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Deputy President for Marketing at Habanos S.A.

Habanos: The Premium Market Heavyweight

Amid a world that fans antismoking campaigns and publicity bans, Habanos continue to be the most sought-after cigars for their top quality and exclusiveness.

Despite antismoking campaigns and a stepped-up publicity regulations stretching out across today’s world, the quota of Habanos in the Premium market keeps getting bigger and stronger. That’s why it’s nearly mandatory to talk to experts in the field, like Cuba’s Manuel Garcia, a man with many years under his belt in this elite realm who’s currently Deputy President for Marketing at Habanos S.A., the corporation in charge of doling out those magical cigars in over a hundred nations.

Excelencias: For a number of years, Habanos S.A. has been launching new products that catch on immediately. How does this corporate strategy of yours fit in the Premium cigar market worldwide?

Manuel Garcia: The launch of new products in the Habano portfolio calls for a detailed research study of market trends, beginning with the profile and behavioral patterns of this item’s consumer in an ever-changing environment.

“This process not only entices legal factors, like new and tightened antismoking regulations that restrict smoking areas and places where smokers have traditionally puffed at their cigars, but also other factors such as today’s fast-paced lifestyle, shortage of spare time and so on.

“That’s why Habanos S.A. is now trying to be resilient and adapt its proposals to smokers, thus broadening its outreach to meet those new needs and preferences that pop up every step of the way.

“A good case in point is the introduction of shorter, midsize cigars that give smokers the chance of puffing at their stogies in a shorter span of time, without wasting the opportunity of feeling the taste and richness any Habano has to offer. That’s the case of Romeo & Juliet’s Short Churchill, unveiled in 2006, and the Montecristo Petit Edmundo, that hit the market this year.

“Moreover, today’s Habano smokers not only wallow in the taste of the cigar, but also in its culture and the art of collection. That’s why Habanos S.A. is also developing and beefing up products designed for a more exclusive and knowledgeable market niche, like Reserves, Specialties and Limited Editions.”

— What are Habanos S.A.’s development perspective in the mid and long terms?

— Habanos S.A. will continue improving, enriching and renewing its Standard portfolio. A major focus of attention will be on the development of long-term products, like the Special Series, a slot where Habanos Collection, Humidor Replicas and other exclusive stuff are great standouts. All of these items are designed to be sold in our prestigious international network of Habano Houses stores.

“On the other hand, the company will continue buttressing the concept of annual Limited Editions, products that have been highly coveted among connoisseurs since they were first launched five years ago.

“For 2007, Habanos S.A. has some very pleasant surprises up its sleeve. One of them is the presentation of a new Cohiba brand’s line, the ripe layer or capa madura, following a five-year aging process and tossed into the market in three thoroughly selected formats.

“The other novelty is the Montecristo brand, about to be privileged with the Reserve Concept and that this time around will pay tribute to the brand’s bestselling cigar ring in its history: the Montecristo No. 4.

“I must say that beginning this year, the making of Reserve-branded products will count on tobacco leaves that have endured at least a three-year aging process in the making of a selected cigar ring. So, the millions of lovers that Montecristo No. 4 has around the world will really have reasons to celebrate.”

— What are the top markets for your company and its leading products?

— “The most important markets in terms of sale volumes are Spain, France, Germany, Switzerland, Lebanon and Benelux. The leading products are basically slotted in world-class brands such as Cohiba, Montecristo, Romeo & Juliet, Partagas, H. Upmann, Hoyo de Monterrey; though I must say there are some cigar rings doing very well in other high-ranking brands like Trinidad, San Cristobal de La Habana, Cuaba, Punch, Vegas Robaina and Ramon Allones, among others.

“There are other cigar rings as well that from the word go panned out to be must-haves for smokers, like Cohiba Robustos, Montecristo No.4 or Partagas Series D No.4. Yet, other recently created rings have also jumped on the bandwagon since they hit the market, like Cohiba Siglo VI, Montecristo Edmundo, Partagas Series P No.2, Romeo & Juliet’s Short Churchill and Hoyo de Monterrey’s Petit Robusto.

— Habanos S.A. gave a facelift to many of its products and global brands. What did the company do that for?

— In recent years, antismoking regulations have gotten even tougher, with more restrictions in certain geographical regions or countries in particular. As a result, now cigar boxes and cases must have the Surgeon General’s warning label stuck on them.

“In this sense, Habanos S.A. started out a process a few years ago to redesign cigar boxes and cases for its products, beginning with the global brands. And this process was carried out in compliance with those regulations, yet taking extreme caution not to cause any damage to our image or brand codifications, or to the beauty of the illustrations printed on them.

This work was basically done on the cut-open cartons and pouches, aluminum tubes and the traditional branded boxes. But we also cashed in on this opportunity to improve other characteristics in the containers that supported a few improvements as well in a bid to come up with higher-quality printings, and manage to harmonize the images of the different boxes and cases within the same brand.

“This whole process wound up raising the quality of the containers and put them up to par with the exclusive image of Habano brands, always being faithful to the traditional attributes that stand them out.”

— Antismoking bans and advertisement regulations for the tobacco industry are getting tougher with each passing year. How is this situation affecting Habanos S.A.?

— Antismoking laws and publicity regulations are certainly making a dent in the overall cigar market, and more particularly in the Premium cigar market as a result of sanitary labels glued on boxes and cases, of bans on locations where people may smoke, and other drawbacks.

“However, Habanos S.A. has maintained its sale volumes and is enhancing its quota in the market. And that’s owed to nonstop resiliency in terms of both actions and strategies. The company continues to foster its dealings with our exclusive distributors through the opening of Smokers Clubs, among other actions. In the same breath, the advance of the Habano House franchise worldwide has also played a major role.

“As we speak, there are 114 Habano Houses in the world’s major cities, exclusive stores for this particular kind of cigar. But above all, they are very special places for communication where people can learn about the history of brands and their culture, unique spots for Habano lovers where they can actually have the entire well-stocked portfolio at their fingertips and receive a top-notch service.”