Market Trends of Cigar Industry
Offline Retail Channels are the Widely Preferred Distribution Channel
Offline retail channels offering cigars include supermarkets, hypermarkets, convenience stores, specialty stores, food and grocery stores, mass markets, military commissaries, select clubs, and other retail chains.
Convenience stores are the most popular and preferred channel for consumers to purchase cigars across various regions. Convenience stores are strategically placed in areas near the homes and workplaces of consumers, increasing accessibility for consumers, thus making them one of the highest-selling points for cigars. Moreover, specialty stores, including cigar lounges, offer greater visibility and a wide assortment of cigars, making them another prominent distribution channel. The major players operating in the market sell their products through these stores, as they are convenient retail channels for end-users and vendors. For instance, in November 2023, a new specialty store named ‘Living My Best Cigar Life’ was opened in Moundsville, West Virginia, United States. The shop initially started offering premium cigars and other products. The specialty store also featured a separate smoking lounge featuring 10 chairs and five TVs.
Moreover, the key players also consider supermarkets and hypermarkets to be growing distributors for offering cigars due to the high footfall of customers in such retail stores. Additionally, supermarkets provide the convenience of shopping in terms of the availability of all daily-need items under the same roof, making it another prominent selling point.
Asia-Pacific Holds the Largest Market Share
In the Asia-Pacific market, the consumption of conventional cigars is higher compared to premium cigars due to the extremely high tax rates for premium cigars. The ban on e-cigarettes in the developed parts of China, including Beijing, is the primary factor responsible for the growth of the cigar market in the country. However, the high prices discourage the youth from smoking cigars and cigarettes and encourage the current smokers to quit. The high tobacco production in Asian countries also drives the market for cigars across the region.
According to data published by the India Brand Equity Foundation (IBEF) in May 2022, India ranked behind China as the world's second-largest tobacco producer. Around 0.45 million hectares of land in the nation are used for tobacco farming. In India, tobacco is grown on about 10% of the world's land, making up 9% of the world's tobacco production. Over the past five years, around 800 million kg of tobacco crops were produced on average in India. Several types of tobacco are made in the nation, including flue-cured Virginia tobacco, country tobacco, burley tobacco, bidi tobacco, Rustica tobacco, hookah tobacco, cigar-wrapped tobacco, cheroot tobacco, burley tobacco, oriental tobacco, and chewing tobacco. According to the Ministry of Commerce and Industry, India exported USD 923.22 million worth of tobacco from 2021 to 2022. Such factors, along with the availability of cheaper cigars, are likely to provide a competitive edge to the Asian markets over other regions, thus driving the market.
