Cigar & Cigarillos Market Size, Share & Trends Report

Cigar & Cigarillos Market Size, Share & Trends Analysis Report By Product (Mass Cigar, Premium Cigar), By Flavor (Tobacco/No Flavor, Flavored), By Region, And Segment Forecasts, 2019 - 2025

  • Published Date: Apr, 2019
  • Base Year for Estimate: 2018
  • Report ID: GVR-3-68038-075-0
  • Format: Electronic (PDF)
  • Historical Data: 2015 - 2017
  • Number of Pages: 100

Industry Insights

The global cigar and cigarillos market size was valued at USD 16.99 billion in 2018. It is expected to expand at a CAGR of 3.1% during the forecast period. The global market is expected to witness substantial growth owing to the increasing number of luxury hotels with cigar lounges. Following the worldwide ban on smoking in public places, such lounges and bars are making appearance in luxury hotels and bars. For instance, DUKES Hotel of London welcome its stogie-loving visitors in the cognac and cigar garden. The secluded courtyard located behind the hotel offers a list of cognacs to accompany the Cuban cigar.

Introduction of various flavors including wine, tea, chocolate, and vanilla to mask harsh taste of tobacco is fueling the demand among the young consumers. Flavored product is the most popular variety among the premium cigars. The flavors such as sweetened tobacco product like swisher sweet and white owl are leading the market for generations, while flavored product like Tatiana, Acid, and Java have contributed in increase in demand for flavored product in last 15 years. In addition to this, companies operating in the tobacco product industry are conducting R&D activities in order to offer better tobacco quality and innovative flavors to compete in the market.

U.S. cigar & cigarillos market

China is one of the prominent markets for premium cigars and is expected to become largest markets in the upcoming years. Traditionally, cigar was considered as luxury tobacco product, which is purchased by rich, middle aged consumers. However, increasing penetration of low cost product coupled with growing number of young billionaires in China is expected to promote the usage on a domestic level. Moreover, Cuban cigar manufacturers are focusing on increasing their market reach through the strategic collaboration.

For instance, in 2017, Habanos S.A. signed an agreement with the China National Tobacco Corporation to increase import of premium cigar. The company is focusing on training their sales force along with increasing spending for the expansion of their distribution networks. However, Habanos S.A. is facing challenge in increasing awareness related to the various brands such as Montecristo, Romeo, and Julieta, on account of increased visibility of Cohiba, one of the island’s leading brand popular among Chinese consumers.

Demand for Cuban cigar is expected to witness significant growth in India on account of increasing concentration of cigar clubs in cities including New Delhi, Bengaluru, Mumbai, and Kolkata. The demand is attributed to growing brand awareness among the neo rich coupled with increased influence of western culture among young consumers. However, the lack of adequate choice and limited marketing due of stringent government regulations on advertising of tobacco-related products are expected to hinder the growth in near future.

Product Insights

Mass cigar held the largest market share of 82.3% in 2018. Compared to premium, mass products are likely to be most preferred by young consumers. Mass category products are machine made and are less expensive compared to premium category products, owing to which, young consumer, mostly high school students opt for mass category products. In addition, mass category products are available in various flavors such as mint, chocolate, menthol, and vanilla which has led to rise in consumption.

Premium cigar segment is expected to witness the fastest growth over the forecast period on account of growing demand from luxury hotels and bars. Furthermore, premium products are handmade and are witnessing significant demand from developed markets such as U.S., U.K., and China. Growing popularity of unique taste and favor is positively influencing the demand for this category since the past few years. Moreover, online stores are witnessing strong demand for premium category which is expected to drive the market during the forecast period.

Flavor Insights

In 2018, tobacco/no flavor segment led the market in terms of revenue share and is expected to maintain its dominant position over the forecast period. The segment was valued at USD 12.05 billion in 2018 and is expected to expand at a CAGR of 3.0% from 2019 to 2025. Most of NORDIC population preferred no flavor tobacco products, followed by chocolate and vanilla flavored tobacco products.

Flavored products are expected to witness significant growth over the forecast period owing to the rising popularity of flavored products among young consumers. Moreover increasing number of female consumers is expected to boost the scope of demand for flavored products over the forecast period. Among the various flavors, fruit-based flavors are the most preferred, but sale of non-descriptive flavor such as wine, tea, and Jazz are expected to witness substantial growth in near future.

Regional Insights

North America held the largest market share in 2018, attributed to the growing demand for premium cigars from luxury hotels and bars in U.S. According to the Cigar Association of America, about 330 million sticks were shipped to U.S., in 2017, making it the biggest import year in nearly two decades.

Nicaragua led the import market and was the largest exporter of premium cigars for two consecutive years, beating the Dominican Republic once again. Increased import from Nicaragua was due the love for unique taste of Nicaragua tobacco among the U.S. consumers. However, stringent rules and norm by the U.S. Food and Drug Administration (FDA) for the launch of new products coupled with the heavy taxation by the U.S. government is expected to restrain the growth in near future.

Global cigar & cigarillos market

Europe is expected to expand at a CAGR of 1.9% over the forecast period. Increasing preference by women is projected to drive the regional market. Increasing number of female smokers in the countries like Poland and Russia is expected to boost the demand in Europe. Furthermore, increasing taxation on cigarette, their bad reputation coupled with increased prices has led to a shift in consumer preference in the region.

Asia Pacific is expected to register a CAGR of 8.9% over the forecast period. The demand for Cuban cigar is growing in the region. China was the largest regional market and held 48.35% share of Asia Pacific cigar and cigarillos market. Cigar is considered as a luxury product to accompany drinks and meals. The moments of meal with the family and friends is considered vital in the Chinese tradition and people organize ceremonial meals for celebrating important occasions. This time is considered appropriate in the country to share drinks and cigars with the family, friends, and co-workers, which in turn has led to a rise in demand from China.

Cigar & Cigarillos Market Share Insights

The global market is getting more and more diversified with the availability of products in all the range and flavors. The top most competitors are Nicaragua, the Dominican Republic, Honduras, and Brazil. In recent days various verities are launch by the manufactures to gain greater market share. Many regional and domestic players are entering into the market with a unique and innovative products to gain customer base. Recently, in Europe, Switzerland entered into cigar manufacturing and Swiss brand “Davidoff” which is gaining popularity as a brand with unique quality of the product. Moreover, Nicaragua innovated organic cigar with a brand name “Plasencia”, which is expected to gain popularity in Asia, especially in the China.

Report Scope

Attribute

Details

Base year for estimation

2018

Actual estimates/Historical data

2015 - 2017

Forecast period

2019 - 2025

Market representation

Revenue in USD Million & CAGR from 2019 to 2025

Regional scope

North America, Europe, Asia Pacific, Central & South America, Middle East & Africa

Report coverage

Revenue forecast, company share, competitive landscape, growth factors and trends

Country Scope

U.S., Germany, U.K., Spain, France, China, Australia

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Segments Covered in the Report

This report forecasts revenue growth at global, regional, and country levels and provides an analysis of the latest industry trends in each of the sub-segments from 2015 to 2025. For the purpose of this study, Grand View Research has segmented the global cigar and cigarillos market report on the basis of product, flavor, and region:

  • Product Outlook (Revenue, USD Million, 2015 - 2025)

    • Mass

    • Premium

  • Flavor Outlook (Revenue, USD Million, 2015 - 2025)

    • Tobacco/No Flavor

    • Flavored

  • Regional Outlook (Revenue, USD Million, 2015 - 2025)

    • North America

      • U.S.

    • Europe

      • Germany

      • U.K.

      • Spain

      • France

    • Asia Pacific

      • China

      • Australia

    • Central & South America

    • Middle East & Africa

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