Cuba Reports Large Revenue Gain, With China As Its Largest Market By Value
The Habanos Festival kicked off this morning in Havana with a press conference of Cuban officials reporting the financial performance of the Cuban cigar industry in 2023. Habanos says it had revenues of $721 million for 2023, a massive 31 percent gain over 2022. According to the Cubans, last year was a tremendous one for revenues, far different from the 2 percent gain it reported for 2022.
The results come from much higher prices on Cuban cigars worldwide, particularly special releases priced in the hundreds of dollars per cigar. Cuban cigar prices have soared in recent years, and cigars that once could be had for a few hundred dollars a box can now cost $3,000 a box and more.
“There are different reasons to justify this growth,” says Jorge Pérez Martell, commercial vice president of Habanos. “After the pandemic, both the luxury market and the consumption of premium cigars in the world have been increasing considerably and have been in high demand in our regions.”
He pointed to limited-edition, special-release cigars in particular, mentioning such expensive and high-profile launches as the Cohiba Siglo de Oro as an example of what’s driving those higher revenues. (That cigar in particular is far more expensive than any traditional cigar; a box seen on the shelf of a cigar store this morning in Havana had a retail price of $4,500. As there are 18 cigars in the box, that translates to $250 per cigar.
Habanos also spoke about its recovery from damaging hurricanes that greatly impacted the key growing region of Pinar del Río, taking down curing barns and severely impacting Cuba’s tobacco infrastructure.
“The main impact was on the infrastructure of tobacco houses, the places where they house the leaves,” says Martell. “These structures in the country were affected, and then we started taking actions to reanimate everything that was destroyed by the hurricane and today we have a great part of this infrastructure operating 100 percent . . . There are still some minimally damaged areas, and it has been published in the press, with mainly issues related to construction.”
China has emerged as the No. 1 market in the world for Cuban cigars, ranked by revenues. The No. 2 market by value is Spain, followed by Switzerland, Germany and the United Kingdom to round out the top five.
The picture is different when looking strictly at volume. In terms of units of cigars shipped, Spain is the biggest market for Habanos, followed by France, China, Germany and Switzerland.
Breaking down the world into regions, Europe accounts for 56 percent of Habanos sales, followed by 21 percent for the Asia/Pacific region. The Americas account for 13 percent, with 10 percent of sales coming from Africa and the Middle East.
Habanos sells no cigars to the United States, due to the longstanding U.S. Embargo on Cuba.
Cigar Aficionado is in Cuba all week covering the Habanos Festival, so check back for updates every day.
