Jerk in the Box marketing!

[PigFish]

I was reading a post of Robs in the Sancho Panza thread and it caused me to expand that thought into a subject I have been meaning to post on for sometime now.

When did H SA stop being a cigar company and start being a cigar box company?

I have nothing against new tubos or different packaging but that is not where the money and the efforts belong. Again... These are signs of a traditional company lost in a sea of misdirection looking to follow instead of lead. Rob had posted something to the effect of the SP line needing a visual make over. Prior to that my comments were that I did not smoke the cigar because I was unimpressed with the taste. Where do you fit?

Are you guys really interested in lousy cigars in nice packaging? Is that where you want Habanos to go? Not me kids! You could loose the boxes altogether and concentrate on the tobacco, the blends and the construction. I don't invest heavily in cigar boxes!

So much today is in how it looks. Granted I enjoy the classy cigar aesthetics. I own a few Siglo 6 tubos, I do think the presentation is classy. But don't cheat me on the cigar for the sake of a fancy tampon holder!!!

I see these Hollywood types take a H-1 Hummer, put huge rims on it, 20 series tires and lower it! This is what H SA is doing to their cigar heritage; taking the best the world has to offer in cigars, in analogy with the H-1 being a capable off road vehicle, pulling its teeth by trying to make it something fashionable. This isn't the 90's H SA. Cigar use is frowned upon! It is the "**** political correctness crowd" that is buying your cigars today, not the fashion models of the 90's.

Enjoy your Habanos anyway you see fit; smoke one in your lowered Hummer if it does not fog the video screens for you kiddies, but don't deny those who enjoy it for the kick in the teeth, either with a strong beverage or after a robust meal. Some of us like the way they taste; robust in constitution, complex in taste and tantalizing in character. Some of us... the ones that buy the bulk of your cigars, want them strong, want them in a variety of shapes and sizes and want to be able to smoke them affordably.

Don't put street tires on my Hummer! I don't mind a few scratches and some mud in the rims. Lets get it dirty... get it stuck and smoke a real cigar as we winch it out! We might even want to do a little shooting while we are out there! -Piggy

[sounddust]

Piggy, IMO it would be ideal for HSA to seek a medium between the 2. One would not want to isolate either side, as keeping a loyal following is difficult enough, let alone attracting new customers in today's "smoking = eating babies" world.

Over here in Asia, I would think a similar automobile comparison would be the Nissan Skyline GTR. This beast is muscular,stylish and reliable enough to attract the consumers who would not have been caught dead in a GTT or R34, but has the performance to rival or surpass any street-legal supercar today. The pricing is also spot on, high enough to not make the 350Z redundant, but not utterly ridiculous(think Porsche 911) like the previous ones were. I wish Honda would resurrect and do the same for the NSX.

Personally, what attracts me to the cigar besides the flavor profile is the price. Which is why my regular go-to smokes are the RASS and Mag 46s, both of which offer terrific value for money in terms of complexity and consistency. However, I do like a Coronas Especiales, my weekend car, if you will.

[laficion]

That is one piece of truth if ever I heard one, thanks Piggy

[ksblazer]

I agree with you piggy, I don't buy cigars for a fancy presentation or a cool looking box to show off. I buy cigars to smoke.

A plain old spanish cedar cabinet is fine with me.

[anacostiakat]

Old Skool Piggy! All the way baby!

[dulaney22]

Being new to cigars in general this may be a dumb question, but is there some surplus of CCs? I certainly don't have all the data, but does HSA have any problem selling out their product each year? I ask in an effort to determine is this more about selling cigars or selling cigars at a higher price?

Let's be honest. Aside from ELs and REs, CCs are fairly cheap compared to the mid and upper level NCs. I would think that HSA is looking to up its price in line with the Fuente or Padron family of offerings. However, doing so without changing anything would probably cause quite a stir.

[Colt45]

Especially with regards to the SP thread, I agree. In my opinion (and my opinion only) the last thing needed is to fancy up the box,

add ELs or REs to the line, slick marketing, etc.

Produce SPs that are great tasting, draw properly, that people can afford to buy, in non HavaNUB sizes.

[El Presidente]

I assume some of you remember the RA 898V. Great cigar....DID NOT SELL

Ramon Allones Corona...same. Partagas Lonsdale....same. Partagas Corona.....same Punch Super Seleccion No 2.....same

I don't believe the mantra "produce quality cigars at reasonable prices and people will buy ....bla bla bla"

The reality is that they don't.

The purchasing decision is complicated. Quality of the product is a mid tier consideration otherwise Ramon Allones Corona's would today be the no 1 selling corona in the world.

The distinctive packaging of Cohiba and Montecristo has a lot to do with their success. The drab packaging of Sancho and Rafael Gonzalez has a lot to do with their lack of it. Why does Upmann rank the lowest of the top 6 global brands in terms of sales?.....it has the plainest packaging.

The Samcho Panza Molinos is a world class cigar. I would re-instate the Corona Gigantes, make Belicoso in 50 cabs and drop the non plus. I would re-launch the packaging + a global eductaion campaign

My intent is to save brands and if that means having to accomodate the great unwashed who don't know a Sancho from Santa then so be it. If it means tricking up packaging...then so be it. Members of FOH and other boards/Divans/Clubs would represent WELL under 10% of Global sales. Cigars need to appeal to "The Punter" on the street who really doesn't have a huge undertanding of cigars. The brands under threat need increase in voulume and that increase is not going to come from the 10% who know their cigars. These brands need to begin to appeal to a wider audience.

As for the question: "When did H SA stop being a cigar company and start being a cigar box company?"

The answer is that they never stopped being a cigar company. They started looking around them and seeing that 70's marketing did not work in the 2000's. They started following the trends as opposed to ignoring them.

That was their mistake. Instead of following the trends they should have shaped new ones which took on a distinctly Cuban experience.

[Colt45]

I don't believe the mantra "produce quality cigars at reasonable prices and people will buy ....bla bla bla"

The reality is that they don't.

The purchasing decision is complicated. Quality of the product is a mid tier consideration

The distinctive packaging of Cohiba and Montecristo has a lot to do with their success. Why does Upmann rank the lowest of the top 6 global brands in terms of sales?.....it has the plainest packaging.

My intent is to save brands and if that means having to accomodate the great unwashed who don't know a Sancho from Santa then so be it.

To brass tacks, mediocre cigars with brilliant packaging mean nothing to me. I can only purchase so many cigars, so for me personally, that

comes into play in a large way with regards to what I'll buy. I've smoked through two ten count boxes of SP CGs - if they were still available,

I would not consider buying more - they just didn't float my boat. Put them in gold, jewel encrusted heirloom boxes, and I would not give them

a second look. If they had been on par with the Bolivar CG or the Upmann SW, buy them I would.

So, I don't disagree with you that many are attracted to packaging etc - I'm attracted to flavor. Give me my Upmanns wrapped in a palm

frond and I'll be just as happy. But I do realize that shellacked behike boxes sell. And that's what it's come to - selling a product and making

a euro. That's certainly not lost on me, but that's not where I'm at.

As for saving "brands", in my eyes the brand is Habanos - kind of like GM. How are they doing.........

[El Presidente]

As for saving "brands", in my eyes the brand is Habanos - kind of like GM. How are they doing.........

Liike GM they are having a tough time.

The sensible thing to do ...like GM...is to streamline their range. Get rid of Sancho Panza, la Gloria Cubana, Rafael Gonzalez, El Rey Del Mundo , San Cristobal and Diplomatico. They should drop the Hoyo "Le Hoyo" series and bring both Partagas, Upmann and R&J to 8 cigars each.

What is the market (not us...the 90% of others) saying?

If they follow exactly what the market has told them to do over the past 10 years then the path is clear. Keep the cheap cigars to Jose piedra and Quintero They sell in droves.

More expensive thick gauge cigars. More Regional Releases! Careful with the LE concept because we are getting bored.

We want Tubes and 10 packs.

If a new release is not a Montecristo or Cohiba......be very careful because we don't care.

Why bother with anything under 40 ring gauge?

[Colt45]

The sensible thing to do ...like GM...is to streamline their range.

Well RA, here we look at it differently again. In my eyes GM screwed the pooch - they lost sight of what they were some time ago. Instead

of being concerned with building durable, reliable cars that people could afford to buy and own, they became more concerned with satisfying

shareholders. That is not to say that there have not always been passionate people within the organization, but the people calling the shots

blew it. Big oil can kiss my behind as well.

Produce something I can rely on - I'll do my best to buy it. And I think I'll try and leave it at that.

[El Presidente]

Well RA, here we look at it differently again. In my eyes GM screwed the pooch - they lost sight of what they were some time ago. Instead

of being concerned with building durable, reliable cars that people could afford to buy and own, they became more concerned with satisfying

shareholders. That is not to say that there have not always been passionate people within the organization, but the people calling the shots

blew it. Big oil can kiss my behind as well.

Produce something I can rely on - I'll do my best to buy it. And I think I'll try and leave it at that.

Colt I know we have the same ideas and core beliefs on this issue.

I look at great brands like GM and Maytag and hear the arguments that they have cheapened their brand.

We all fly a flag of patriotism towards national brands but in reality price dictates. Maybe not for you Colt or I but certainly for the majority of punters..."price rules"

Pesonally I think what we are getting from hard goods/white goods manufacturers globally is exactly what the majority deserve. Cheaply constructed, good looking, souless pieces of nebulous crap. They have read their markets perfectly.

[toto]

HSA should run a premium sample program, wherein buying a box of their better selling brands like Monte or Cohiba will have a free sample 2 pack of whichever brand and size they deem appropriate.

That would get the consumers to try different sticks and galvanize retailers on a marketing campaign.

JM2C

[n2advnture]

Excellent question (I've thought the same thing). It seems that HSA has taken marketing strategy from CAO in recent years.

Great discussions and one of the best new threads I've read in a while.

[PigFish]

Cigar throw-down, Prez vs. Pig Live in '09!!!!

Prez. a sharp marketing guru, keen of whit and Habanos Master!

Pig... a commoner, a consumer, opinionated, a man of passion and taste, wily of the ways of the world.

The question... why discontinue a cigar? Prez. says these cigars don't sell. Pig replies, I have pictures of real life customers who bought them. The point and counterpoint witness it live at FoH!!!

Mate... why do we fight over this? I say the same old ****... You reply the same old ****. You should probably bounce me outta' here because I can't stand to watch the best cigars in the world get ruined by a bunch of clueless hacks and when I challenge their decisions you stand in agreement with them.

I think it boastful to be posting too many pictures of cigars but I have to make a point here. Here are some of the cigars that you say don't sell. You said that right; RG's don't sell. I believe that is a quote. Some of these cigars I bought from you! Will you please stop saying these cigars "don't sell," and be more specific to our friends here. "They don't sell," is untruthful and misleading and you know it. I realize that it is a generalization and you're paraphrasing but if we are to discuss things we should try to be at least accurate about the points.

What I think you meant to say is that they did not sell... fast enough, profitable enough, enough, enough or something enough!!! Am I right? The fact is Rob most of them are now gone. I can't find a cab of Party Lonsdales in the primary market at a typical lonsdale price anymore. That means that they are "SOLD OUT." Now wait... How can a cigar that does not sell... sell out? Tough one huh?

The cigar itself is not responsible for poor construction, marketing and over production. It is just a cigar.

You obviously don't like my mantra about quality cigars then!!! -LOL Why do you smoke Rob? Are you attracted to the box, brother? If I put a gold leaf band on a kangaroo **** is it gonna' get you to buy it? **** NO! Now to be fair, I may dupe you once with the "KangaShit" brand but you won't be back for more or are you saying you will? Lets expand on that a minute; shall we talk about our customers?

Rob you are a snob... you know that? You think that our group here are bunch of elitists. It is nice to think of oneself as somehow above the ordinary man and we all do it sometimes. But in general I have no such elitist leanings or inclinations. On a micro scale, peer to peer, I see many differences between myself and my fellow man. But on a macro scale, and that is what we are doing when we include the entire cigar marketplace, I see myself as one of the group; a typical customer. In general then, my tastes, my wants are no different than the market group that I belong. I shun the elitist view! I don't view the cigar market as a bunch of 'Punters.' That view is getting you and your friends at H SA into this mess not my view.

Now don't get me wrong, I am not against marketing. I have been a salesman most of my life and I understand image making; marketing. I don't mind being marketed to. What I do mind is being told what I will like by people who are clueless about it.

You went back to 2000 and said '70's marketing did not work then. Neither did overproducing cigars in poor crop seasons, poor production standards or shortages of materials. In that way the market worked quite well. H SA produced shitty cigars and the market moved away from them. Are you telling me that if we reboxed the shitty cigar one would embrace it? Burning your customer is not a long term business plan. Case in point. Somewhere in this thread you said something to the effect of being careful with EL's. Why? Because you know damn well that H SA is burning that bridge. The minute they produce more than there are new people to try them they will sit on store shelves, it is happening now. You claim they sell. Sure they do. In a micro scale, as a part of an industry that supports millions of units 100,000 out of millions will likely do just that. But if H SA has a goal of say 2 hundred million units, lets say that is the Habanos saturation limit, some are going to sit. The closer you get to market saturation, the more cigars will sit on shelves for a longer period. You can't marketeer away market saturation. There is a global market and somewhere, there is a number which represents all that the market will bare.

I am now getting lost in details!

What did you tell me H SA is gonna' produce this year, down from last year right? Rob my friend, you can't blame that on the Partagas Lonsdale any more. It is not the Rafael Gonzalez line that is responsible for that. That is the result of many things and hanging your hat on expensive Montes and Cohibas is a part of it. Look at your own data man! Don't blame my favorites for this down turn, this is your plan not mine!

You see statistics are what you make of them. As cigars get more and more expensive the market will shrink. Just look at taxation and the cigarette market.

You mentioned JP and low line cigars. You mentioned how well they sell. Well, no ****! Why? Because the market has indicated that they are worth the money. ITS THE MONEY!

Here is where H SA is going wrong and where I think that you are missing my point. There are not simply two levels of cigar buyers. I will say it again. There is more to the market than Piedra and Cohiba. There is a vast range of people who make up a varied market place not wanting to be placed in one of two columns. I am one of them. That means that there are a lot of us.

You take away the Diplos, the Sancho Panzas, the lonsdales and the coronas and we will go elsewhere!

You see Rob some of us have figured out that the Cuban cigar business is a nationalized industry. That they don't deliberately roll an inferior cigar anymore than the roll a superior one. The rollers are not even told what they roll and they all come from the same factories. Today a Cohiba robusto, tomorrow a SD4. In many ways the cigars even taste the same.

It pisses H SA off that their manufacturing costs cigar to cigar are about the same. Someone pounds on a table in typical ignorant communist fashion and demands that they all sell for the same price. The market does not bare the price, they blame the cigar instead of themselves and another good cigar goes by the wayside. I have to laugh at these bastards as they give up another piece of the pie. The hard truth is these people are too stupid to run a successful company and as a result it will be less successful!

I wanted to go on some about buyer classification... what I believe is some real insightful stuff but **** it! I am not on these folks' payroll and if they want to **** themselves I don't care. You know hard times are comin' for these guys brother and I am gonna' sit back, laugh and watch it happen. You can't blame me. You guys are canning the cigars that I buy and that means a few less that you sold in '09.

My new mantra... Don't blame the cigar I like for your loss in market share. You don't make them anymore!

Just in time for Monday morning!!! I love you brother, Ray (aka, The Pig)

[Colt45]

Colt I know we have the same ideas and core beliefs on this issue.

Of course mate - another time.

I'm willing to bet these type of threads are growing tiresome, and that your patience and good will are wearing thin........

[neal875]

Cigar throw-down, Prez vs. Pig Live in '09!!!!

Prez. a sharp marketing guru, keen of whit and Habanos Master!

Pig... a commoner, a consumer, opinionated, a man of passion and taste, wily of the ways of the world.

The question... why discontinue a cigar? Prez. says these cigars don't sell. Pig replies, I have pictures of real life customers who bought them. The point and counterpoint witness it live at FoH!!!

Mate... why do we fight over this? I say the same old ****... You reply the same old ****. You should probably bounce me outta' here because I can't stand to watch the best cigars in the world get ruined by a bunch of clueless hacks and when I challenge their decisions you stand in agreement with them.

I think it boastful to be posting too many pictures of cigars but I have to make a point here. Here are some of the cigars that you say don't sell. You said that right; RG's don't sell. I believe that is a quote. Some of these cigars I bought from you! Will you please stop saying these cigars "don't sell," and be more specific to our friends here. "They don't sell," is untruthful and misleading and you know it. I realize that it is a generalization and you're paraphrasing but if we are to discuss things we should try to be at least accurate about the points.

What I think you meant to say is that they did not sell... fast enough, profitable enough, enough, enough or something enough!!! Am I right? The fact is Rob most of them are now gone. I can't find a cab of Party Lonsdales in the primary market at a typical lonsdale price anymore. That means that they are "SOLD OUT." Now wait... How can a cigar that does not sell... sell out? Tough one huh?

The cigar itself is not responsible for poor construction, marketing and over production. It is just a cigar.

You obviously don't like my mantra about quality cigars then!!! -LOL Why do you smoke Rob? Are you attracted to the box, brother? If I put a gold leaf band on a kangaroo **** is it gonna' get you to buy it? **** NO! Now to be fair, I may dupe you once with the "KangaShit" brand but you won't be back for more or are you saying you will? Lets expand on that a minute; shall we talk about our customers?

Rob you are a snob... you know that? You think that our group here are bunch of elitists. It is nice to think of oneself as somehow above the ordinary man and we all do it sometimes. But in general I have no such elitist leanings or inclinations. On a micro scale, peer to peer, I see many differences between myself and my fellow man. But on a macro scale, and that is what we are doing when we include the entire cigar marketplace, I see myself as one of the group; a typical customer. In general then, my tastes, my wants are no different than the market group that I belong. I shun the elitist view! I don't view the cigar market as a bunch of 'Punters.' That view is getting you and your friends at H SA into this mess not my view.

Now don't get me wrong, I am not against marketing. I have been a salesman most of my life and I understand image making; marketing. I don't mind being marketed to. What I do mind is being told what I will like by people who are clueless about it.

You went back to 2000 and said '70's marketing did not work then. Neither did overproducing cigars in poor crop seasons, poor production standards or shortages of materials. In that way the market worked quite well. H SA produced shitty cigars and the market moved away from them. Are you telling me that if we reboxed the shitty cigar one would embrace it? Burning your customer is not a long term business plan. Case in point. Somewhere in this thread you said something to the effect of being careful with EL's. Why? Because you know damn well that H SA is burning that bridge. The minute they produce more than there are new people to try them they will sit on store shelves, it is happening now. You claim they sell. Sure they do. In a micro scale, as a part of an industry that supports millions of units 100,000 out of millions will likely do just that. But if H SA has a goal of say 2 hundred million units, lets say that is the Habanos saturation limit, some are going to sit. The closer you get to market saturation, the more cigars will sit on shelves for a longer period. You can't marketeer away market saturation. There is a global market and somewhere, there is a number which represents all that the market will bare.

I am now getting lost in details!

What did you tell me H SA is gonna' produce this year, down from last year right? Rob my friend, you can't blame that on the Partagas Lonsdale any more. It is not the Rafael Gonzalez line that is responsible for that. That is the result of many things and hanging your hat on expensive Montes and Cohibas is a part of it. Look at your own data man! Don't blame my favorites for this down turn, this is your plan not mine!

You see statistics are what you make of them. As cigars get more and more expensive the market will shrink. Just look at taxation and the cigarette market.

You mentioned JP and low line cigars. You mentioned how well they sell. Well, no ****! Why? Because the market has indicated that they are worth the money. ITS THE MONEY!

Here is where H SA is going wrong and where I think that you are missing my point. There are not simply two levels of cigar buyers. I will say it again. There is more to the market than Piedra and Cohiba. There is a vast range of people who make up a varied market place not wanting to be placed in one of two columns. I am one of them. That means that there are a lot of us.

You take away the Diplos, the Sancho Panzas, the lonsdales and the coronas and we will go elsewhere!

You see Rob some of us have figured out that the Cuban cigar business is a nationalized industry. That they don't deliberately roll an inferior cigar anymore than the roll a superior one. The rollers are not even told what they roll and they all come from the same factories. Today a Cohiba robusto, tomorrow a SD4. In many ways the cigars even taste the same.

It pisses H SA off that their manufacturing costs cigar to cigar are about the same. Someone pounds on a table in typical ignorant communist fashion and demands that they all sell for the same price. The market does not bare the price, they blame the cigar instead of themselves and another good cigar goes by the wayside. I have to laugh at these bastards as they give up another piece of the pie. The hard truth is these people are too stupid to run a successful company and as a result it will be less successful!

I wanted to go on some about buyer classification... what I believe is some real insightful stuff but **** it! I am not on these folks' payroll and if they want to **** themselves I don't care. You know hard times are comin' for these guys brother and I am gonna' sit back, laugh and watch it happen. You can't blame me. You guys are canning the cigars that I buy and that means a few less that you sold in '09.

My new mantra... Don't blame the cigar I like for your loss in market share. You don't make them anymore!

Just in time for Monday morning!!! I love you brother, Ray (aka, The Pig)

Spoken like a true salesperson, I'm afraid.

Pig: If you understand basic marketing, you KNOW THAT you have to cut your losers and support your winners. It is not an option if you want to stay in business. The marketplace will decide which is which and in this case, once again, it has.

When the market stopped buying Oldsmobiles, GM stopped making them even though it was the oldest US brand of cars. But, who the hell cares--NOBODY IS BUYING THEM. Okay, so that phrase is a bit hyperbolic, but let's not be semanticists here, you know what that means. It is not selling in sufficient numbers or bring other compensating benefits to the parent company to warrant continuing its manufacture. The last year Olds was in business, it still sold several hundred thousand copies of the car--just not good enough for a world that needs 600,000 a year to survive. PLUS it took the brand value down by positioning GM as old and stodgy. Was it built any worse than a Chevy or Cadillac? Of course not. Just didn't sell. NOBODY WANTED IT. But what killed them is they waited too long to act on this and many other tough decisions about what to make and what to not make. Can you say bankruptcy?

When a television network cancels a US prime time show--there are 10 million people who are out of luck. 10 million people who love that show and watched it every week. The executives canceled the show because NOBODY IS WATCHING IT. Same thing--it just doesn't cut the mustard in a world where you need 13 million to stay alive and profitable. And, so on.

More than half of my collection is comprised of three cigars. Bolivar Immensas; Punch SS#1 and Bolivar CE in cabinet. More than half. And, guess what--all gone. I could show you photos of mine all stacked up nicely just like you did. BUT THEY ARE GONE. NOBODY BOUGHT THEM. Well, almost nobody. It's the marketplace voting with their dollars and, this time, I lose.

And, unfortunately for you, loving RG in the 21st century just turned out to be a bad choice in love. Because when Habanos looks at the numbers and looks at what it will take to get this brand off of life support--you wound up in a game of musical chairs without a chair of your own. Hey, you could have also loved Immensas or SS#1 like me.

This part of Habanos' behavior is very responsible and to be applauded. Dump the antiquated and slow-moving inventory--don't make dealers sell what their customers don't want. Refresh the brand for current customers and new entries looking for a contemporary LOOK (yes packaging), taste and approach. I don't think you want Habanos to be the first luxury brand to ever wrap its product in a brown paper wrapper (I hope you don't). Packaging sells product--often more than the product itself and it is why companies make an incredible living designing packaging for some fairly serious brands. I think that Habanos is attempting to shift the look of the brand into a 21st century design and they aren't doing a bad job so far. The tubes are gorgeous. The new bands and the overall presentation is ticked up by a good measure in the past few years. Don't resist change--those new bands are fabulous. I don't need a history lesson on why an ugly brown and white band is better than a beautiful, embossed and foiled one is on my Upmanns. Besides, anyone under 30 just won't bother to even try it otherwise. Not good. So much for the outside-the-box experience.

Beyond packaging, it is hard to argue that the product itself (the inside-the-box experience) is also dramatically better than 5 years ago by most reasonable measures (no, not all). I still get AT LEAST 10% of every box that is completely or largely unsmokeable due to bad construction. But it used to be 2-3 times that amount. Improvement for sure. Flavors are more consistent and generally just better. Again: another good move directionally.

So having improved the packaging and the product, the only thing left to work on is the business model itself--because without the cash--there will be no improvements and a brand that we all love will continue to struggle which is not good for the product or our love for it. And they are working on that business model. And some of us are going to hate it. I don't think they will do anything draconian like get rid of all brand except the 5 majors--it just doesn't make marketing sense. But they will continue to cut the cigars that NOBODY BUYS. They will continue to produce expensive LEs and REs to liquify the books. And they will continue to raise prices.

And while we are on this subject; a quick question. Why should a Magnum 46 sell at the point of sale for less than a corona sized Padron Anniversario--never mind a 1926 Series? The answer is simple: Because Padron marketed those sticks as the ultimate luxury cigar experience. Period. How do we know that? Because the bands are to die for; the packaging is amazing and the price is astronomical. The three ingredients of all luxury products. OH and they are pretty good cigars, too. But, there is no way that a 1926 holds a candle to a well made Magnum 46--even though it sells for more and is sought after by cigar fans with the same enthusiasm as a Mickey Mantle rookie card (sorry for the US references). Having said that, you can be sure that if that 1926 stops selling, Padron will kill it in its tracks. And the people who love it will lose it. Welcome to reality.

And it is here that there is true opportunity. Habanos must get better at offering premium product lines in their portfolio that are like Rob's PSP section. The best of the best. Not everything they make can satisfy that promise--but a portion of the lines could. And, hopefully, they will take notice because without this segment of their business, the real value of the brand will never be realized. It is what Cohiba should be but isn't really, consistently or fully.

So, my fellow FOH lover, you soon may lose one of your favorite smokes. In fact, you most certainly will. But be happy, because with the miserable sales of RG cigars worldwide, you will still be able to find your favorites in stock for years following any discontinuation--- and at pretty good pricing. See there always is a silver lining to the cloud.

If you want your favorite companies to survive, support the tough decisions even when you are on the short end of the stick. The CC industry was a total mess a few years back and it will take some tough decisions to help it get healthy. And putting an end to sticking dealers with the job of moving the stuff NOBODY WANTS is one of those tough decisions that is being made now-- and I think correctly.

Oh, and as far as your example of the Partagas Lonsdales being sold out goes: First, you can still find 25 boxes around--can you say Google? Second, it took YEARS to get rid of the rest of them. Years. I love that cigar too--but it was time for it to go. I guess the same is true for the recently canceled Bonitas as well as the SS#2, Bolivar Lonsdales, Punch PP, Partagas Petit Corona and many other 'classics' that I still miss.

It's all good.

[Stormin691]

WOW GREAT POST- AND I COMPLETELY AGREE.... BRAVO....

[Ken Gargett]

piggy, the forerunner is the wine industry (and i have always suspected that habanos keep may be half an eye on it as there are so many similarities).

have a look at how packaging and labels have gone in the last few decades. flashier labels, bigger, heavier bottles, any marketing trick that can grab the attention of the consumer for a second longer than the bottle next to it and so possibly have a better chance of selling.

there are many many people out there who have no idea what is good, bad or indifferent in the world of cigars - including everyone of us when we first started. the box is just part of what gets us to buy (think of the bloke in the duty free - decides he wants a box of these cubans he has heard about. does the 18 year old picking his nose at the counter really have any idea? chances are he'll take his chances so it is likely that it will be the box that informs the final decision).

think of cigar boxes as the male birds of paradise and the less knowledgable customer as the poor female who makes her decision on plumage.

piggy, you know what you want but many don't. they do know they want something. they have to make a decision based on something. they are not going to buy books on cigars and research, they may not have knowledgable friends or even know a forum like this exists. how else?

also, if we return to wine, think of grange. a bottle with a label like that if released today would disappear without a trace. because grange is known, has the rep etc, it works (leaving out pricing and overpricing issues). if grange was hitting the market today, it would need a very different make-over.

i wouldn't really care too much if all cigars were in similar boxes with a small printed note attached with name, rank serial number etc but it isn't going to happen.

[El Presidente]

Ray, you know I enjoy the exchanges between us.

It is not so much two lumbering galleons firing broadsides which gets me excited but the opportunity to find a splinter or plank of understanding that can help my mates at HSA to make a better product profitably and through that a better industry.

Am I an elitest/snob? I hope not. The term "punter" here is not derogatory. The mongrel dog is invariably the smartest

However, i do run a premium cigar business. I know I do because when I sit down at regional meetings or discuss my numbers with HSA/PCC my breakdowns are very different to other major retailers. My average "stick" sale (I hate the term but it is a standard) is some $4 higher than the average. That means that my clientelle purchase a higher grade of cigar. As an example I sell 5 times more Cohiba Robusto than I sell R&J No 2 Tubos. That is not the norm in this industry. While I am a significant retailer within my region, my numbers are inconsequential when looking at the full breakdown of what sells within the region.

This reality often puts me on a collision course with industry execs. They are often bemused why I care so much for Diplomatico or Sancho or La Gloria or El Rey Del Mundo or Rafeal Gonzalez when those five Marques make up less than 3% of total sales.

I am not here to sink those Marques Ray, I am trying to find ways to make them economically feasible in order that each year they are not running the gauntlet of discontinuation.

Leaving them as they are is not going to help their long term survival. Those who care about history and great cigars are looking for ways to redefine, reshape, re-launch and invigorate these Marques.

You know me well enough to know that I care squat about packaging. I care about great cigars and the people I share them with. However I am a realist in that I understand how packaging affects B&M buyers.

Increasingly (trend) The majority of Habanos sales globally do not come about from traditional box buyers. The majority come about from Singles, Tubes, 3 packs, 5 packs and increasingly 10 packs. Those bottom 5 brands I mentioned Ray do not stand a chance as not one iota of effort has gone toward allowing them to compete in the new climate. I will pluck a number out of thin air mate but if .1 % of global cigar smokers can pull out a stash of Rafael Gonzalez that you have then I will run around your acreage naked. You represent the average cigar smoker about as much as Elle McPherson represents the average woman.

Sales globally this year look likely to finish down some 30% on 2008. A mix of economic plight in key markets plus smoking restrictions in same have taken their toll. Their is a glut of stock and traditional buyers are purchasing less. The HSA price increase was a disaster but we have covered that elsewhere. HSA is looking to invigorate its key brands to get itself out of a hole. Unfortuantely in my opinion the Monte Open was a mistake but time will tell.

It is my firm belief that re-invigorating the low key Marques is an essential part of the mix. Education and packaging would help. Diplomatico boxes of Dip 1/2/3/4& 5 would sell well. Same for ERDM & RG particularly if you introduced a quality new cigar to each. Tubes for the Sancho Beli and Dip 2 would also be a success.

Excusing the pun but they need to think outsde of the "Box" on these. The market has rejected any commercially viable option of these selling longterm in exclusively 25's. Even during the boom HSA years of 2001-2007 these marques still sold under 3% of total sales. We need to get that number up.

No question better quality cigars are part of the solution. A little more love towards these Marques will go a long way. Lower Price? perhaps but gut feel is that you could reduce the retail price on these by an average of $2 a cigar and not really see any increase in global sales volume.

Re-formatting, repackaging and re-launching to me is still the most logical solution. HSA needs to engage the wants of todays purchasers without foresaking its history. If the same attitude was taken with the Partagas Lonsdales/Partagas Corona/Punch SS2/H Upman Super Corona then we may have saved them. It is a disgrace they were allowed to perish and they perished simply (you may not believe me) because enough people did not purchase them to make them commercially viable. The Tobacco went to Cohiba VI, Partagas P2, Monte Edmundo, Monte Petit Edmundo, HDM Petit Robusto, Upmann Magnum 50 etc. I will take a stab in the dark but suggest that the Magnum 50 and Monte Edmundo comprise more cigars sold than the bottom six Marques (by volume) put together. HSA will point to a great success. I disagree. Back to the Purebred/mongrel dog analogy, what we have done is diminshed the bloodline of the Habanos cigar. We have a visually better looking animal but one which is genetically weaker.

Just my 2 cents. I don't have the answers but I know the current situation will not be permitted to drift for much longer.

[Ginseng]

Fascinating thread, and mind expanding to boot. Well argued, mates. On all sides.

Wilkey

[jfury76]

What a thread!! Great points all and I particularly agree with Rob's point that packaging shouldn't matter one damn bit but we all know that in today's marketplace it really does. Hence the high priced Padrons and the like; while much of this kind of product is good, it is not great when compared with Dip 1/2/3, Punch SS2, etc. Unforturnately, as H SA learns how to effectively compete in the "new" market, habanos lovers of old will most definitely lose out.

I guess the real fear is that nobody truly knows where things are going to end up with some of the local habanos marcas. To lose so many good and even great sticks to the Monte Open et al. is a crying shame.

[demiurgic]

thanks for this lovely post. Yummy. Posts such as these make me glad to be part of this dear forum which I visit intently and frequently, albeit post in rarely.

Will HSA reconsider the second 15% price increase scheduled for this year, as Prez gave the heads up earlier the year?

Will the average newbie kids who are picking the singles and 10 packs dictate the pool size of variety from which the older more seasoned smokers have to choose from? These kids will then have a much lesser pool themselves as their palate evolves in the future if only THEY are catered to. Killing the goose that lays the golden egg scenario.

I haven't the slightest....All I know in my little business is that it helps to offer variety. my customers like it, and burden of choices as it may be in our society, my customers demand it of my small product line and beam when I introduce something new on the menu for their palate. they may not buy it, but they appreciate it and perhaps feel a little empowered by choice? Not sure.

A saleswoman selling teapots said that she carried 4 sizes of tea pots.

2 sold well, one did okay and the last one...well... she only sold one a year of, but she NEVER liked to be out of stock of it.

Variety on the shelf is critical to her success she said.

I'll be watching and reading the progress of Habanos Cigars which I love so well. May some sense and inspiration be avaialbe to those who have the power to make key choices here.

Aloha.

[bunburyist]

Pesonally I think what we are getting from hard goods/white goods manufacturers globally is exactly what the majority deserve. Cheaply constructed, good looking, souless pieces of nebulous crap. They have read their markets perfectly.

I think, or at least hope, there is a limit to how far the analogy of cheap crap for the masses can be overlaid onto the cc industry.

Purely because of product definition. Cuban cigars fall into a relatively niche bracket in that they are expensive for what they are ($10-20 for something that goes up in smoke), yet their sales success is surely reliant to a significant degree on quality. I disagree with Pigfish in that are think there are two types of consumer:

1) the punter who smokes for pure enjoyment, understands the value and history of the product and brand, and is a lifetime buyer. So anyone on here for example.

2) the one-off / rare buyer. Like me when I was 17yrs old with my mates in a pub buying shyte cigars from behind the bar with no idea, and unable to tell the difference between a hamlet and a punch. Smoking purely because I thought I looked like Clint Eastwood, despite the fact he never turned green when he smoked.

But how do you transition from group 2) to 1)? To me, it comes from having that epiphany moment, when you first 'get' a cigar. I got it when I suddenly started tasting all those earth, cocoa and pepper notes, and since then I've been hooked. Will you still get that if you lower the quality? And if that goes, then so does group 1).

Maybe the the question comes around to whether you see value in a section of the market that doesn't bring the most profitability, but to me is still the keystone. The guiding light if you like, or if you really fancy yourself, the guardians of what is good, true and right about the habano.

I can't claim to know much about sales figures or the profitability of different marcas and vitolas, but surely the HSA usp is that their cigars simply are better. Not vastly, crushingly better, but they are better. If they lower the quality and go in the direction of the Monte Open range, surely they're opening themselves up to more direct competition from the Dominicans, Hondurans etc. So sales are down 30% this year.....that's pretty bad, but come on, the industries that have grown this year are rare. Selling out by producing more bland, easy to smoke golf cigars is not the way to go. Resurrecting brands with huge potential like La Gloria Cubana and El Rey Del Mundo wouldn't take much. Sancho Panza and Rafael Gonzalez I'm less sure, but I think they have a place.

And I think you're all lying to yourselves when you say the boxes and branding is purely a marketing consideration and doesn't matter, and that you'd happily see your smokes arrive in a tupperware box with a thin bit of cedar. Bollocks! The artwork, the sometimes exquisite lithography, the history, the heritage - it's so much a part of the habano smoking experience and is something that should be given more attention, not less. I'm surprised more people don't think the same, but then I'm one of those losers who uses a hairdryer to take off the anti-smoking labels from the nice boxes. You can still appreciate all the flavour and aroma experiences of a cigar, and like the box it comes in too you know. It's a bit as if there's some macho barrier to admitting it, there shouldn't be. I like and appreciate art, and if I can get it on a cigar box, I'll take it. That doesn't make my cojones any less huge than they are.

One question I would ask to El Pres, is what exactly do you mean by the 'current situation' not being allowed to drift on. Is there some major cull or overhaul planned, or is it just an annual review?

[PigFish]

Fascinating thread, and mind expanding to boot. Well argued, mates. On all sides.

Wilkey

I could go on and on but I will have to wait to start a new thread and a new argument!!! -LOL I just could not leave this one with Rob sounding like he was parroting the H SA line! I hate when he does that!!!

As for me, I don't buy the company line! I am an ardent supporter of Habanos heritage cigars. Most companies compete against themselves and sell more than one model. Saying that a hundred models of cigars is as complex as one watch, let alone an automobile is lost on me. I reject the argument and the analogy.

My prediction is that market share for Habanos will continue to contract; they are a poorly managed company. Lets watch and see. As they lose market share it will be interesting to see who is to blame on the next round. Like I said... don't blame the Partagas Lonsdale!

I will leave my friends here with another analogy to ponder. Lets say that FoH as 200 members that don't contribute. Should they be turned off? Ponder that for a while and you may understand what I think about a cigar that contributes 1% of sales.

In any event gentlemen thank you for reading my material, the complements and the challenges. -Piggy