Cigar news: The sale of Thompson Cigars to the Scandinavian Tobacco Group has created quite the stir in the trenches of cigar businesses. Dire warnings of the demise of B and M’s throughout the country are being talked about as large corporations are buying up catalogue companies.
According to one blogger , Charlie Minato of the well-respected cigar site Half Wheel states:
“Most estimates suggest that the majority—likely a bit less than 65 percent—of cigar sales now happen through the major online/catalog retailers. It should be noted, a lot of these transactions are done in stores that companies like Cigars International, Famous Smoke Shop, JR Cigar, Holt’s, Thompson Cigar and others operate. But the important takeaway is that most cigars are no longer sold through a local mom-and-pop tobacconist.
One of those major retailers estimates that Thompson Cigar accounted for around 6 percent of total cigar sales in America. Now that 6 percent of sales is controlled by STG, which is also the company that sells your local cigar store Macanudos, Cohibas, Partagas, CAOs and others. Most problematically, it means that STG as a whole now controls over 20 percent of the total U.S. retail cigar market.
If you are an independent cigar store in Anytown U.S.A., that’s not good and it’s not going to get any better.”
Awhile back I had a conversation with David Weiss, the owner of the Lone Wolf Cigar Lounge where I am a member about the future of B and M’s , the challenges they face with the evil FDA, local government influence and what cigars they offered.
For the total interview it is on my website, Urbanfishingpolecigars.com. Here are the salient points he was making.
He sells cigars that he knows that he can sell. Where he buys them is part of doing business so if he needs to work with vendors such as General Cigar he will.
Boutique cigars while popular in some circles, are challenging to sell as distribution , availability of the product and the price impacts his business.
His customer base is primary local and they buy from him because they like the service, his attention to detail and knowing what they like to smoke. He is aware the catalogue companies may offer better prices but not better service.
Charlie Minato makes some valid points. He further states,” just as a typical brick and mortar store might be conflicted about whether it should continue buying Macanudos and Montecristos, knowing that it ultimately helps companies that also own Cigars International and JR Cigar.”
How this all ties in for the future of the cigar business remains to be seen. The movers and shakers need to develop a blue print for all the pieces of the cigar industry. If the small operator’s fail because the large manufacturers and retailers make it too difficult for them to continue, it does not help anyone who cares about cigars.
The consumer must make it clear they are not going to support a takeover by the big boys. Smoking cigars remains a way to sit down, relax and hang with your friends. Buying cigars on-line is an option but then what?
Smoking in the streets , or a man cave is not the answer. Manufacturers and dealers better figure this out now. Cigar smoking is based on enjoyment and the experience of smoking with your buddies and meeting new people. You need to make a buck but killing part of the business is not the solution.