Little Cigars Getting Big

From Rich Perelman at CigarCyclopedia:

Sales of little cigars – sized like cigarettes, but made of tobacco and homogenized tobacco leaf – increased by 16 percent in 2004 to 2.9 billion.

At that level, Norman Sharp, President of the Cigar Association of America, indicated in a story in the Winston-Salem Journal that 2004 sales reached $160-170 million. That’s still a small part of the overall cigar sales total in the U.S.

The story focused on Lane Limited, a Tucker, Georgia-based company which is a unit of the Reynolds American tobacco conglomerate. Lane is primarily in the cigarette (Dunhill) and little cigar (Winchester) business, but is best known among cigar lovers as distributor of the Dunhill Dominican and Dunhill Signed Range brands. It was a major player in the cigar business until merged into British-American Tobacco in 1999 and went from more than a dozen brands – including Legion, Medal of Honor, Montecruz, Onyx and Royal Jamaica – to just the Dunhill business.

In the little cigar segment, Lane stands third behind Swisher International and Altadis U.S.A. According to the Maxwell Report, which follows cigarette and cigar consumption and sales statistics, Swisher has 42.7% of the market, led by its Swisher Sweets brand. Altadis has a whole portfolio of the little cigar brands, led by Dutch Treats, Hav-A-Tampa, Phillies Little Cigars, Erik, Between the Acts and others, and has a market share of 26.2%. Lane’s Winchester, Schimmelpennick and Captain Black brands own 15.5% of the market. Combined, that’s 84.4%.

Although the little cigar total reached 2.9 billion in 2004, the largest cigar segment by sales is machine-made large cigars at 4.6 billion. The premium cigar market – imported handmades – is comparatively tiny at 304 million last year, only about 3.9% of the total. But it’s the most fun.

Posted on Monday, April 25th, 2005 at 11:32 am.