Despite a challenging 2009, the Habano House franchise added 146 new outlets around the world and the company inched up a percentage point in the world market share. The evolution of sales in recent months is painting a promising picture and is a symptom that the fledgling recovery is picking up steam. The following exclusive interview deals with the above topics and other equally interesting issues.

2010 will be full of Novelties

Please, describe the current situation of the tobacco market worldwide, especially in terms of the habanos. As we all expected, the year 2009 has been tough and hard since the world crisis has continued, even though some markets have hinted at a fledgling economic rebound that would help habanos as well. Moreover, the overall slump in tourism and a 5 percent decrease in the number of travelers around the world have also made a dent in some markets and in the travel retail channel. Habanos, S.A. closed 2009 with an 8 percent decrease in terms of revenues. If we take a look at how deluxe items in different sectors have been faring, some of them plunging by 10 percent, then this result does bear watching, mainly if we bear in mind the evolution of our market in the second half of 2009. So, that makes us believe the economic situation worldwide could do better in 2010. As to the market share in the countries we have operations in, we chalked up a one percentage point uptick of 71 percent in units. As far as price tags are concerned, they remain unaltered in as much as 80 percent of the premium cigars selling in those markets. This is owed to a displacement, triggered by the crisis, in consumers’ shopping habits that now switch from habano brands well established in the market to smaller vitolas at slightly lower prices, yet within the boundaries of the habano portfolio. On the other hand, this has been a good year for the expansion of the Habano House franchise network that now boasts 146 such outlets around the world. In the same breath, the number of Cohiba Atmosphere establishments has doubled with the addition of major habano strongholds like Prague, Beijing, Hong Kong, Buenos Aires, Cancun and Tokyo. What do you expect Habanos’ results might be in the year 2010? I must say that keeping in mind how habano sales fared in the second half of 2009, we could expect a continuation of those good outcomes in certain emerging markets for our products, like Rusia, Brasil or China, and we hope some major traditional markets in Europe, like France, Germany or the UK, to step up their recovery. We’re dealing with the permanent drawback of increasingly tougher antismoking legislations in some nations. In fact, Spain has announced a bill to ban smoking in bars, restaurants and hotels, something that will definitely harm the consumption of after-meal habanos and will evidently cut down on smoking moments for habano aficionados. Either way and regardless of the restrictions, we remain upbeat that common sense will prevail and that despite those restrictions habano smokers will continue looking for the right space to enjoy their habanos, just as they’ve done in such highly restrictive markets as the UK or Croatia, where the government there softened a law that was counterproductive and way too hard on its own citizens. In Habanos, S.A. we have prepared a year 2010 full of novelties and we’re confident we’re going to meet the expectations of habano aficionados. Is it true you’re going to roll out the most exclusive habano line ever produced? In 2010, and following many hardworking years, the new Cohiba Behike line will finally see the light of day. Cohiba is by and large the world’s most prestigious brand in the tobacco industry, the best of the best, the finest cigars hailing from the tobacco plantations of San Juan y Martinez and San Luis. At the same time, Behike will be the brand’s most prestigious line. After the existing Cohiba lines –Classic Line, 1492 and Maduro 5– in the course of the 12th Habano Festival three new vitolas from the Behike line, called BHK52, BHK54 and BHK56, will be unveiled. They have for the first time a kind of tobacco leaf called medio tiempo, so its yearly outputs will be very limited. Also known as Fortaleza 4, the medio tiempo is a rare leaf, coming from the two top leaves of sun-grown plants. However, not all plants produce those leaves. It all depends on the dedication and care growers have in each and every plantation and with each and every plant. But ever-changing weather conditions also play a role, so it’ll be up to all those aspects combined to have enough medio tiempo leaves for the regular productions. Based on its foliar position, the medio tiempo leaves concentrate the highest intensity of taste and strength of the habano. It’s not only about the formats, but also that there’s never been such cigars before under the Cohiba or any other habano brand. They are exclusive: the blend, the cases and even the bands. In addition, the Behike band will have for the first time embossed lettering in holographic paper plus an exclusive hologram that authenticates these exclusive habanos. We may say “Behike is Cohiba’s best-kept secret” because we know for certain that these habano smokers who enjoy the cream of the top will discover in Behike quite a number of unforgettable sensations. During the gala dinner of the 12th Habano Festival, a part of the aficionados will have the chance to enjoy its exceptional character and taste. Back in 2006 there was a humidor called Behike. What does it have in common and what major differences it has with the new Behike line? Those are different things. The 2006 product was a one-and-only production of 100 humidors that marked the 40th anniversary of the world’s most prestigious brand in the tobacco industry with a kind of habano that was just hand-rolled for that particular occasion. There won’t be a repeat. Now in 2010, a new line with yearly outputs and in very limited quantities will be launched, boasting its own characteristics in terms of blend. I mean, what the year 2006 brought to us, with a special design and output, was a commemorative humidor to celebrate the 40th anniversary of Cohiba (1966-2006) under the name of Cohiba Behike. Only 100 humidors were made, with 40 habanos each. Among its main attributes, those humidors had peculiar and exclusive designs, the second band was numbered and embossed with the name “Behike”, and all of them had been made by veteran cigar roller Norma Fernandez, founder of the El Laguito cigar factory. That humidor was the tribute Cohiba deserved for its sustained quality and prestige for over four decades. The vitola selected for the occasion had a unique format in line with the requirements of such an exclusive celebration. These habanos were labeled as “the world’s priciest cigars.” In 2010, as we have said, the 12th Habano Festival will witness the launch of the “Behike line” with annual outputs that will depend on the availability of the medio tiempo leaf, so its production will be extremely limited. The new vitolas of the Behike line feature sizes never seen before in the Cohiba brand. The blend of the Behike line will add for the first time ever the so-called medio tiempo tobacco leaf. At the same time, the new Behike line will have, also for the first time, a couple of security and identification holograms. What other outstanding novelties from Habanos, S.A. are in store in 2010? In addition to the above, there’ll be two major novelties in the Romeo y Julieta brand. Through the years, Romeo y Julieta has become one of the best-known and most sought-after habano brands, thanks in part to the prestigious contribution made by the Churchills vitola. The name Churchill takes us through the imaging of habano and its history. Just three years ago we witnessed the birth of the Short Churchills, a very successful vitola. This year we’ll be unveiling the Wide Churchills, a vitola whose exclusive format (ring 55 and 133 mm long) could clinch quick acclaim among smokers. These thick-ring formats, that burn pretty well and allow for nice puffs, are the fastest-growing cigars of recent years. They will let us wallow in the great taste of Romeo y Julieta by the hand of this innovative vitola coming to habanos for the first time. For the presentation of this vitola, the opening night will feature an exclusive concert. We’ve noticed the 12th Habano Festival’s program will feature a night specially dedicated to women. What’s the reason for that? Women are indispensable all throughout the farming and manufacturing process of the habano in Cuba. As a matter of fact, in many of those processes women are majority and add their sensitivity, carefulness and expertise to the making of such a peculiar product. We know that women who smoke cigars enjoy habanos as much as men do, but our objective is not only to turn this habano into a tribute to femmes, but also to draw an increasingly larger amount of women to a world that’s still mostly dominated by men, let alone count on their necessary complicity. The new vitola will be called Julieta. It will be presented in an elegant and modern aluminum compact case. Both the compact case and the band have been exclusively designed for this new vitola. Finally, what can you say about the novelties of the 12th Habano Festival as an event? The Festival will continue to go strong as a reference event in the realm of tobacco. The 12th Habano Festival will be attended by over 1,000 people from more than 70 countries, including professionals linked to the world of habanos, a number of boldface names from culture, haute cuisine, moviemaking, fashion and the arts in general, as well as smokers, collectors, artisans and aficionados who will have the privilege of gathering to enjoy a passion they all share: the habano, the world’s finest cigar. In recent years, such figures as Jeremy Irons, Joseph Fiennes or Peter Coyote have attended the festival. This time around, we’ll count on opera singer Sarah Brightman, Europe’s golf tour champ and Ryder Cup winner Miguel Angel Jimenez, Oscar-winning film producer Stephen Evans. And we’ll also have two 2009 Latin Grammy Award winners, Chucho Valdes and Ivan Lins. All of them will have the opportunity of reveling in the new products, the special series and the limited editions that Habanos, S.A. will put on the market in 2010, attend the lectures and master classes in the making of habanos in which participants could roll their own habanos. Furthermore, this year attendees could join for the presentation of the Habanos-Tequila Alliance, plus a new event called “Tastes and Aromas” for the tasting and matching of habanos with top-notch products from all over the world.