A Note On The Cuban Cigar IndustryEssay Preview: A Note On The Cuban Cigar IndustryReport this essayEven for the uneducated cigar smoker, Cuban cigars are known as the upper echelon of style and class. They have a distinct taste and feel and are considered by some as containing the worlds best tobacco. Cubas land is possibly the ideal place to grow the most tempting cigar tobacco in the world. Though other countries are making very similar cigars, Cubas mystique still has a strong hold over cigar aficionados worldwide. Given the current popularity of cigar smoking in the United States, and the fact that Americans like the finer things in life, it would only make sense that the Cuban cigar industry would be a good entity to devote your investing money in. However, an important aspect that must be considered is the fact that the importation of the Cuban cigar to the United States is illegal. Due to the trade embargo imposed on Cuba over forty years ago, the fine specimens that are Cuban cigars are still barred from reaching our borders even today.
John Hernandez is prospecting for good investment opportunities within the next month to make use of a one million dollar inheritance. He is an avid cigar smoker, and is excited about the possibility of the trade embargo with Cuba being lifted. With this just being speculation, the real issue is whether he should go forward in investing in the Cuban cigar market.
The most prominent problem facing external investment opportunities today for the Cuban cigar industry would be the forty plus years of a trade embargo with the United States. With the United States being the largest cigar market in the world, Cuba (and the individual investor) is missing out on a potential revenue goldmine. Obviously the potential slackening of the trade barrier would be an investors dream within this industry, but the reality of the situation is still very unpredictable. With presidential elections looming in the United States, there is no way of knowing whether a candidate will stick with the current political policies concerning Cuba, or whether they will eradicate the embargo once they are elected to office (flip-flopping on issues is almost as assured of as death and taxes).
The cigar business and Cuban culture
Budis Cigar’s official website describes the cigar business here: “This is the most expensive, most beautiful and most widely available cigar in the world. Although in a relatively small niche in the tobacco industry, this cigar is a big winner among Cuban consumers who can now purchase this world’s largest and most expensive cigar in a relatively short period of time. Its exceptional quality and exceptional price is one of the best selling cigars and a direct competitor to cigarettes, cigars and plastic cigarettes. This success is thanks in part to many loyal customers who are satisfied and willing to spend more, and to the Cubans who continue to support this outstanding product.” The Cuban website also notes that it has “been developed so that the production is a continuous and reliable process.”
The average cost of a humidor at Budis Cigar is a bit more than double that of the cheapest tobacco in the world, a $12. It’s worth mentioning, however, that for a company built around a simple and simple philosophy that’s actually popular in the U.S., this is by far the largest deal in the cigar industry. Though Budis doesn’t have a logo on the wrappers, they do have one under the logo. The company also manufactures cigars at the Cuban factories in Cuenca, Cuba that are imported from there.
The majority of the “magnificent” selling materials were used by the firm to make the cigars, including charcoal, binder flakes, filler, and the wrapper. The company’s cigars cost $28.00, and they are a nice, light brown to slightly brown finish, and with a black background. Budis makes cigars up to 1,000 grams of cigar-grade filler per pack, but other than that, every box is packed with 2.4 gram of filler. In other words, there are two types of filler, each with its own flavor profile and other major health and longevity factors.
In some respects, the cigars are “a little too light green for my tastes” when compared to similar offerings from smaller companies like Philip Morris or Humana (which aren’t all that different from the Cuban cigar market). The smoke can even get a little too fruity (a hint of the sweetness of binder-flavored tobaccos). The aroma can be quite bitter on the tongue, but ultimately, the cigar will turn out to be quite pleasant.
Budis Cigar’s “coupling plant” is quite similar to many of the other cigar makers that make “traditional” Cuban cigars, including Fruca, Frelo and Cimarron. Some of these blend themselves with some other tobaccos in order to provide a good cigar. When purchasing a box of cigars, it is customary to double-wrap them in foil so that the tobaccos that are packaged are as close to an ashtray as possible. On the flip side, you can double-wrap them in paper bag or even a similar piece of paper or cardboard (which could either be the most attractive or worst thing about making Cuban cigars, I guess), depending on your tastes preferences and where you are in the world.
Budis is the only company
The cigar business and Cuban culture
Budis Cigar’s official website describes the cigar business here: “This is the most expensive, most beautiful and most widely available cigar in the world. Although in a relatively small niche in the tobacco industry, this cigar is a big winner among Cuban consumers who can now purchase this world’s largest and most expensive cigar in a relatively short period of time. Its exceptional quality and exceptional price is one of the best selling cigars and a direct competitor to cigarettes, cigars and plastic cigarettes. This success is thanks in part to many loyal customers who are satisfied and willing to spend more, and to the Cubans who continue to support this outstanding product.” The Cuban website also notes that it has “been developed so that the production is a continuous and reliable process.”
The average cost of a humidor at Budis Cigar is a bit more than double that of the cheapest tobacco in the world, a $12. It’s worth mentioning, however, that for a company built around a simple and simple philosophy that’s actually popular in the U.S., this is by far the largest deal in the cigar industry. Though Budis doesn’t have a logo on the wrappers, they do have one under the logo. The company also manufactures cigars at the Cuban factories in Cuenca, Cuba that are imported from there.
The majority of the “magnificent” selling materials were used by the firm to make the cigars, including charcoal, binder flakes, filler, and the wrapper. The company’s cigars cost $28.00, and they are a nice, light brown to slightly brown finish, and with a black background. Budis makes cigars up to 1,000 grams of cigar-grade filler per pack, but other than that, every box is packed with 2.4 gram of filler. In other words, there are two types of filler, each with its own flavor profile and other major health and longevity factors.
In some respects, the cigars are “a little too light green for my tastes” when compared to similar offerings from smaller companies like Philip Morris or Humana (which aren’t all that different from the Cuban cigar market). The smoke can even get a little too fruity (a hint of the sweetness of binder-flavored tobaccos). The aroma can be quite bitter on the tongue, but ultimately, the cigar will turn out to be quite pleasant.
Budis Cigar’s “coupling plant” is quite similar to many of the other cigar makers that make “traditional” Cuban cigars, including Fruca, Frelo and Cimarron. Some of these blend themselves with some other tobaccos in order to provide a good cigar. When purchasing a box of cigars, it is customary to double-wrap them in foil so that the tobaccos that are packaged are as close to an ashtray as possible. On the flip side, you can double-wrap them in paper bag or even a similar piece of paper or cardboard (which could either be the most attractive or worst thing about making Cuban cigars, I guess), depending on your tastes preferences and where you are in the world.
Budis is the only company
John has an interesting investing dilemma. There are many solutions to what he could do with his inheritance; however there are three obvious solutions: he could invest all of his money into the Cuban cigar market, he could partially invest his money in the market, or he could invest nothing in the market, and research other means of enhancing the returns on his money.
The best case scenario would be that John invests his entire inheritance into the Cuban cigar industry and the embargo with the United States would be lifted. The reputation of the Cuban cigar would lift it to stardom with its new found audience in the United States, and John, along with other early investors, would be far richer than their wildest dreams. However, the reality is that even if the embargo with the United States was eliminated, it could be argued that some of the charisma and charm of the Cuban cigar comes from the inability to get them in the United States. If the cigars were as easily obtainable, would the popularity be very long lived? Americans are a fickle bunch, and even now, the popularity of cigar smoking is decreasing. It is possible that the legalization of the Cuban cigar within the United States could turn this trend around, but it just as possible that it would not be long lived.
I agree. However, one could argue that a good number of people would be happy to see those “American” cigars smuggled over the border with their Cuban friends while the “Cuban” members continued to use them in the United States. As I recently saw, people in their 20s who live to tell the tale had the chance to try it at home. However, while I understand why it turned out to be so popular with many, I see no place in the United States where even the “American” cigars are smuggled.
In light of my comments made in the comments section above, I am of the opinion that if the U.S. legal system were up to the task of ensuring a consistent and responsible supply of Cuban cigars to the West, it would be difficult to get there. It would also be interesting to know how many American cigar smokers have tried the “American” cigar for the past year and who has not. And I am sure a few dozen people have made the mistake of thinking that, since they are using the Cuban cigars, those Americans, like me, may not know how to smoke them.
The fact remains that “American” are an essential part of Cuba’s life because of their cultural uniqueness, the way they smell and smell. From their youth to their mid-twenties, Cuban generations are drawn to cigars and cigars, which they generally like. Cuba is not perfect. There are still many of those who would argue that it was the American cigars produced in U.S. factories that kept these cigars flowing at the United States level that were the driving force that drove both the American and Cuban economies. But with the growing number of recent Cuban cigars becoming available and the availability of thousands of American-made products to be smuggled to the West, it seems reasonable to believe that for some, “American” cigars and their “Cubans” might be that much more attractive.
The question remains, though, is what will happen when “American” make something in Cuba about an American cigar? At the end of the day, the answer is no, because it will be the product that the American community hopes this will be, and the consumers hope that the product will be.
I agree with many of you when I say that as Cuban cigars become more popular, the American cigar consumer will not be so happy about what they see in someplace else. However, I do want to stress what I think should happen. As the cigar smoker, I am happy to hear that the cigar we have in our homes is in an American brand, because it is of a good quality. However, there is no other way for the cigar lover, the cigar dealer or the cigar smoker to realize what a good quality cigar is. A cigar with a fair quality will be in much better hands than a cigar that has a weak quality. Some have even told me that the only way that a cigar will “win” is if only one person is lucky enough to own one and to own the cigar through the rest of our lives.
So what will the next year bring with the cigar that most people may see when they read my post? However, here is the bottom line on the subject:
• A long-range strategy to grow and sell American “Cuban” cigars and cigars as cheaply and widely as possible is all that is needed.
• People are not likely to buy much “Cuban” cigars in the next few years.
• No one will buy the Cuban cigar on the streets.
Another alternative for John