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Spring, 2007

The Quintessence from the IX Festival del Habano
by Reinhold C. Widmayer

The Gran Canaria conference hall in the chic Melia Cohiba Hotel in Havana was already crowded when I entered punctually at 10 a.m. after only a few hours of sleep. Several dozen journalists from each corner of the globe had already taken their seats, put their cameras and microphones in place, and lit their cigars (Montecristo No. 4) which were handed to us at the registration desk.

The first morning of the week-long Festival del Habano is usually a rough awakening, preceded by a long journey (I had flown in from Vienna, Austria), several mojitos on the patio at Hotel Nacional, and endless conversations with friends from everywhere before taking a rest... But, I had made it in time for the news briefing. Manuel Garcia and and Javier Terrez, vice presidents for Habanos S.A., along with Enrique Babot, marketing director at Habanos as well as other high officials were about to introduce their newest products.

Naturally, Maduro 5, the new line to be added to the Cohiba brand, drew the focus of the reporters interest. "Can we see the new cigars?" I asked. Indeed, we got to see them, but only from photos on a screen. "The actual products will be presented officially at the Welcome Party tonight," was the short reply... that's the Cuban way of communication. Maduro 5 will compliment the Clásica and 1492 (Siglo) lines. The new line uses dark wrapper [capa madura] from the upper leaves of the plant and obtains its characteristic range of dark colors and texture through a long, complex process of fully natural fermentation and five years of aging. The three sizes [vitolas] are named Genios (5 1/2 x 52), Mágicos (4 1/2 x 52) and Secretos (3 15/16 x 40 according to Habanos S.A.-whereas all samples I could get a hold on, measured 4 1/8 x 40). These rather short formats are in line with the latest market trends-mainly in Europe-towards shorter smokes. The traditional Cohiba ring band has been extended with a lower black stripe with golden letters "Maduro 5." Also, the wooden boxes are darker in color compaired to the Clásica and Siglo lines. According to Sen. Rafael Collazo Cabrera, who is the successor of Osmar Hernández Fuentes as director of the famous El Laguito factory, production of the Maduros has started in December 2006 and they should be ready for shipping by late spring, early summer. "Initially, we were thinking of producing the Maduro line with small pigtail ends," says Collazo. But then Habanos decided to leave them round like normal Cohibas.

1 Billion Montecristos Sold

The second major launch of the year, Reserva de Montecristo, pays tribute to Montecristo No. 4, which is the best selling vitola (5 x 42) of the brand. It is commonly known that Montecristo is the most popular factory name in the history of Cuban cigars, with 1 bn cigars sold since its launch in 1935. Reserva de Montecristo follow the Reserva de Partagás sold two years ago. The new No. 4 is made with tobacco aged for three years. The cigars are packaged in luxury black-lacquered cases of 20 double banded cigars. Only 5,000 numbered cases will be sold starting this fall. Miguel Brown, the manager of the H. Upmann factory where the cigars are rolled, says: "We are committed to quality and all of us at the factory are very proud to be involved in this prestigious project." The 1,000 or so attendees of the gala dinner event in Havana all got one piece of the Reserva de Montecristo.

More launchings in 2007
At the news conference, also the Edicion Limitada line-up for 2007 was confirmed, with three cigars: Romeo y Julieta Escudos (5 1/2 x 50), Regalos from Hoyo de Monterrey (5 x 46), and the Trinidad Ingenios (6 1/2 x 42).

Exclusively for sale in the franchised Casa del Habano-shops worldwide, a replica from an ancient humidor from the Partagás factory will be issued in 2007. According to the original owner, the piece was sold in the first decade of the 20th century. The 200 replicas will contain 50 Sobresalientes (6 x 53) produced solely for this special series.

Volume No. 7 of the Habanos Collection, a series of book-style humidors, is dedicated to the H. Upmann brand. The case will contain 20 sticks of the Magnum Especial (6 3/4 x 55), manufactured for this series only. 500 boxes/books will be made.

Step by step, all tubes carrying Habanos will be re-designed, starting with the Churchill size of Romeo y Julieta, Corona Major, and Corona Junior from H. Upmann and Edmundo from Montecristo. And a much larger of number of cigars will be marketed in tubos in the future.

Finally, Habanos S.A. has selected the following nine markets for their 2007 Regional Editions [also, see our DI report in issue January, 2007].

  • Middle East: Bolívar, Double Coronas (7 5/8 x 49)
  • Canada: Bolívar, Simones (5 x 48)
  • Asia/Pacific: Por Larrańaga, Robustos de Larrańaga (4 7/8 x 50)
  • United Kingdom: Por Larrańaga, Magnifico (6 3/4 x 50)
  • Benelux: Ramón Allones, Specially Selected Gran Robusto (6 1/8 x 50)
  • Baltic Region: Rey del Mundo, Vikingos (5 1/2 x 50)
  • Spain: Vegas Robaina, Maestros (5 1/2 x 50)
  • Switzerland: Punch, Robustos (4 7/8 x 50) and Ramón Allones Eminencias (5 5/8 x 44).
  • Mexico: Edmundo Dantes, El conde 109 (7 1/4 x 50)
The Status Quo of Cuban cigars in the world market

"Habanos S.A. currently markets a range of 240 formats under its premium brands, reported Manuel Garcia. He also told DI some details about the status quo of Habanos S.A. in the world market: "Our turnover from cigar sales at the end of the year 2006 was more than $370 mn, up 8% from 2005. The company's market share in sticks-excluding the US market-stands at 73%, up 4 points from last year's 69%," Garcia noted.

Western Europe remains to be the biggest market for Cuban cigars counting for 61% of the total export value. Sales to Latin America reached 12% in 2006, followed by the Middle East (9%), Asia (8%), Eastern Europe (4%) North America/Canada (3%) and Africa (2%). South Africa, Tunesia, and Marocco are the strongest growing markets on the African continent, where sales rose by 45% within the past year.

Within the wide portfolio of premium cigars from Cuba, Montecristo is still the biggest selling brand-it accounts for 23% in volume and 29% in value of all sales. Cohiba is number two, accounting for 11% of sold units and 20% of the monetary turnover, to be followed by Partagás (11.8 and 12.4%), Romeo y Julieta (15 and 12%), Hoyo de Monterrey, Trinidad, J. L. Piedra, H. Upmann, Bolívar, Punch, Quintero, and Ramón Allones.

Manuel Garcia told participants at the festival that the number of Casa del Habano shops around had reached 115 at the end of February 2007. Well, at the time of print of this issue there were six new stores opened, among them Casas in Cairo, Costa Rica, and Hamburg. Ignacio Balmaseda, who is in charge of the franchise department is planning to open a total of 35 more shops during this year, seven of which are projected for Europe, 22 in the Americas (including two in Canada), three in the Middle East, and three in Asia.

The 9th Festival del Habano was a busy event filled with social gatherings and 1,300 attendees in total. As always, the highlight was the auction of a few specially-made humidors at the final gala: A record was set for a Cohiba humidor. It sold for 270,000 euros (about $354,000). Altadis S.A.'s cigar division, which owns half of Habanos S.A., bought the lot. The auction total acceeded 533,000 euros ($703,000). The proceeds go to Cuba's public health system. This was down almost 13% from the 2006 auction, but this year's models were not signed by the ailing Fidel Castro.

Distribution International - Spring, 2007
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