Creating Cigars at Different Price Points
Not only do blenders have to balance the flavor and strength of a cigar, but they’re also responsible for balancing the cost of the cigar. Tobacco varietals, priming, and grade all impact the price of the tobacco. Not only does the price per pound matter, but also the numbers of cigars that can be produced with that tobacco. When blending a cigar, master blenders select these tobaccos based on the desired price point, strength, and taste of their blend.
Tobacco varietal matters quite a bit for a few important reasons. For one, different varietals yield varying numbers of leaves per plant—some producing more, and some producing less. Also, different varietals yield better in some regions versus others. For example:
Mexican San Andrés ~ $26/lb.
Habano ~ $26/lb.
Ecuadorian Conneticut ~ $26-30/lb.
US Connecticut ~ 30+/lb.
Broadleaf ~ $32/lb.
Tobacco varietal can also impact the thickness of the leaf.. A thicker leaf weighs more, resulting in fewer cigars being produced from it. Here are some rough numbers to demonstrate:
Broadleaf ~ 20 lbs. to make 1000 cigars.
Habano ~ 8 lbs. to make 1000 cigars.
Connecticut ~ 6 lbs. to make 1000 cigars.
As we’ve discussed in the past, primings are the different leaves on a plant that influence the taste and strength. These primings have different thicknesses, as well. Even within a same variety, leaves can be significantly different in thickness and cigar yield. For example:
High priming Connecticut ~ 7 lbs. to make 1000 cigars.
Low priming Connecticut ~ 5 lbs. to make 1000 cigars.
While this might not seem like an enormous difference, this represents a 40 percent increase in cost.
The price of tobacco also varies depending on the purpose it’s intended for. To that end, tobacco is sorted into three different grades of dramatically differing costs. These are wrapper, binder, and filler tobaccos.
Wrapper: Wrappers are made of the highest quality leaf, representing only full leaves. These wrapper leaves contain no holes or imperfections that would be seen by the purchaser. Wrapper leaf is the most expensive tobacco in the cigar, bringing over $26/lb. Even wrapper leaves can vary slightly in color, which is why cigars have to be color-sorted after they’re rolled. The cigars that are the greatest outliers are usually separated and sold separately (we’ll have more on this next week).
Binder: These leaves are lower quality than wrapper leaves but higher quality than filler leaves. Binder leaves may have small holes or imperfections, but none large enough to affect the burn of the cigar. Because the binder will be wrapped, these small visual imperfections don’t matter as much. Binder leaves aren’t as expensive as wrapper leaves, but they’re significantly more expensive then filler tobacco, bringing ~ $9-11/lb.
Filler: Almost any leaf can be used as a filler because visual imperfections don’t matter at all, and these leaves can be broken down to the correct size. Filler leaves make up a majority of the tobacco in a blend. Premium cigars are made with long filler tobaccos, meaning a whole leaf running from the head to the foot of a cigar. Cheaper and smaller format cigars sometimes use short filler, which use shredded pieces of the leaves themselves. Filler is the least expensive tobacco in the cigar, with long filler ranging in cost from $7.50-$9 and short filler costing <$2/lb.
Tobacco is sold based on supply and demand, and prices can vary as much as 20 percent in a calendar year. So far, tobacco prices in Quarter 1 or 2022 were up roughly 10 percent, and there is anticipation of second-half shortage of tobacco, which means even more increases are possible and even likely. While a cigar may taste amazing, utilizing tobaccos that are too expensive can price their customers out, leaving manufactures and retailers stuck with dead inventory that doesn’t move. There are also some hidden tricks that manufacturers use to produce the cheaper “bundle” cigars. We’ll discuss this in greater depth next week, so be sure to check back to learn more!
If you want to learn about some hidden costs of expensive cigars that manufactures also have to consider, check out this blog post.