Habanos, S.A. is in celebration mode. The 50th anniversary of Cohiba, its flagship brand, is the talk of the town in
the realm of premium cigars and the basic motivation to boost up a highly-acclaimed 18-year-old festival. Here are the company’s co-presidents, Inocente Nuñez Blanco and Luis Sanchez-Harguindey Pardo De Vera, in their own words.
How is Cuban tobacco positioned in the world market right now?
IN: Habano is by far the most coveted and sought-after product among premium cigar smokers around the world. In this sense, our leadership at a global level is absolute, with the sole exception of the U.S. market, of course. Our market share right now is way over 70 percent in volume and 80 percent in values in those markets we sell to, and it’s more than 150 markets we’re talking about.
What are the major management successes and the main difficulties Habanos, S.A. had to cope with in the course of 2015?
LSH: Our main success is to see how our strategy, based on offering habano lovers unique proposals and experiences, renders in the steady growth of our sales worldwide, something that speaks volumes of the tremendous acclaim and demand for habanos. Overall, that demand remains high amid continuous regulatory policies and current situations of economic or political instability in some territories. As it has to be, we remain committed to innovation and take on the challenge to give smokers what they’re looking for. That entails a vast launch program every year that engulfs a good deal of brands and a broad variety of special productions.
As to the products launched in 2015, some highlights were the Montecristo 80 Aniversario, unveiled to mark the brand’s anniversary and featuring a unique vitola as far as size (ring gauge 55 x 165 mm long) and presentation are concerned; the first Grand Reserve 2009 Harvest of Romeo y Julieta in its emblematic Wide Churchills vitola, and the Special Edition on the 25th anniversary of La Casa del Habano, consisting of a humidor with two exclusive vitolas from the La Gloria Cubana habano brand: Pirámides and Robustos Extra. Moreover, we rolled out the 2015 Limited Editions, the H. Upmann Magnum 56, the Ramón Allones Club Allones and the Regional Editions.
IN: The difficulties are the ones derived from dealing with a delicate natural product whose outputs hinge considerably on the elements, which are so hard to manage. However, Habanos is working in coordination with the industry to minimize the impact of those external factors.
LSH: Finally, we must also underscore the successful continuation of our work to further spread out the habano culture, and in that sense we must praise the outstanding job done by the Habanos Academy, founded and developed by 27 distributors that reaches out to 87 markets. This has rendered in growth for some markets in the neighborhood of a 50 percent increase. Some 8,000 people have been trained in the Junior courses and approximately 3,000 have graduated from the Senior courses, and those are highly satisfactory numbers that show how important the joint efforts between Habanos S.A. and its distributors really are. On the other hand, the specialized sale outlets are on the rise. Especialistas Habanos has soared a solid 15 percent with over 830 outlets around the world, with major highlights for the Asia-Pacific Rim with a staggering 300 percent uptick. The Habanos Point has also grown in double digits (20 percent) with 1,800 outlets, and lastly, our La Casa del Habano franchise –the best example we have in terms of retail sales- boasts 140 establishments scattered in the five continents.
What are the growth perspectives for new markets that Habanos S.A. has in store right now?
LSH: Habanos S.A. has been working for years in the development of the so-called emerging markets, in an effort to both ramp up sales and spread the habano culture among customers and consumers, and the outcomes can’t get any better. We’re referring to markets in the Asia-Pacific Region, in the Middle East, as well as in Eastern Europe and Latin America. In the well-established markets, our goal is to keep the market share and maximize our business profitability.
Are there any real chances to enter the U.S. market in the short run?
IN: We don’t know and this is a topic we’re not concerned about and we don’t like to speculate about. This will undoubtedly open up a great opportunity because the U.S. accounts for approximately two thirds of the world’s premium cigar market. Logically, the business opportunity this could bring to our company is exciting to us.
Is there any chance to put up with the increasing demand for habanos in the world market and the opening of new markets?
IN: There is a chance and we’re confident about that. The industry has been working hard on this issue for a long time, increasing soil surface for tobacco plantations by preparing new fields and recovering former tobacco plantations. Efforts are also under way to develop new tobacco plantations in central Cuba to complement Vuelta Abajo, and investing in new farming for the planters. All this much is part of a development program that will also comprise the final manufacturing stage, by training cigar rollers and even making more room in the cigar factories.
What benefits do the Habano Festivals bring to Habanos S.A.? What are the new things in this year’s events?
LSH: The Habano Festival is a great celebration of this wonderful product called tobacco; it’s the gathering no premium cigar aficionado can pass up. But beyond that, it meets very concrete objectives: it’s the forum in which we present our main launches of the year, where attendees can puff on the latest products of the year, and it’s also a powerful tool to take a closer look at the product and the habano culture, especially for our distributors and their customers from all over the world.
IN: This festival is coming full of important new things. In 2016 we’ll be celebrating the 50th anniversary of the Cohiba brand, the most exclusive and luxurious brand in the world. To mark its birthday, there’ll be a couple of exclusive special editions, and one of them promises to be the rollout of the most luxurious and special premium cigar ever launched: the Cohiba 50 Aniversario, whereby Habanos S.A. is unveiling the first ring gauge 60 of its history. Also within the Linea 1492, we’ll be launching the Cohiba Medio Siglo, in a shortened format that’s been catching on lately. The Festival’s closing Gala Night will be entirely devoted to Cohiba. Cohiba is more than a brand; it’s a symbol, and the Festival is going to pay the tribute this brand deserves.
In the same breath, we’ll be presenting Hoyo de Monterrey Reserva 2012, with the Epicure No.2 vitola, the star of the opening night. There’ll also be a special commemorative edition for the La Casa del Habano with the Cuaba brand, that’s turning 20 years old in 2016.
We’ll also present the new and much-anticipated H. Upmann Magnum 54, plus this year’s Limited Editions: Montecristo Dantés, Romeo y Julieta Capuletos and Trinidad Topes.
LSH: In addition to all these new products, the Festival will once again be full of activities and initiatives around the habano –over 30 of them in all- during the course of five intense days and nights. As a matter of fact, we’re talking about the world’s largest event dedicated to premium cigars.
You’ve just said it, but how important is for both Habanos S.A. and its distributors the Limited Editions and other specialties in the sales of habanos?
LSH: Consumers of premium cigars love new things. They keep waiting and wishing to be surprised each year, and in that sense it’s our obligation to meet that demand our customers have. On the other hand, it’s in the DNA of Habanos S.A. to have an innovative spirit that truly makes a difference, one that has helped us to develop absolutely new concepts that are now entrenched and highly widespread in the premium cigar market, such as the Limited Editions the Reserve and Grand Reserve or the Regional Editions. A considerable chunk of our sales stems from those specialties, therefore it’s in our best interest to continue innovating in different concepts and proposals, such as Habanos Añejados, of which we’ve just put two new products in the market: Partagás Coronas Gordas Añejados and Hoyo de Monterrey Hermosos No.4.
What are those new things Habanos S.A. has in store? Will there be new brands or lines in the near future?
IN: As we said at the top of this interview, if there’s something that truly characterizes Habanos S.A. is its innovative ability. There’ll be no doubt new things and surprises in the short and not so short run, not exactly the launch of new brands because our portfolio already boasts 27 different brands. That makes it quite deep, but there’ll be new products, lines and concepts coming up.
The Habano Festival is a great celebration of this wonderful product called tobacco; it’s the gathering no premium cigar aficionado can pass up