Swedish Matchs View of Premium Cigars
13 Apr, 2009- That’s the world cigar situation as noted in the new Annual Report from Swedish Match, published in advance of its annual shareholder meeting scheduled for April 28 in Stockholm. The report contained other highlights, including:
- "Premium cigars on the North American market accounted for 41 percent of the Group’s total cigar sales in 2008. Swedish Match estimates that the North American market for premium cigars declined by approximately 5 percent in volume terms during 2008, to approximately 270 million units. The trend in the U.S. has been toward a higher percentage of smaller premium cigars."
- "Swedish Match is the market leader in the U.S., with a market share estimated by Swedish Match to be in the range of 30 percent, measured in number of cigars sold."
- "Consumers of premium cigars in the U.S. are brand loyal, but enjoy trying new varieties of their favorite brands. Continuous new product development and line extensions are therefore very important in this category."
- "That’s Swedish Match’s view of the U.S. premium-cigar situation at present, with Macanudo remaining the national brand leader and major sales roles for Partagas, Punch, Hoyo de Monterrey, Cohiba, La Gloria Cubana, Don Tomas and Helix. In the much-larger machine-made category, Swedish Match is the no. 4 player in the U.S., behind Swisher International, Altria’s John Middleton and Altadis U.S.A., on the strength of its Garcia y Vega and White Owl brands. The company report noted that "During 2008, little cigars continued their upswing in popularity in the U.S., while there was continued movement away from certain flavored cigars, toward natural wrapper and lightly aromatic cigars. As natural wrapper cigars tend to sell at higher retail prices than these flavored cigars, this trend has positive impact on sales."
- Swedish Match reported sales of $440.15 million in cigars (converted from Swedish Kronor) in 2008 and operating profits of $82.9 million. The company employs 11,866 people in total, with the largest staff numbers in the cigar-production countries of the Dominican Republic (3,429, 61% of whom are women), Indonesia (1,793, 83% women) and Honduras (1,817, 50% women). The U.S., which includes some production staff, has 1,325 Swedish Match employees (64% men) and the headquarters country, Sweden, is only fifth in staff count at 898 (54% men).
- The report paints a positive picture of the company’s cigar business, but with the obvious concern over the downtown in U.S. and European consumption thanks to restrictions and the economy. Worth noting was that more than 7,500 or 63% of the company’s employees are involved in cigar manufacturing in the Dominican, Honduras, Indonesia and Belgium, not including the U.S. employees who make Garcia y Vega and other brands in the plant in Dothan, Alabama. If the new federal and local taxes cause further slides in consumption, those folks are going to be hurt, with no bailout in sight.
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La Gloria Cubana Artesanos Retro Especiale has a Connecticut seed wrapper. The Mexican and Nicaraguan binder is enhanced by Nicaraguan and Dominican ligero and an additional peppering of proprietary Nicaraguan and Dominican leaf. 
