 Views from a Smoke-Filled Room
by Rich Perelman
Editor-in-Chief
Los Angeles, August 18 – It didn’t make any sense the first time.
U.S. premium cigar sales suddenly rose by 25% from 1990 to 1994, then more than quadrupled between 1994 and 1997 before “collapsing” to “only” 330% of the 1994 level in 1998 and 250% of the 1994 level in 1999.
Now sales are on the rise again, with an unmistakable trend toward a high-temp re-heating of the U.S. market. Is this the second coming of the Cigar Boom?
If so, why?
The Cigar Boom revolutionized cigar consumption in the United States. The entire “premium business” – that is, the handmade cigars – was only 100.3 million units in the entire country in 1994 and that was up from just 73 million just three years before.
Then things went crazy, to 136 million in 1995, 243.5 million in 1996 and 417.8 million in 1997 at the peak of the Boom. Consumption cooled to 334.6 million in 1998 and down to a manageable 248.3 million in 1999, the year of the “Cigar Bust.”
Curious, though, that if we take away the overheated 1997 and 1998 years, consumption has risen every other year from 1993 on. And the rate of increase is getting significant:
• 2000: 249.1 million
• 2001: 252.5 million, + 1.4%
• 2002: 264.6 million, + 4.8%
• 2003: 274.3 million, + 3.7%
Now comes 2004, with imports for the first five months of the year up by 15.3% over 2003 data with double-digit increases in year-over-year comparisons in three of the first five months. In fact, month-over-month comparisons of cigars imported in 2004 over 2003 have shown an increase for six straight months and eight of the last nine months.
If this trend holds, we are looking at imports of 316.3 million cigars for 2004! Holy cow!
But why?
Anti-tobacco fever in the U.S. is at an all-time high. State after state has banned smoking in public places, aimed primarily at cigarettes, but driving cigar smokers home or at best to a few cigar stores with lounges or cigar bars.
I have no certain answer, but maybe a feeling . . . disguised as an insight.
Traditional demographic studies of cigar smokers show them older and higher in income as a group than their cigarette-smoking counterparts. It’s now been seven years since the height of the Cigar Boom of the 1990s and that’s an eternity in the maturity of the 20-somethings who caught what was a fad in 1996-97-98 timeframe, but are old enough now to appreciate quality. Now only in cigars, but in food and drink as well. Consider the concurrent explosion going on today in super-premium spirits.
We are not in the midst of the ‘90s Internet Bubble economy, but the economy is getting better. All those folks who still have humidors (and there are legions) may be remembering that there was something happy about cigars they enjoyed . . . and are ready to enjoy again.
Thanks to the Internet and a welcome trend from manufacturers and retailers to offer boxes of 10 and sampler packs (detailed in depth for our CigarWire subscribers in our exclusive Comparison Shopper chart), buyers have more choices than ever before. The quality of the cigars available has never been higher and that’s one more reason that buyers keep coming back.
To paraphrase the Lay’s potato chip folks, “you can’t smoke just one.” It appears that few are stopping at all right now.
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