Cigar boom
Encyclopedia
The Cigar Boom is the name given to the resurgence of cigar
consumption in the United States during the years of the middle 1990s. Beginning in 1992, imports and sales of premium cigars began to rise dramatically and manufacturers struggled to keep up with demand, leading to industry-wide shortages of raw materials and finished products. The period was marked and the trend accelerated with the 1992 establishment of Cigar Aficionado
magazine. By 1997, production caught up with demand and the downward side of the cycle of boom and bust
began to make itself felt, leading to a shakeout of many of the smaller and weaker upstart manufacturers of boutique
premium cigars.
farmers and brokers and cigar manufacturers to plan for future production. Since cigar tobacco requires an extensive preparation process, including stripping, sorting, aging, and fermentation
, dramatic changes in the level of output required two or three years of advance time.
Stable consumer demand allowed companies to safely plan for the needs of the marketplace but the nature of the industry did not allow for rapid expansion of production. Cigar industry veteran Lew Rothman later recalled that
The end of 1992 also saw the establishment of a new publication, credited by some with spurring the cigar boom of the 1990s. Cigar Aficionado
magazine, a glossy monthly publication, helped to legitimize the idea that cigars were not a vile relic of a by-gone century and helped to foster an epicurean attitude towards hand-crafted tobacco products. Over the years a number of important celebrities revealed themselves to be cigar connoisseurs in its pages, including television's William Shatner
and radio's Rush Limbaugh
.
Many upstart companies began in the 1990s in an attempt to meet blossoming demand, with long-term survivors including Tabacalera Perdomo (established 1992), Oliva Cigar Co.
(established 1995), and Rocky Patel
(established mid-1990s).
This period also saw the growth of parallel grass roots industries, such as independent record labels which serviced the punk rock
boom, premium coffee
houses powered by the rapid expansion of Starbucks
, and microbreweries which produced special varieties of beer
. The rapid expansion of demand for and manufacture of hand-crafted cigars may be seen as part and parcel of this broad consumer trend which sought specialized craft products over generic mass-produced goods.
The next year saw a further 12 percent gain in the number of imported cigars into the American market, to 132.4 million pieces. This was followed by an astounding 33 percent gain in 1995, with 176.3 million cigars imported into the country in that year. This trend further accelerated during the first part of 1996, with yet another 36 percent gain posted in the first quarter of that year.
Due to the nearly 2 year turnaround between tobacco seed and the finished product, production was for a time unable to keep up with the new fad-like
demand for premium cigars, resulting in widespread backorders and rising prices.
Lew Rothman later remembered the extraordinary situation in these years:
problems. The bust which swept the industry continued for a period of two years, a shakedown which resulted in the death of many fledgling companies.
Many of the manufacturers who survived the downturn of the industry, generally basing their production in the Dominican Republic
, Nicaragua
, or Honduras
, were able to reestablish themselves through the marketing of new and innovative shapes and sizes. Traditional ring gauges were de-emphasized in favor of thicker and longer products, a trend which has continued into the cigar market of the 21st century.
Cigar
A cigar is a tightly-rolled bundle of dried and fermented tobacco that is ignited so that its smoke may be drawn into the mouth. Cigar tobacco is grown in significant quantities in Brazil, Cameroon, Cuba, the Dominican Republic, Honduras, Indonesia, Mexico, Nicaragua, Philippines, and the Eastern...
consumption in the United States during the years of the middle 1990s. Beginning in 1992, imports and sales of premium cigars began to rise dramatically and manufacturers struggled to keep up with demand, leading to industry-wide shortages of raw materials and finished products. The period was marked and the trend accelerated with the 1992 establishment of Cigar Aficionado
Cigar Aficionado
Cigar Aficionado is an American magazine that is dedicated to the world of cigars. Published since September 1992, the magazine is known for its articles about different brands of cigars worldwide, and for the celebrities that have appeared on its cover. It is also noted for its opposition to the...
magazine. By 1997, production caught up with demand and the downward side of the cycle of boom and bust
Boom and bust
A credit boom-bust cycle is an episode characterized by a sustained increase in several economics indicators followed by a sharp and rapid contraction. Commonly the boom is driven by a rapid expansion of credit to the private sector accompanied with rising prices of commodities and stock market index...
began to make itself felt, leading to a shakeout of many of the smaller and weaker upstart manufacturers of boutique
Boutique
A boutique is a small shopping outlet, especially one that specializes in elite and fashionable items such as clothing and jewelry. The word is French for "shop", via Latin from Greek ἀποθήκη , "storehouse"....
premium cigars.
American cigar demand in the 1980s
Throughout the decade of the 1980s, imports of handmade cigars into the United States remained stagnant at about 100 million cigars per year. The lengthy plateau in consumer demand allowed tobaccoTobacco
Tobacco is an agricultural product processed from the leaves of plants in the genus Nicotiana. It can be consumed, used as a pesticide and, in the form of nicotine tartrate, used in some medicines...
farmers and brokers and cigar manufacturers to plan for future production. Since cigar tobacco requires an extensive preparation process, including stripping, sorting, aging, and fermentation
Fermentation (biochemistry)
Fermentation is the process of extracting energy from the oxidation of organic compounds, such as carbohydrates, using an endogenous electron acceptor, which is usually an organic compound. In contrast, respiration is where electrons are donated to an exogenous electron acceptor, such as oxygen,...
, dramatic changes in the level of output required two or three years of advance time.
Stable consumer demand allowed companies to safely plan for the needs of the marketplace but the nature of the industry did not allow for rapid expansion of production. Cigar industry veteran Lew Rothman later recalled that
"Because there was only a finite number of potential customers and a fairly predictable demand for premium cigars, the quantity of tobacco planted to supply that demand, and the price for those wrappers, binders, and filler leaves, remained very constant throughout the 1980s and into the '90s. Basically, there were no new farmers, brokers, or factories for the product, and it was 'the same old, same old' for over a decade."
The 1992 revival
In the 4th Quarter of 1992, the long-term decline in the importation of cigars began to show signs of being reversed, as quantities increased by 4% over previous year totals.The end of 1992 also saw the establishment of a new publication, credited by some with spurring the cigar boom of the 1990s. Cigar Aficionado
Cigar Aficionado
Cigar Aficionado is an American magazine that is dedicated to the world of cigars. Published since September 1992, the magazine is known for its articles about different brands of cigars worldwide, and for the celebrities that have appeared on its cover. It is also noted for its opposition to the...
magazine, a glossy monthly publication, helped to legitimize the idea that cigars were not a vile relic of a by-gone century and helped to foster an epicurean attitude towards hand-crafted tobacco products. Over the years a number of important celebrities revealed themselves to be cigar connoisseurs in its pages, including television's William Shatner
William Shatner
William Alan Shatner is a Canadian actor, musician, recording artist, and author. He gained worldwide fame and became a cultural icon for his portrayal of James T...
and radio's Rush Limbaugh
Rush Limbaugh
Rush Hudson Limbaugh III is an American radio talk show host, conservative political commentator, and an opinion leader in American conservatism. He hosts The Rush Limbaugh Show which is aired throughout the U.S. on Premiere Radio Networks and is the highest-rated talk-radio program in the United...
.
Many upstart companies began in the 1990s in an attempt to meet blossoming demand, with long-term survivors including Tabacalera Perdomo (established 1992), Oliva Cigar Co.
Oliva Cigar Co.
Oliva Cigar Co. the manufacturer of several brands of cigars primarily grown and produced in Nicaragua and sold worldwide. The family-owned company traces its roots to patriarch Melanio Oliva, who began growing tobacco in Pinar del Río, Cuba in 1886...
(established 1995), and Rocky Patel
Rocky Patel Premium Cigars
The Rocky Patel Premium Cigar Company is a manufacturer of cigars, founded by Rakesh "Rocky" Patel. The company is currently based in Naples, Florida.-History:...
(established mid-1990s).
This period also saw the growth of parallel grass roots industries, such as independent record labels which serviced the punk rock
Punk rock
Punk rock is a rock music genre that developed between 1974 and 1976 in the United States, the United Kingdom, and Australia. Rooted in garage rock and other forms of what is now known as protopunk music, punk rock bands eschewed perceived excesses of mainstream 1970s rock...
boom, premium coffee
Coffee
Coffee is a brewed beverage with a dark,init brooo acidic flavor prepared from the roasted seeds of the coffee plant, colloquially called coffee beans. The beans are found in coffee cherries, which grow on trees cultivated in over 70 countries, primarily in equatorial Latin America, Southeast Asia,...
houses powered by the rapid expansion of Starbucks
Starbucks
Starbucks Corporation is an international coffee and coffeehouse chain based in Seattle, Washington. Starbucks is the largest coffeehouse company in the world, with 17,009 stores in 55 countries, including over 11,000 in the United States, over 1,000 in Canada, over 700 in the United Kingdom, and...
, and microbreweries which produced special varieties of beer
Beer
Beer is the world's most widely consumed andprobably oldest alcoholic beverage; it is the third most popular drink overall, after water and tea. It is produced by the brewing and fermentation of sugars, mainly derived from malted cereal grains, most commonly malted barley and malted wheat...
. The rapid expansion of demand for and manufacture of hand-crafted cigars may be seen as part and parcel of this broad consumer trend which sought specialized craft products over generic mass-produced goods.
The boom at zenith
The year 1993 saw the first significant increase in cigar imports to the United States in more than a decade, with a total of 117.8 million cigars brought into the country, an increase of about 10 percent over the previous year's totals.The next year saw a further 12 percent gain in the number of imported cigars into the American market, to 132.4 million pieces. This was followed by an astounding 33 percent gain in 1995, with 176.3 million cigars imported into the country in that year. This trend further accelerated during the first part of 1996, with yet another 36 percent gain posted in the first quarter of that year.
Due to the nearly 2 year turnaround between tobacco seed and the finished product, production was for a time unable to keep up with the new fad-like
FAD
In biochemistry, flavin adenine dinucleotide is a redox cofactor involved in several important reactions in metabolism. FAD can exist in two different redox states, which it converts between by accepting or donating electrons. The molecule consists of a riboflavin moiety bound to the phosphate...
demand for premium cigars, resulting in widespread backorders and rising prices.
Lew Rothman later remembered the extraordinary situation in these years:
"Insanity reigned. * * *
"Tobacco is harvested in six to seven primings, as the leaves on a plant mature from bottom to top. Each priming is normally three leaves. In past years and under normal circumstances, what is left is the corona, or top, of the plant. These are very small leaves heavily laden with nicotineNicotineNicotine is an alkaloid found in the nightshade family of plants that constitutes approximately 0.6–3.0% of the dry weight of tobacco, with biosynthesis taking place in the roots and accumulation occurring in the leaves...
. The corona was often sold to chewing tobaccoChewing tobaccoChewing tobacco Chewing tobacco Chewing tobacco (also known colloquially as hoobastank, backy, tobac, doogooos,Hogleg, chewpoos, chits, chewsky, chawsky, dip, flab, chowers, guy, or a wad, as well as referred to as dipsky, snuff, a pinch, a yopper, a Packing a bomb, a tobbackey or packing a...
companies who flavored this nicotine-laden tobacco and then sold it under names like Mail Pouch, Red ManRed ManRed Man is a leading brand of chewing tobacco in the United States, produced since 1904. Red Man has traditionally come as leaf tobacco, in contrast to twist chewing tobacco or the ground tobacco used in snuff, and became a leader in that form of oral/dental/mouth tobacco. It is made by the...
, and others... If the corona remained unsold, then it and the stalk would be plowed under to provide soil-enriching nitrogenNitrogenNitrogen is a chemical element that has the symbol N, atomic number of 7 and atomic mass 14.00674 u. Elemental nitrogen is a colorless, odorless, tasteless, and mostly inert diatomic gas at standard conditions, constituting 78.08% by volume of Earth's atmosphere...
for next year's crop.
"During the Cigar Boom years, this practice all but disappeared! Why? Because during the priming cycle the tobacco stalks would have a secondary growth of tiny leaves much like the sucker branches you might see on a tree limb. The shortages of tobacco were so ferocious that everyone began harvesting these tiny second-growth leaves, called capadura, to use as filler tobaccos, and brokers started to sell capadura, the same stuff that used to get plowed under. The point being that every single conceivable scrap of anything that would pass for cigar leaf was being courted by manufacturers large and small, new and old, to meed the demand for cigars in the first half of the 1990s."
The bust of 1997 and legacy
The cigar boom is recognized to have ended in 1997, when the expanded supply of handmade cigars caught up with backorders and soon far outstripped demand, leaving millions of unsold cigars in wholesale inventory. Import figures plummeted and newly-established brands faced unparalleled cash-flowCash flow
Cash flow is the movement of money into or out of a business, project, or financial product. It is usually measured during a specified, finite period of time. Measurement of cash flow can be used for calculating other parameters that give information on a company's value and situation.Cash flow...
problems. The bust which swept the industry continued for a period of two years, a shakedown which resulted in the death of many fledgling companies.
Many of the manufacturers who survived the downturn of the industry, generally basing their production in the Dominican Republic
Dominican Republic
The Dominican Republic is a nation on the island of La Hispaniola, part of the Greater Antilles archipelago in the Caribbean region. The western third of the island is occupied by the nation of Haiti, making Hispaniola one of two Caribbean islands that are shared by two countries...
, Nicaragua
Nicaragua
Nicaragua is the largest country in the Central American American isthmus, bordered by Honduras to the north and Costa Rica to the south. The country is situated between 11 and 14 degrees north of the Equator in the Northern Hemisphere, which places it entirely within the tropics. The Pacific Ocean...
, or Honduras
Honduras
Honduras is a republic in Central America. It was previously known as Spanish Honduras to differentiate it from British Honduras, which became the modern-day state of Belize...
, were able to reestablish themselves through the marketing of new and innovative shapes and sizes. Traditional ring gauges were de-emphasized in favor of thicker and longer products, a trend which has continued into the cigar market of the 21st century.
Further reading
- David Savona, "The Calm: The Gold Rush Days of the Cigar Boom are Gone, and So are Most of the Quick-Buck Artists Who Flocked to the Dominican Republic," Cigar Aficionado, vol. 7, no. 6 (October 1999), pp. 228-237.