GVR Report cover Luxury Cigar Market Size, Share & Trends Report

Luxury Cigar Market Size, Share & Trends Analysis Report By Type (Hand Rolled, Machine Rolled), By Distribution Channel (Online, Offline), By Region, And Segment Forecasts, 2021 - 2028

  • Published Date: Dec, 2021
  • Base Year for Estimate: 2020
  • Report ID: GVR-4-68039-691-1
  • Format: Electronic (PDF)
  • Historical Data: 2016 - 2019
  • Number of Pages: 80

Report Overview

The global luxury cigar market size was valued at USD 11.61 billion in 2020 and is expected to expand at a compound annual growth rate (CAGR) of 7.2% from 2021 to 2028. A rise in luxury hotel establishments that comprise premium cigar lounges is expected to have a positive impact on the market growth over the forecast period. Moreover, the increasing consumption of tobacco among millennials is anticipated to boost market growth. The COVID-19 pandemic has had a negative impact on the tobacco industry. Factory and store closures due to strict lockdown measures resulted in disastrous consequences, with sales decreasing by 20%-30% from March to April 2020 globally. Companies have been responding positively to the crisis by offering luxury cigars through the online medium as consumers preferred online shopping over offline owing to safety concerns.

U.S. luxury cigar market size, by type, 2018 - 2028 (USD Billion)

An increase in demand for luxury cigars among premium smokers and millennials is strengthening the market growth. Based on a study by the USDA, U.S. per person revenue generated from the sale of cigars was USD 28.48 in 2019 and increased to USD 30 in 2020. In recent years, a large number of premium cigar lounges have emerged across the globe that has propelled the demand for luxury cigars majorly smoked in premium lounges.

According to a study by Cigar Journal, as of 2020, more than 4,553 cigar lounges were operating in the U.S., and this number is further expected to rise in the coming years, primarily driven by a rise in the social acceptability of smoking, coupled with an increase in consumer preference towards a smoother taste of cigars.

Furthermore, there has been a significant year-on-year rise in tobacco consumption across the globe. Based on a study by the World Health Organization, male tobacco use rose to approximately 40 million, from 1.05 billion in 2000 to 1.09 billion in 2018. The study also revealed that even though more than 32 countries worldwide are aiming to reduce tobacco consumption by 30% by 2025, based on current progress a reduction of only 23% could be achieved, depicting the drastic rise in tobacco use. Thus, the rise in tobacco consumption is one of the major factors impacting the demand for luxury cigars.

The online distribution channel has significantly changed the shopping habits of people as it offers benefits such as doorstep delivery, easy payment methods, heavy discounts, and the availability of a wide range of hand rolled as well as machine rolled luxury cigar selection on a single platform. Key players in the market are increasingly launching e-commerce websites in large lucrative markets owing to the rising internet penetration and increasing propensity of mobile shopping among consumers.

Type Insights

The hand rolled segment held the largest revenue share of over 75.0% in 2020 and is expected to maintain its lead over the forecast period. Hand rolled cigars have better popularity among premium smokers than machine rolled cigars owing to their comparatively higher quality. Fillers of luxury hand rolled cigars are made up purely of tobacco leaves, which leads to a better flavor.

Furthermore, there has been a rise in consumer preference for smoother taste experience from cigars, coupled with the willingness to pay a higher price, which, in turn, is increasing the production and imports of cigars. Based on a study by the Cigar Association of America, more than 362 million handmade cigars were imported into the U.S. in 2019, which was the highest spending for import of hand rolled cigars since 1997. Furthermore, hand rolled luxury cigars have a higher consumer preference by male smokers owing to their smooth and mellow taste. Based on a study by MDPI, U.S., more than 79% of male smokers between 22-66 years prefer premium products owing to their smoother and cleaner taste, which is anticipated to further fuel the market demand over the forecast period.

The machine rolled segment is projected to register a CAGR of 6.3% from 2021 to 2028. Machine rolled luxury cigars are preferred by consumers who are willing to pay a comparatively low premium price for a luxury smoking experience. The rising focus of major premium cigar manufacturers, such as Rocky Patel, Fuente Marketing Ltd., and Padron, in expanding their machine rolled cigar portfolio is leading to the growth of this segment.

Distribution Channel Insights

The offline distribution channel held the largest revenue share of over 75.0% in 2020. The gradual lifting of lockdown restrictions throughout the globe is leading to the re-opening of smoke shops, hypermarkets, and stores offering luxury cigars. This is anticipated to slowly bring back the in-store consumer base as the number of vaccinated consumers increases and the threat of COVID-19 minimizes. Furthermore, the growth of this segment can be attributed to the rise in premium cigar lounges established in luxury hotels in countries, such as the U.S., Canada, and the U.K.

Global luxury cigar market share, by distribution channel, 2020 (%)

Online platforms offer significant advantages to consumers, such as freedom of selection, hand rolled and machine rolled cigar prices, and high visibility of international brands, which makes them a suitable platform for all types of customers. Furthermore, online platforms offered a more convenient and safer platform than conventional smoke lounges or retail stores during the pandemic and lockdown restrictions, which was one of the major factors behind the demand for the product through online channels.

Regional Insights                                                                                                  

North America held the largest revenue share of over 30.0% in 2020. Consumers in North American countries such as the U.S. and Canada are willing to pay a high price for unconventional premium cigars. Furthermore, the presence of well-established luxury cigar manufacturers in North America, such as Rocky Patel Davidoff of Geneva and Altadis USA, is another factor expected to support demand.

Asia Pacific is expected to register the fastest CAGR of 9.0% from 2021 to 2028. The expansion of the tobacco industry in India and China, both of which are backed by regulatory support, is expected to ensure continuous production of luxury cigars and thus, be a positive factor for the market growth in Asia Pacific over the forecast period. Furthermore, Asia Pacific accounts for the largest number of tobacco smokers across the globe. Based on a study by the World Health Organization, Chinese smokers accounted for more than 25.0% across the globe as of 2020.

Key Companies & Market Share Insights

The market is characterized by the presence of a few established players and new entrants. Companies have been enhancing their product capabilities to widen their supply, thereby expanding their consumer base. For instance, in September 2021, The Villiger Group entered into a joint venture with Joya De Nicaragua to open a new modern factory to increase the production of hand rolled cigars. The company announced that the opening of a new factory will help them strengthen and expand their market position in the U.S. market for luxury hand rolled cigars. Some prominent players in the global luxury cigar market include: -

  • Fuente Marketing Ltd. 

  • General Cigar

  • Regius Cigars Ltd.

  • Gurkha Cigar Group

  • Gran Habano Cigars

  • Mayan Import

  • The Villiger Group

  • Altadis

  • Rocky Patel Premium Cigars

  • Swisher 

Luxury Cigar Market Report Scope

Report Attribute

Details

Market size value in 2021

USD 12.45 billion

Revenue forecast in 2028

USD 20.25 billion

Growth Rate

CAGR of 7.2% from 2021 to 2028

Base year for estimation

2020

Historical data

2016 - 2019

Forecast period

2021 - 2028

Quantitative units

Revenue in USD million and CAGR from 2021 to 2028

Report coverage

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

Segments covered

Type, distribution channel, region

Regional scope

North America; Europe; Asia Pacific; Central & South America; MEA

Country scope

U.S.; Canada; Mexico; Germany; U.K.; China; Japan; India; Indonesia; Brazil; Honduras; UAE; South Africa

Key companies profiled

Fuente Marketing Ltd.; General Cigar; Regius Cigars Ltd.; Gurkha Cigar Group; Gran Habano Cigars; Mayan Import; The Villiger Group; Altadis;    Rocky Patel Premium Cigars; Swisher

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Segments Covered in the Report

This report forecasts revenue growth at the global, regional, and country levels and provides an analysis of the latest industry trends and opportunities in each of the sub-segments from 2016 to 2028. For the purpose of this study, Grand View Research has segmented the global luxury cigar market report on the basis of type, distribution channel, and region:

  • Type Outlook (Revenue, USD Million, 2016 - 2028)

    • Hand Rolled

    • Machine Rolled

  • Distribution Channel Outlook (Revenue, USD Million, 2016 - 2028)

    • Online

    • Offline

  • Regional Outlook (Revenue, USD Million, 2016 - 2028)

    • North America

      • U.S.

      • Canada

      • Mexico

    • Europe

      • Germany

      • U.K.

    • Asia Pacific

      • China

      • India

      • Japan

      • Indonesia

    • Central & South America

      • Brazil

      • Honduras

    • Middle East & Africa

      • UAE

      • South Africa

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