Global Cigars & Cigarillos Market Overview, 2023-28

Global Cigars & Cigarillos Market Overview, 2023-28

A roll of tobacco that has been wrapped in tobacco leaf or another substance that contains tobacco is known as a cigar. The majority of cigars are tobacco products that burn. They range in size from small cigars, like cigarillos or small filtered cigars, to giant cigars, like big so-called premium cigars. Cigarillos are typically larger than cigarettes but smaller than ordinary cigars. Cigarillos are often constructed without filters and are intended to be smoked, not inhaled, like a cigar. Due to reasons including consumer acceptance of cigars and cigarillos as status symbols and lower tax on cigar and cigarillos products, the market for cigars and cigarillos has experienced tremendous development. Additionally, the rising income and standard of life in developing nations offer enormous market prospects for the major industry participants. The market for cigars and cigarillos is expected to rise overall, but severe government regulations around advertising and smoking in public places are expected to impede that growth. The global cigar market has been developing as a result of rising customer preference for goods that complement luxurious lifestyles and the premiumization of cigars, which is expanding quickly. Government restrictions on tobacco and tobacco products also have an impact on and continue to be a major factor in driving the cigar business. For instance, the FDA mandates warning words on the packaging of premium cigars that are comparable to those that are currently required for cigarettes and tobacco products. Premium cigar marketing and advertising must also contain these warnings. To draw customers and expand their market share, businesses have started presenting novel cigar packaging designs. For instance, in February 2021 Oliva Cigars introduced three Vitola Serie V cigars in a new packaging style that is a compact box of three cigars that attractively presents these cigars in a more condensed space.

According to the research report, “Global Cigars & Cigarillos Market Overview, 2023-28” published by Bonafide Research, the market is anticipated to cross USD 45 Billion by 2028, increasing from USD 35.81 Billion in 2022. The market is expected to grow with 4.18% CAGR by 2023-28. The key factor propelling the industry is the increase in the number of upscale hotels with cigar lounges. The demand for lounges and bars is growing in upscale hotels as a result of the ban on smoking in public places. For instance, upscale accommodations in London like The Wellesley, Bulgari Hotel, and Corinthia Hotel permit cigar smoking. New cigars with different flavours have been developed as a result of evolving smoking habits. Among youthful customers, flavours like chocolate, tea, vanilla, and wine are becoming more popular. Few flavours, such white owl and Swisher Sweet, are among the most well-liked flavours predominating the market. However, flavoured goods like Java, Acid, and Tatiana have made significant recent contributions to the expansion of flavoured goods. Given the rising demand for flavour-based cigars, top brands are investing a sizable amount in R&D operations to release cutting-edge flavours on the market. The market is becoming more varied due to the availability of a wide variety of flavours. Honduras, Nicaragua, Brazil, and the Dominican Republic are the top rival nations. Manufacturers place a strong emphasis on the release of novel items with enhanced flavours and tastes. A number of regional players are entering the market with distinctive product designs. As an illustration, the recently launched Swiss brand ""Davidoff"" is becoming popular with consumers. The company is renowned for offering exceptional items. Additionally, Nicaragua launched ""Plasencia"" organic cigar brands to appeal to Chinese consumers.

Based on the region, cigar and cigarillo consumption has a long-standing tradition and cultural significance in many South American countries. The practice of smoking cigars is deeply rooted in the history and social fabric of the region. In countries like Cuba, the Dominican Republic, and Nicaragua, cigars have been produced and enjoyed for generations, making them an integral part of local culture and heritage. This cultural attachment has led to a consistent demand for cigars and cigarillos. South America is home to some of the world's most renowned tobacco-producing countries, such as Cuba, the Dominican Republic, Nicaragua, and Honduras. These countries have ideal climate and soil conditions for growing high-quality tobacco, which is essential for premium cigar production. The availability of premium tobacco leaves contributes to the production of some of the finest cigars and cigarillos in the world, attracting cigar enthusiasts both domestically and internationally. South American countries have seized the opportunity to export their premium cigars to global markets. These exports have gained international recognition and a strong reputation for quality. Exporting cigars and cigarillos to countries like the United States and Europe has become a significant source of revenue for many South American producers, further stimulating the growth of the industry. The region is a popular destination for tourists, and many travelers seek to experience the local culture, including sampling cigars and cigarillos. Cigar tourism has become a niche market, with tourists visiting cigar-producing regions to witness the production process, visit cigar factories, and purchase premium cigars as souvenirs. This has boosted the demand for cigars and cigarillos in areas with a strong tourism industry. Economic growth in South America has led to an increase in disposable income for a growing middle class. As people have more money to spend on luxury and leisure items, the demand for premium cigars and cigarillos has risen. Smoking cigars is often seen as a symbol of sophistication and is associated with a higher standard of living, making it an appealing choice for those with increased spending power. The development of cigar lounges and social clubs has fostered a vibrant culture of cigar and cigarillo consumption. These establishments offer cigar enthusiasts a space to enjoy their cigars in a comfortable and social environment. The growth of these venues has helped create a sense of community around cigar smoking, driving interest in cigars and cigarillos.

Based on the product type, little cigars segment is projected to grow with prominent CAGR during the forecast period. In many regions, little cigars are subject to lower tobacco taxes compared to traditional cigarettes. This price advantage makes little cigars an attractive option for cost-conscious consumers who are looking for a tobacco product that is more affordable than cigarettes. As cigarette taxes have increased in various places, little cigars have become a cheaper alternative. Some consumers perceive little cigars as a potentially less harmful alternative to cigarettes. While it's important to note that little cigars still pose health risks and are a form of combustible tobacco, some individuals believe they are a milder option. This perception has led to an increase in their popularity among those looking to reduce their exposure to harmful chemicals found in cigarettes. Little cigars come in a wide range of flavours, from traditional tobacco to fruit, menthol, and dessert flavours. The variety of flavours is appealing to consumers seeking a more diverse and enjoyable smoking experience. Flavour options can attract younger and newer smokers who may find these choices more appealing than regular cigarettes. Little cigars are smaller and often more convenient than regular cigars. They are similar in size to cigarettes but still provide a cigar-like smoking experience. Their compact size and packaging make them easy to carry, which can be especially appealing to consumers looking for a more portable option. Smoking little cigars has become a social and cultural trend in some communities. They are often marketed as a ""sophisticated"" or ""luxurious"" option, which can appeal to individuals looking to adopt a certain lifestyle or image. Little cigars may be associated with relaxation, socialization, and celebrations, much like traditional cigars. Manufacturers of little cigars often engage in targeted marketing efforts, particularly toward certain demographic groups, including young adults and minority communities. This marketing can make little cigars more appealing to these specific populations.

According to the price range, premium cigars are often associated with luxury, sophistication, and a certain status. Smoking a premium cigar is considered a symbol of refined taste and a sign of affluence. Many individuals view premium cigars as a status symbol and are willing to pay a premium for the experience. Premium cigars are meticulously crafted using traditional methods and high-quality tobacco. Cigar aficionados appreciate the artistry and tradition that goes into making premium cigars. The craftsmanship, aging process, and attention to detail in premium cigar production contribute to their appeal. Smoking a premium cigar is often seen as a ritual and a way to unwind and relax. The process of selecting, cutting, and lighting a cigar is an enjoyable and calming experience for many. Premium cigars are often associated with taking time to savor the moment and enjoy the flavours and aromas. Premium cigars come in a wide range of flavour profiles, from mild to full-bodied, and can offer a complex and nuanced smoking experience. This diversity in flavour appeals to a broad spectrum of smokers, allowing them to find cigars that match their taste preferences. Premium cigars are commonly enjoyed on special occasions, such as celebrations, weddings, and significant life events. The significance and memorability of these moments often lead individuals to choose premium cigars for a memorable and enjoyable experience. The cigar culture and community have been growing, with cigar enthusiasts coming together at cigar lounges, events, and online forums to share their experiences and knowledge. This sense of community fosters an appreciation for premium cigars and encourages individuals to explore the world of cigars. The global nature of the premium cigar industry has allowed enthusiasts to access a wide variety of cigars from different regions of the world. Cigars from countries like Cuba, the Dominican Republic, Nicaragua, and Honduras have earned international acclaim, expanding the market's reach. Premium cigars are often sought after as gift items and collector's pieces. The packaging and presentation of premium cigars can make them an attractive choice for gifting, and some individuals collect rare and aged cigars as investments or for their historical and artistic value.

Based on the distribution channel, online shopping offers unmatched convenience. Customers can browse, select, and purchase cigars from the comfort of their homes or workplaces, 24/7. This convenience eliminates the need to travel to physical stores, saving time and effort. Online retailers often have a broader and more diverse selection of cigars compared to brick-and-mortar stores. Customers can explore a wide range of brands, blends, and sizes, including rare and specialty cigars that may not be readily available in local shops. Online retailers make cigars accessible to a global customer base. Customers can access products from various regions and countries, including renowned cigar-producing countries like Cuba, the Dominican Republic, Nicaragua, and Honduras. This accessibility allows consumers to explore a variety of cigars they might not have encountered otherwise. Online retailers typically provide comprehensive information about their cigar offerings. Customers can access detailed descriptions, ratings, and reviews, helping them make informed decisions about their purchases. This information can be particularly valuable for enthusiasts seeking specific flavour profiles and characteristics. Online retailers often offer competitive pricing due to lower operating costs compared to physical stores. Discounts, promotions, and bulk purchase options are common online, making cigars more affordable for customers. Some online retailers provide direct access to cigar manufacturers and boutique brands. This direct-to-consumer approach allows customers to establish direct relationships with producers, often leading to exclusive releases and access to limited-edition cigars. Online shopping offers a level of privacy that may be preferred by some customers. They can explore and purchase cigars without the social aspects or judgment that may come with in-person shopping. Online retailers have invested in improving shipping and packaging, ensuring that cigars arrive in excellent condition. Many retailers use humidity-controlled packaging to maintain the freshness of cigars during transit. Online retailers often keep records of customers' past orders, making reordering favorite cigars a seamless process. This feature contributes to customer loyalty and convenience.

Market Drivers
• Rising Demand in Emerging Markets: The global cigars and cigarillos market is experiencing a surge in demand from emerging markets, particularly in regions like Asia, the Middle East, and Africa. As these economies grow and urbanize, there is an increasing adoption of Western-style lifestyles and luxury products, including cigars and cigarillos. In many of these regions, cigars are associated with status and exclusivity, which is driving their popularity among the growing middle class. The emerging markets offer significant growth opportunities for manufacturers and are contributing to the global expansion of the industry.
• E-commerce and Online Retail: The proliferation of e-commerce and online retail platforms is transforming the distribution and sales channels for cigars and cigarillos. Consumers now have the convenience of purchasing their preferred brands and products online, often at competitive prices. Additionally, the online environment allows for better accessibility to a wide range of cigars and cigarillos, including rare and specialty items that may not be readily available in physical stores. The ease of online shopping, coupled with the ability to reach a global customer base, is driving the growth of this distribution channel and allowing manufacturers to connect directly with consumers.

Market Challenges
• Taxation and Pricing Pressures: High levels of taxation on tobacco products and fluctuating pricing pressures are persistent challenges in the cigars and cigarillos market. Governments often use tobacco taxes as a source of revenue and to deter consumption for public health reasons. The taxation policies can significantly impact the affordability of cigars, potentially leading to a shift towards cheaper alternatives or black-market products. The fluctuation in pricing can also pose challenges for manufacturers, who must navigate pricing strategies while maintaining profit margins and customer loyalty.
• Supply Chain and Quality Control: Maintaining consistent quality in the production of cigars and cigarillos can be challenging, especially for handcrafted and premium offerings. Quality control is crucial in delivering a satisfying smoking experience. Variability in tobacco sourcing, manufacturing processes, and aging conditions can affect the flavour and overall quality of the product. Additionally, maintaining a global supply chain, particularly in terms of tobacco sourcing and distribution, can be complex due to geopolitical factors, climate change, and other environmental challenges. Ensuring a reliable and sustainable supply chain is a priority for the industry.

Market Trends
• Health-Conscious Alternatives: In response to health concerns and evolving consumer preferences, there is a trend towards offering health-conscious alternatives within the cigars and cigarillos market. This includes the development of cigars with reduced tar and nicotine content, as well as options that use alternative, non-tobacco ingredients. Some manufacturers are exploring the potential of electronic cigars or heated tobacco products, which offer a smoking experience with fewer harmful chemicals. These alternatives are positioned to attract health-conscious consumers while retaining the ritualistic aspects of cigar and cigarillo consumption.
• Customization and Personalization: Personalization and customization are becoming increasingly popular in the cigars and cigarillos market. Manufacturers are providing options for consumers to create their custom blends, select unique packaging, and even personalize cigar bands. This trend aligns with the desire for a unique and exclusive experience, catering to individual preferences and the gift-giving market. Customization allows consumers to feel a stronger connection to the product and is especially appealing to cigar enthusiasts and collectors.

Covid-19 Impacts
The pandemic disrupted supply chains worldwide, affecting the global cigars and cigarillos market. This disruption resulted from factory closures, labour shortages, transportation bottlenecks, and restrictions on international trade. Manufacturers faced challenges in sourcing raw tobacco, producing cigars, and distributing products to retailers. Some cigar-producing countries, such as the Dominican Republic and Nicaragua, experienced lockdowns and restrictions that hampered production and distribution. The pandemic led to shifts in consumer behaviour, which had a noticeable impact on the market. With the closure of bars, restaurants, and social gathering places, many cigar enthusiasts were unable to enjoy cigars in the traditional social settings. This prompted some consumers to reduce their cigar consumption or explore alternatives. On the other hand, the sale of cigars for home consumption increased as individuals sought solace and relaxation in their homes. The closure of brick-and-mortar retailers and the restrictions on in-person shopping accelerated the shift toward online retail for cigars and cigarillos. Many consumers turned to e-commerce platforms to purchase their favourite brands and products. Manufacturers and retailers invested in online sales channels and curbs ide pickup options to adapt to changing consumer preferences. However, health concerns associated with the virus may have influenced smoking habits. Some individuals may have become more health-conscious, leading them to reconsider or reduce their cigar and cigarillo consumption due to potential respiratory risks associated with tobacco use.

Competitive Landscape
The cigar market is highly consolidated and competitive, with the strong presence of regional and global players. Well-established companies with well-known brands have a higher penetration rate across retail shelves, mostly because of business expansion and a higher share of consumer preference across developed and developing markets. Some major players in the market include Scandinavian Tobacco Group A/S, PT Djarum, Imperial Tobacco Group plc, The Japan Tobacco Inc., ITC Limited, Villiger Sohne AG, Altria Group, Inc., Arnold Andre GmbH & Co. KG, Ashton Cigars, Inter-continental Trading USA Inc., Swisher International, Inc., Oliva Cigar Co., Perdomo Cigar Inc, Maya Selva Cigars, Philip Morris International Inc and Rocky Patel Premium Cigars.

Considered in this report:
• Geography: Global
• Historic year: 2017
• Base year: 2022
• Estimated year: 2023
• Forecast year: 2028

Aspects covered in this report:
• Global Cigars and Cigarillos market Outlook with its value and forecast along with its segments
• Region-wise Cigars and Cigarillos market analysis
• Various drivers and challenges
• On-going trends and developments
• Top profiled companies
• Strategic recommendation

Regions covered in the report
• North America
• Europe
• Asia-Pacific
• South America
• Middle-East & Africa

By Type:
• Cigars
• Cigarillos
• Little Cigars

By Flavour:
• Tobacco/ No Flavour
• Flavoured

By Price Range:
• Mass
• Premium

By Distribution Channel:
• Speciality Store
• Hypermarket/supermarket
• Convenience Stores
• Online
• Others

The approach of the report:
This report consists of a combined approach of primary and secondary research. Initially, secondary research was used to get an understanding of the market and list the companies that are present in it. The secondary research consists of third-party sources such as press releases, annual reports of companies, and government-generated reports and databases. After gathering the data from secondary sources, primary research was conducted by conducting telephone interviews with the leading players about how the market is functioning and then conducting trade calls with dealers and distributors of the market. Post this; we have started making primary calls to consumers by equally segmenting them in regional aspects, tier aspects, age group, and gender. Once we have primary data with us, we can start verifying the details obtained from secondary sources.

Intended audience:
This report can be useful to industry consultants, manufacturers, suppliers, associations, and organizations related to the Cigars and Cigarillos industry, government bodies, and other stakeholders to align their market-centric strategies. In addition to marketing and presentations, it will also increase competitive knowledge about the industry.

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