How does a cigar line become branded (and expensive)?

havanaalhavanaal Posts: 152 ✭✭
Given the volume of different offerings of some high cigar brands, I'm curious how they come to market particular blends, especially when they don't seem to own facilities of their own. By that I mean guys like Alan Rubin and Kaizad Hansotia don't grow any tobacco, yet at some point in the process cigars appear with their bands on them--ready to go out by the thousands often at exorbitant price points. So my question is: how do these expensive lines proliferate? I get the feeling the magnates walk into factories where they don't control production, try some offerings, then contract for as many boxes as they think they can sell. Am I close to the truth here, or way off base?

Comments

  • Amos_UmwhatAmos_Umwhat West TNPosts: 3,147 ✭✭✭✭
    Interesting question. I've often wondered if being given a rating by Cigar Aficianado automatically doubles or triples the price of a cigar.
    I'm outraged!  I've self-identified as Warren Buffet, but the lady at the bank just keeps laughing at me and won't cash the checks!  I'm so offended!  Discrimination, I say!  Who are they to judge?
  • kuzi16kuzi16 Posts: 14,587 ✭✭✭
    havanaal:
    Given the volume of different offerings of some high cigar brands, I'm curious how they come to market particular blends, especially when they don't seem to own facilities of their own. By that I mean guys like Alan Rubin and Kaizad Hansotia don't grow any tobacco, yet at some point in the process cigars appear with their bands on them--ready to go out by the thousands often at exorbitant price points. So my question is: how do these expensive lines proliferate? I get the feeling the magnates walk into factories where they don't control production, try some offerings, then contract for as many boxes as they think they can sell. Am I close to the truth here, or way off base?
    Close. in the Case of Gurkha, they search out tobacco that is rare or limited in quantity, often too small to make a regular production line (so it sits around and ages). they then buy the tobacco, make a blend and contract out a factory to roll them up.
    since the tobacco is rare, or aged, or limited quantity, they often pay a good amount for it and then are able to advertize it as rare or short run-- adding to the price.
    not owning a factory and contracting out also adds to the cost and in the end price.


    of course if you look at the other end, or total control from soil to sale, you often will get higher prices as well. For example Davidoff buys very little tobacco (and the stuff they do buy is still scrutinized), they own all of their factories, they even select who gets to sell their product. all the time and care and uncompromising quality adds up to one expensive cigar.
    Amos Umwhat:
    Interesting question. I've often wondered if being given a rating by Cigar Aficianado automatically doubles or triples the price of a cigar.
    on that note, the last time a Davidoff made the top 10 in CA cigar of the year was in 2004 in the #9 spot with a 91 rating. It was the Millennium blend Robusto. I rarely see Davidoffs with a rating over 90.
    Last year's #1 was the Flor de las Antillas Toro with a 96 rating and a $6.90 price tag
  • CigaryCigary Posts: 630
    There is a cigar chain whereby those who control the distribution and manufacturing tend to lobby those who tend to hold sway ( CA, etc. ) and then there are those companys who actually make great cigars...Illuisione, DE. Fuente, Padron that when they talk....people listen. Gurkha tends to do things backwards in the industry and there isn't one Gurkha I'd pay more than $6 for. Fuente sells the Opus and Sharks which tend to charge quite a sum but they are some of the very best cigars IMO...and then there are cigars that just ride the quest of the wave by fans who drive the market when a new cigar comes out.
  • havanaalhavanaal Posts: 152 ✭✭
    Thanks for the enlightenment Kuzi. Cigary makes an interesting observation, that brands that control production from seed to box seem to be able to put out a superior product. I love AF's (doesn't everybody?) DPG products, and Padron, and I respect the fact that one family can vouch for the quality. However I will say that my favorite brand is Filipe Gregorio, the most consistently perfect cigars I've found--and he's just a middle man.
  • rzamanrzaman Posts: 2,650 ✭✭✭
    You don't want to know the truth. Trust me it will hurt your feeling and your love about many top brands. That's all I can say for now.
    havanaal:
    Given the volume of different offerings of some high cigar brands, I'm curious how they come to market particular blends, especially when they don't seem to own facilities of their own. By that I mean guys like Alan Rubin and Kaizad Hansotia don't grow any tobacco, yet at some point in the process cigars appear with their bands on them--ready to go out by the thousands often at exorbitant price points. So my question is: how do these expensive lines proliferate? I get the feeling the magnates walk into factories where they don't control production, try some offerings, then contract for as many boxes as they think they can sell. Am I close to the truth here, or way off base?
  • big chunksbig chunks Posts: 1,607
    rzaman:
    You don't want to know the truth. Trust me it will hurt your feeling and your love about many top brands. That's all I can say for now.
    havanaal:
    Given the volume of different offerings of some high cigar brands, I'm curious how they come to market particular blends, especially when they don't seem to own facilities of their own. By that I mean guys like Alan Rubin and Kaizad Hansotia don't grow any tobacco, yet at some point in the process cigars appear with their bands on them--ready to go out by the thousands often at exorbitant price points. So my question is: how do these expensive lines proliferate? I get the feeling the magnates walk into factories where they don't control production, try some offerings, then contract for as many boxes as they think they can sell. Am I close to the truth here, or way off base?
    Now I'm interested
  • rzamanrzaman Posts: 2,650 ✭✭✭
    LOL...Jesus if you have any specific question please send me a PM. Please remember that this is a commercial industry. I do not want to stir a controversy. I am a fact finder and I do this as hobby not to target any specific brand or any individual cigar maker. However I trust very few in the industry.
    big chunks:
    rzaman:
    You don't want to know the truth. Trust me it will hurt your feeling and your love about many top brands. That's all I can say for now.
    havanaal:
    Given the volume of different offerings of some high cigar brands, I'm curious how they come to market particular blends, especially when they don't seem to own facilities of their own. By that I mean guys like Alan Rubin and Kaizad Hansotia don't grow any tobacco, yet at some point in the process cigars appear with their bands on them--ready to go out by the thousands often at exorbitant price points. So my question is: how do these expensive lines proliferate? I get the feeling the magnates walk into factories where they don't control production, try some offerings, then contract for as many boxes as they think they can sell. Am I close to the truth here, or way off base?
    Now I'm interested
  • Lee.mcglynnLee.mcglynn HahahahaaaaaPosts: 5,961 ✭✭✭✭
    Rips actually correct! Some small batch stuff will hurt your feelings especially those that don't grow there own tobacco. Hint it's all about the buyer and the truck load of bundled tobacco...all bundles are the same price!
    Money can't buy taste
  • kuzi16kuzi16 Posts: 14,587 ✭✭✭
    Lee.mcglynn:
    Rips actually correct! Some small batch stuff will hurt your feelings especially those that don't grow there own tobacco. Hint it's all about the buyer and the truck load of bundled tobacco...all bundles are the same price!
    but there are many different types of tobacco in there. they usually buy the bundle for one specific tobacco and have to use it to make other "small batch" stuff.

    the other thing that will make most sad is the wholesale prices.most cigars are 1/3 of the MSRP.

    really shouldnt make people sad though. i mean its IS a business. they do need to employ people. there are unseen costs. and its not like every company ever doesnt do the same thing.
    im still willing to pay for it.
  • CigaryCigary Posts: 630
    rzaman:
    You don't want to know the truth. Trust me it will hurt your feeling and your love about many top brands. That's all I can say for now.
    havanaal:
    Given the volume of different offerings of some high cigar brands, I'm curious how they come to market particular blends, especially when they don't seem to own facilities of their own. By that I mean guys like Alan Rubin and Kaizad Hansotia don't grow any tobacco, yet at some point in the process cigars appear with their bands on them--ready to go out by the thousands often at exorbitant price points. So my question is: how do these expensive lines proliferate? I get the feeling the magnates walk into factories where they don't control production, try some offerings, then contract for as many boxes as they think they can sell. Am I close to the truth here, or way off base?
    Cigar insiders along with those who research product as you pointed out...will make you cringe as to how manufacturers and distribution will do things in their own marketplace...it will just leave you scratching your head but as was said...it's still a business and it's not about giving things away. You maximize everything within the potential of sales and getting as much as you can from every part of that business model. I know people who work within the industry around the world who tell me things I wish I didn't know because some of these companies I buy from are my favorites...but they aren't any better or worse than the next company in how they do business. Like any business I've ever worked in whether it be any product where you deal with shipping, production, waste and sales you do things in business that make you marketable and that makes money at the expense of grinding out product that you know to be sub standard as you can just take your waste materials and just throw it away...you sell it off to another business or keep it and use it yourself and brand it as XYZ with the Parent Company name that tend to say that this particular cigar is just as good as the Padron, Fuente, etc. product that is already made. Being a Plant Manager myself for decades shows me that when you can turn around your waste materials that is where your Profit and Loss column turns into a huge profit. Esp. when your product is something that already has a black eye with most people in the world...after all we're taking into our bodies something that isn't a bonus for us healthwise. I don't see outside agencies that are going to take the time to ensure that quality of cigars is at the top of their list. The only people that make a difference is the person who knows the product and has experience. What most cigar companys do is target the inexperienced or those who really don't know that much and then throw out some decent sticks in Samplers that will get a lot of attention and then sell a cheap box they call a humidor along with some $1 lighter and watch the masses go crazy buying them all for $29....this is why Thompsons sales go through the roof because they know their target audience.
  • havanaalhavanaal Posts: 152 ✭✭
    So, what you're saying Cigary, is that a cigar company will market whatever crap it can scape off the floor, put some bling on it, and make the consumer think they're getting something special? That's logical from a business perspective. As a consumer however, one has to be ever vigilant, trusting no brand, and carefully sampling every offering for value. That's probably as it should be.
  • kuzi16kuzi16 Posts: 14,587 ✭✭✭
    havanaal:
    So, what you're saying Cigary, is that a cigar company will market whatever crap it can scape off the floor, put some bling on it, and make the consumer think they're getting something special? That's logical from a business perspective. As a consumer however, one has to be ever vigilant, trusting no brand, and carefully sampling every offering for value. That's probably as it should be.
    a good example of this is SWAG
    the brand is all bling and no taste. It seems to be marketed to the early 20 somethings that want to look cool by smoking a cigar and not people who actually enjoy cigars.

    however, there are good people in the industry. there are also many many independent minds.

    the key here is to have an independent mind. smoke what tastes good and pay zero attention to marketing or what others say. i have actually been made fun of for not liking Padron, but i did not let that change my opinion about them.

    if you buy what you like and are willing to pay what it costs, then good.




    a little post script here...
    there are also indicators other than taste and visual design that contribute to cost. pay attention to quality. are AVO cigars expensive? hell yes. Have i ever been let down by the brand? nope. im guessing that this lack of disappointment isnt because AVO cuts corners and raises the price due to marketing.
    just be smart and dont buy into BS.
  • raisindotraisindot BostonPosts: 1,287 ✭✭✭
    Cigary:
    What most cigar companys do is target the inexperienced or those who really don't know that much and then throw out some decent sticks in Samplers that will get a lot of attention and then sell a cheap box they call a humidor along with some $1 lighter and watch the masses go crazy buying them all for $29....this is why Thompsons sales go through the roof because they know their target audience.


    Hey, hey, hey, hey, HEY!!! That's how I got into this money-sucking hobby. And my $29 sampler with the quite decent humidor and (mostly) very decent sticks was from C.com, not *cough*son. I doubt that I would have got into it any other way, since I wouldn't have any idea of what to buy and certainly wouldn't have to overpaid for a single car or a 5-er or box. And if at least a few of the cigars they included hadn't been good I wouldn't be spending far too much money on this hobby today. So give 'em credit. :)
  • CigaryCigary Posts: 630
    Lol....hey..we don't know what brought you to the party just glad you came. Your story is a lot like others where their start was from one of these kinds of stories and I admit to my getting a few of them when they actually sold some really good cigars only to be harassed by them later to sell me more. Now that I have a fictitious email address I never hear from them again...boo hoo.
  • raisindotraisindot BostonPosts: 1,287 ✭✭✭
    Cigary:
    Lol....hey..we don't know what brought you to the party just glad you came. Your story is a lot like others where their start was from one of these kinds of stories and I admit to my getting a few of them when they actually sold some really good cigars only to be harassed by them later to sell me more. Now that I have a fictitious email address I never hear from them again...boo hoo.


    Well, I admit that I am an absolute frickin' SUCKER for cigar company emails and catalogs (hell, I even read the "second of the month" c.com catalog that has essentially the same content as the first of the month). I get 'em from three of the biggie online cigar companies and auction houses (*cough*son is not one of them). Most of the time I ignore 'em because they're not offering anything I like but I never opt out of them.
  • CigaryCigary Posts: 630
    raisindot:
    Cigary:
    Lol....hey..we don't know what brought you to the party just glad you came. Your story is a lot like others where their start was from one of these kinds of stories and I admit to my getting a few of them when they actually sold some really good cigars only to be harassed by them later to sell me more. Now that I have a fictitious email address I never hear from them again...boo hoo.


    Well, I admit that I am an absolute frickin' SUCKER for cigar company emails and catalogs (hell, I even read the "second of the month" c.com catalog that has essentially the same content as the first of the month). I get 'em from three of the biggie online cigar companies and auction houses (*cough*son is not one of them). Most of the time I ignore 'em because they're not offering anything I like but I never opt out of them.
    I read a lot of stuff about cigars and am a member of CA and other places where I get their stuff. JR's has a nice magazine and I also receive stuff about Pipes as well...wine magazines are on the list and accessories as well. You could say that I'm on every list...even some $hit lists. lol
  • Darktower007Darktower007 Posts: 2,559 ✭✭✭
    Cigary:
    raisindot:
    Cigary:
    Lol....hey..we don't know what brought you to the party just glad you came. Your story is a lot like others where their start was from one of these kinds of stories and I admit to my getting a few of them when they actually sold some really good cigars only to be harassed by them later to sell me more. Now that I have a fictitious email address I never hear from them again...boo hoo.


    Well, I admit that I am an absolute frickin' SUCKER for cigar company emails and catalogs (hell, I even read the "second of the month" c.com catalog that has essentially the same content as the first of the month). I get 'em from three of the biggie online cigar companies and auction houses (*cough*son is not one of them). Most of the time I ignore 'em because they're not offering anything I like but I never opt out of them.
    I read a lot of stuff about cigars and am a member of CA and other places where I get their stuff. JR's has a nice magazine and I also receive stuff about Pipes as well...wine magazines are on the list and accessories as well. You could say that I'm on every list...even some $hit lists. lol
    So...in a way it's like the car industry. Most cars made are owned by large companies( or one making many models and brands) around the world, who then ship them to dealers who are owned by Guys/ Gals that own a BUNCH of dealers...selling cars. The little guys can't really get in due to conglomerates and brand recognition....unless they get bought out andparent keeps the name.
  • CigaryCigary Posts: 630
    Darktower007:
    Cigary:
    raisindot:
    Cigary:
    Lol....hey..we don't know what brought you to the party just glad you came. Your story is a lot like others where their start was from one of these kinds of stories and I admit to my getting a few of them when they actually sold some really good cigars only to be harassed by them later to sell me more. Now that I have a fictitious email address I never hear from them again...boo hoo.


    Well, I admit that I am an absolute frickin' SUCKER for cigar company emails and catalogs (hell, I even read the "second of the month" c.com catalog that has essentially the same content as the first of the month). I get 'em from three of the biggie online cigar companies and auction houses (*cough*son is not one of them). Most of the time I ignore 'em because they're not offering anything I like but I never opt out of them.
    I read a lot of stuff about cigars and am a member of CA and other places where I get their stuff. JR's has a nice magazine and I also receive stuff about Pipes as well...wine magazines are on the list and accessories as well. You could say that I'm on every list...even some $hit lists. lol
    So...in a way it's like the car industry. Most cars made are owned by large companies( or one making many models and brands) around the world, who then ship them to dealers who are owned by Guys/ Gals that own a BUNCH of dealers...selling cars. The little guys can't really get in due to conglomerates and brand recognition....unless they get bought out andparent keeps the name.
    For the small guy getting into the business of cigars is really tough....he's got to get his inventory from the Big Boys and at a price that they make the terms. For those who have been in business for decades they've already survived the hard stuff and have contracts with the best pricing. For the new guy he's facing so many hard things that it all feels uphill unless he's got a lot of money to get into this business...that's what it takes and it takes good ideas because you're not going to get rich off your inventory. You think outside the box and make money off liquor and memberships with nice furniture, big screens, hostesses who will cut your cigars and make you feel like you want to come back all the time. There are more tricks of the trade to stay in business but once you get one of the big boys from Manufacturers to bring the bus to your place they will see your business and that's when they give you better deals on inventory sales. I helped a guy in Massachusetts set up his place and it took a good year but he's making more money than he ever though possible because he thought outside the box and now the big Boys call him so they can do business with him...he sells a ton of cigars.
  • Darktower007Darktower007 Posts: 2,559 ✭✭✭
    Cigary:
    Darktower007:
    Cigary:
    raisindot:
    Cigary:
    Lol....hey..we don't know what brought you to the party just glad you came. Your story is a lot like others where their start was from one of these kinds of stories and I admit to my getting a few of them when they actually sold some really good cigars only to be harassed by them later to sell me more. Now that I have a fictitious email address I never hear from them again...boo hoo.


    Well, I admit that I am an absolute frickin' SUCKER for cigar company emails and catalogs (hell, I even read the "second of the month" c.com catalog that has essentially the same content as the first of the month). I get 'em from three of the biggie online cigar companies and auction houses (*cough*son is not one of them). Most of the time I ignore 'em because they're not offering anything I like but I never opt out of them.
    I read a lot of stuff about cigars and am a member of CA and other places where I get their stuff. JR's has a nice magazine and I also receive stuff about Pipes as well...wine magazines are on the list and accessories as well. You could say that I'm on every list...even some $hit lists. lol
    So...in a way it's like the car industry. Most cars made are owned by large companies( or one making many models and brands) around the world, who then ship them to dealers who are owned by Guys/ Gals that own a BUNCH of dealers...selling cars. The little guys can't really get in due to conglomerates and brand recognition....unless they get bought out andparent keeps the name.
    For the small guy getting into the business of cigars is really tough....he's got to get his inventory from the Big Boys and at a price that they make the terms. For those who have been in business for decades they've already survived the hard stuff and have contracts with the best pricing. For the new guy he's facing so many hard things that it all feels uphill unless he's got a lot of money to get into this business...that's what it takes and it takes good ideas because you're not going to get rich off your inventory. You think outside the box and make money off liquor and memberships with nice furniture, big screens, hostesses who will cut your cigars and make you feel like you want to come back all the time. There are more tricks of the trade to stay in business but once you get one of the big boys from Manufacturers to bring the bus to your place they will see your business and that's when they give you better deals on inventory sales. I helped a guy in Massachusetts set up his place and it took a good year but he's making more money than he ever though possible because he thought outside the box and now the big Boys call him so they can do business with him...he sells a ton of cigars.
    Man..I would love to open up a herf shop one day. Bad news is my closest B&M is Chattanooga at Burns Tobacconist and he has like one of three Davidoff Lounges in the US! So needless to say they're big time.
  • CigaryCigary Posts: 630
    I've thought about opening up my own place because I love the hobby and the kinship of those who come in and talk about ....what else...cigars and everything else in between. I've been retired for 20 years and I'm only 60 and could probably be successful at it...but I love to travel more so I did what any smart person would do...I travel and smoke my cigars and cut out the expensive part of the whole thing. Opening up BIG cigar places is so expensive and you have to have honest business partners who won't skim off the top. You can't be there all the time so it presents an issue...can you trust your managers and your business model and where you don't have to be there ALL the time? I love my time off and I love cigars so it becomes something about your greater love.
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