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June
2003

Cigar Imports Nudge Upward

The industry saw a modest rise in premium cigar imports in 2002, while key supplier nations jockeyed for U.S. market share.

by E. Edward Hoyt III, Editor

Following a barely perceptible rise in imports to the U.S. in 2001 (.84%), shipments of premium cigars picked up a bit of momentum in 2002, posting a respectable 4.78% gain over 2001 for a total of 264.6 million sticks. The information is based on the Cigar Association of America's short list of key supplier nations, which accounted for 99% of all premium cigar imports. In all, 267.5 million premium cigars were imported from 26 nations in 2002.

While the overall balance of imports changed minimally, trends among supplier nations told an ongoing story of rising and falling influence in the premium cigar market in the U.S.

The dominant supplier country, the Dominican Republic, accounted for 56.8% of all premium cigar imports into the U.S. or 151.6 million sticks, a 3.5% rise over 2001. Imports of Honduran premium cigars remained essentially unchanged last year at 69.1 million sticks, or 25.9% of category imports, and overall the nation remained in a solid second place in the U.S. market.

Third place Nicaragua, however, continued to gain significant momentum, shipping 37.7 million sticks in 2002, compared to 27.4 million in 2001, an increase of 37.5%. Since 1999, Nicaragua's premium cigar shipments to the U.S. have grown by 95%.

Mexico, which ranked 4th in imports both in 2002 and 2001, saw premium cigar volumes to the U.S. drop by 28.6% last year, to 2.73 million sticks from 3.82 million previously. Fifth place Indonesia, meanwhile, saw exports soar 371%, from 541,000 sticks in 2001 to 2.56 million last year, approaching its peak volume year of 1998, in which it shipped 2.78 million sticks into the states. In all, the top five supplier nations accounted for 98% of premium imports.

Rounding out the top ten were Switzerland in sixth place - which saw shipments fall by 22.2% last year to 748,000 sticks - followed by the Bahamas at 434,000 sticks and the Philippines, dipping 7% to 369,000, in eighth place. Ecuadorian shipments to the U.S. grew by 119% to 341,000 sticks; and Italy, which began distributing brands in earnest last year, saw shipments jump from 9,000 in 2001 to 317,000 sticks last year.

A total of 16 supplier nations accounted for the remaining .37% of premium imports, or 993,000 sticks, which included several formerly significant players in the U.S. market.

Supplier nations which saw significant declines in U.S. shipment volumes last year included Costa Rica, which held the number six position in 2001 but saw shipments tumble 97% to a mere 41,000 sticks last year. The tumble was due primarily to Tabacalera Tambor's move to a new factory in Nicaragua, which produces the Bahia brand as well as Bucanero and Hoja. Tambor was Costa Rica's leading cigar-making operation.

Similarly, Jamaica's shipments fell by 99% as General Cigar Co. completed its phase-out of production on that island in favor of its Dominican Republic operations, which primarily involved specific Macanudo frontmarks. Jamaica, which had ranked number four in the U.S. premium cigar market as recently as 2000 and for years held the number three spot, fell to eighth place in 2001 and to number 21 last year, shipping only 10,000 sticks.

The Canary Islands (Spain), which held a fifth-place ranking in 2001, also saw shipments plunge last year, posting a 93% decline to 153,000 sticks and a 14th place ranking, down from 2.12 million sticks in 2001.

Among the CAA's ten key supplier countries (Canary Islands, Costa Rica, Dominican Republic, Honduras, Indonesia, Jamaica, Mexico, Nicaragua, Panama, and the Philippine Republic), the average declared value of a premium cigar rose to 81.1 in 2002, compared to 77 in 2001.

Consumption imports of large, non-premium cigars fell from 236.6 million units in 2001 to 193.0 million units in 2002, a decrease of 18%. The average declared value per cigar rose from 13 to 15.

Little Cigars Show Big Growth
Consumption imports of little cigars to the United States jumped 39.9% to 95.1 million units in 2002, up from 67.98 million units in 2001.

Honduras remained the leading supplier nation of little cigars to the U.S. last year, shipping 22.4 million sticks, followed by the Philippines at 21.8 million units; Brazil with 16.8 million, and the Netherlands with 13.7 million. These four countries accounted for 78% of all little cigar shipments. Belgium (4.78 million units), Germany (3.92 million units), and Ireland (3.34 million units) led the remaining origin countries in U.S. shipments.

The total declared value of all small cigar imports for domestic consumption in the U.S. totaled $3.85 million, up from $2.84 million in 2001.


SMOKESHOP - June, 2003