How Cuban cigars are making a mark in the global market
Cuba’s legendary cigars have clocked record sales in 2017, thanks largely to Chinese consumption. As manufacturers try to conquer new markets with smoker accessories, there are even academies to teach the art of cigar smoking.Updated: Mar 04, 2018 09:16 IST
When they rip the big green leaves from the tobacco plant, Cuban farmers know they’re touching gold. The island nation’s legendary cigars have closed another year for the record books, in large part thanks to Chinese consumption.
“This tobacco makes the Chinese cry with joy,” said Fernando Hernandez, a 50-year-old farmer who manages the harvest in the prime growing area in and around Pinar del Rio, in western Cuba, 160 kilometers (100 miles) from the capital Havana. China, now the world’s first biggest consumer of Cuban cigars behind France and Spain, is driving demand.
In 2017, a year in which the luxury market overall grew by five percent, cigar sales rose a stunning 12% worldwide, for a record $500 million, according to Bain & Company. Chinese sales alone went up 24%. “China has demand that we need to fulfil, and we can count on double-digit growth for years to come,” Jose Maria Lopez Inchaurbe, vice president of development of Habanos S.A., said during the opening of Cuba’s annual cigar festival in Havana.
The cigars are sold in humidors that can fetch more than $1 million at auction. But behind the pricy pastime is the work of the farmers who harvest the leaves at the start of each year. “This year is not bad, but it is not the best of all years. It rained last year and now it’s not raining, so the tobacco is not getting refreshed. Rain is the plant’s medicine,” said Lazaro Lazo, 48, who has worked the tobacco fields for two decades.
US embargo still looms large
For Hernandez, “this is the best tobacco in the world, because of the soil.” “The red earth of Pinar del Rio is the best, but resources are scarce” because of the US trade embargo in place for more than half a century. Without the embargo, “there would be more production,” he said.
Cuban cigars are exported by Habanos S.A., a 50-50 joint venture between the Cuban state and Spain’s Altadis, a firm owned by Imperial Tobacco Group of Britain. Because of the embargo Washington has applied to the communist-ruled island since 1962, the cigars cannot be exported to the lucrative US market, although Americans travelling to Cuba can bring some home. Cubans still bristle at the fact that in 1962, then president John F Kennedy ordered a top aide to buy him 1,000 cigars. Once the cigars were in his office, Kennedy signed the embargo into law.
“When this embargo is lifted, we will know what to do to sell to the North American market,” said Habanos vice president of sales Leopoldo Cintra. For now, European countries receive 54% of Cuban cigar exports, followed by countries in Latin America (17%) and the Asia-Pacific region (15%). In a sign of the changing times, a Chinese stand offered smoker accessories at the cigar festival in Havana. “The cigar is to the gentleman what the perfume is to the lady,” read one of the stand’s slogans.
In order to conquer new markets, Habanos created an “academy” to teach newcomers the art of cigar smoking. “In 2016 alone, we trained 11,000 (new) consumers in the world,” said Lopez. In the fields of Pinar del Rio, once tobacco leaves are harvested, they are taken to a rustic cabin where women string together leaves through their stems with a needle and thread and hang them to dry. Later, the cigars are rolled.
“I am glad to be part of this business, but we do a lot and don’t see much of a result,” complained 51-year-old Cristina Valdes, who has spent 30 years in the tobacco fields. The cigar business employs some 1,30,000 people in Cuba, an island of 11 million. Alberto Pruna, 69, started when he was just nine years old. “Yes, we are paid well,” he said, noting that before Fidel Castro came to power, “we were working almost for free.”
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