is immediate.

Of course the retailer also has to use the same mindset. Otherwise he will be calling in a liquidator.