certain parts of the body come to mind before others. A sturdy jaw is one, as in Arnold Schwarzenegger’s toothy grin clamping down on a big smoke. The fist is another—Tony Soprano’s hairy paw clutching a cigar as he cruises down the New Jersey turnpike comes to mind. Brains, however, tend to be relegated to the latter, non-cigar-affiliated camp. Nevertheless, it’s brains that distinguish Cigar Tower as a destination retail experience for anyone traveling to Budapest.
The faces of Cigar Tower are Csaba Csetényi and Tibor Krsko, globetrotting executives from the media industry. Back in the early days of Hungary’s transformation, the pair of entrepreneurs found themselves in high demand from like-minded aficionados in Budapest struggling to secure supply in a city that lacked an outlet for premium cigars. This led them to open the first high-end cigar shop in Budapest ten years ago. The business has since expanded to include a wholesale business; a network of partners, both in the retail and the HORECA (hotel, restaurant, and café) realms, and with media outlets including several lifestyle magazines; and a website devoted solely to cigars.
The project manager behind Cigar Tower’s website (www.cigartower.com) and Cigar Register, the software which drives the virtual humidor (downloadable free on the website) is Peter Agardi. Peter is an eager cigar enthusiast. “I became captivated by the art and culture of cigar smoking and decided to dig deeper into the cigar culture.” That led Agardi to develop a website devoted to the issue. After that, it was natural to try to contact the entrepreneurs behind the Cigar Tower concept. From there, Agardi’s talents as web and software designer have been fully leveraged by Cigar Tower. Agardi is not a mere techie who sits in a server room manning a website. He often goes to the various clubs and venues to present the Cigar Tower rating system.
The shop itself is unique and stylish. Adjoining the five-star Kempinski hotel in the heart of Budapest, it is literally a tower. On the bottom floor (25 m2) you can find a well–displayed selection of cigars, pipes, cigarillos, and cigarettes as well as an excellent selection of equipment including humidors, cutters, and specialized lighters and ashtrays. These include everyday accessories as well as exclusive cigar-related products such as hand-made humidors (from m1,000); Mastro de Paja selected humidors; Davidoff & S.T. Dupont luxury accessories (cutters from m350, humidors from m1,480); and Sillem’s pipes (from m260). Cigar Tower also handles special requests, for example if a customer requires a humidor cabinet or other special product they are happy to assist. A limited selection of high-end whisky and other alcohol is also available.
The second floor features the walk-in humidor housing about 5,000 sticks, representing 41 premium brands. Two separate automatic humidifiers keep the relative humidity stable. Top-selling brands in terms of revenue are typically the Cubans, but in terms of volume, Dominican brands lead the way. “Our customers appreciate what a premium cigar means so the Cubans are very popular, but in terms of ‘bang for the buck,’ what Dominicans provide is certainly not overlooked, particularly for every day smoking.”
The staff at Cigar Tower is definitely one of its strong points. Both knowledgeable and enthusiastic, the 12 staff members are clearly passionate about what they do. Staff training is thorough and includes in-house seminars, reading external material, plus the shop’s own manual, and one-on-one mentoring. “This enables our staff to answer customer’s questions and ask the right questions themselves to ensure customers can get what they’re looking for,” explains Agardi. The typical employee has been with the company for about seven years—a strong endorsement for the way the business is run considering the typical lifespan of workers in the retail industry.
Perhaps the biggest downside to the shop is its prices. Due to the high excise taxes on alcohol and tobacco in Hungary, prices in Budapest are about double what one might find in neighboring Austria and Slovakia. For example the Cohiba Siglo VI retails at the shop for about m56, while the Montecristo No. 2 goes for around m25. For this reason Cigar Tower plans for franchising the store concept have not panned out according to the original idea. These days Cigar Tower partners with independent shops it supplies from its warehouse and wholesale business, which sits across the river on the Buda side of the city.
The most important distribution point for Cigar Tower is its partnerships with restaurants, bars, cafés, and cigar clubs where they are adding about 50 partners a year. In this regard, the business is very customer focused with a customer care program providing restaurant staff with a free humidor, basic training in the management and upkeep of their customers’ collections, and periodic adjustments and tune-ups on their biweekly visits to ensure the humidor is in working order. The Cigar Tower also gives presentations to a number of cigar clubs around Budapest where they typically maintain a cigar corner. They school their customers on the finer points of their selection and explain the inner workings of their proprietary rating system.
In terms of cigar culture in Hungary, Budapest offers a range of outlets for enthusiasts. These stretch from the very exclusive and very serious to the more casual and laid back. “The exclusive clubs typically require recommendations from at least two members and some even have their own special suits to wear when they meet,” says Agardi. This end of the spectrum tends to be dominated by business people and restaurant owners. At the other end, virtual clubs come together over the internet to discuss and will meet on a regular basis, typically at a rotating venue, and compare notes on the latest selections that come to Budapest.
In terms of the market itself, Cigar Tower is the leading player in Budapest, selling about 400,000 sticks annually. The competition is limited with two other major players, one of which is losing share in the marketplace and the other one holding steady. At the end of the day however, the ethos that drives Cigar Tower it is not necessarily commercial sensibility (which is constrained by the Hungarian tax regime), but the passion for high quality cigars and like-minded people with whom to share the experience of a good smoke.