Cigars & Cigarillos Market Outlook, 2028

Cigars & Cigarillos are rolled tobacco that is wrapped in leaf tobacco and is different from cigarettes. The three most common forms of cigars on the market are cigarillos, cigars, and small cigars. Among young adults who use tobacco products, cigar consumption is more prevalent. Additionally, these goods come in a variety of flavours, including chocolate, fruit/candy, and mint/menthol. Machine-made items that incorporate herbal and botanical infusion are cigars and cigarillos. However, it is possible to buy handmade cigars on the market. With more people smoking around the world, cigars and cigarillos have become more popular. Despite the markets moderate growth, it is anticipated that it will remain stable throughout the course of the projection period due to novel product offerings and inventive marketing methods. Since the sale of tobacco products is permitted in many Western nations, the production of cigars and cigarillos has benefited commercially. By offering new flavours, cutting-edge filtration, and other improvements, market players are concentrating on various innovations in cigars and cigarillos. The youth's desire for cigars and cigarillos has been impacted by the expanding smoking trend. For instance, as per the latest survey done by the Centers for Disease Control and Prevention in 2021, around 44% of people who smoke cigars are middle-aged and high school students. Over the foreseeable period, Cigars & Cigarillo's market expansion will likely be aided by the growing introduction of novel cigar products. Numerous tastes, like wine, tea, chocolate, and vanilla, are being offered to cover up the taste of tobacco, which is driving up demand among youthful users. The most widely used premium cigar variety is the flavoured cigar.

According to the research report, “Global Cigars & Cigarillos Market Outlook, 2028” 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. Youth demand for cigars and cigarillos has been driven by the growing popularity of smoking. The rise of the cigar and cigarillo industry is primarily being driven by the rising number of cigar and cigarillo smokers around the world as a result of peer pressure and changing lifestyles. As a result, the market for cigars and cigarillos is expected to develop over the forecast period due to rising cigar product consumption. It is expected that new market competitors would work more closely together to meet the rising demand for cigars, which will speed industry expansion. The global market is expected to grow greatly since there are more upscale hotels with cigar lounges. The global ban on smoking in public places has led to the emergence of such lounges and bars in high-end hotels and eateries. As an illustration, the DUKES Hotel in London invites its cognac- and cigar-loving visitors on the lawn. A selection of cognacs is available to pair with Cuban cigars in the hotel's own patio. Over the past few decades, the premiumization concept has seen continuous expansion in the market for cigars and cigarillos. Due to the tremendous growth in the use of cigars and cigarillos as well as the large number of tobacco consumers, the industry presents significant prospects for manufacturers. In the world of smokers, cigars and cigarillos are symbols of luxury. People light up cigars and cigarillos to mark important days or occasions. As a result, there is a significant demand due to the growing trend among consumers to celebrate or show this luxury product as a status symbol. Manufacturers are making investments in packaging and quality in order to specifically appeal to the premium market. To increase users' delight, they are primarily concentrating on handcrafted cigars created with premium tobacco. Additionally, industry participants are concentrating on the product's packaging to draw in more customers and give smokers a premium experience.

The increasing demand for luxury tobacco goods, such as cigars and cigarillos, is being driven by consumers' rising living standards, which are in turn being supported by their rising income levels. The market for cigars and cigarillos is also being driven by the wide product availability across numerous brick-and-mortar distribution channels as well as declining product tax rates. Additionally, the rising popularity of cigars and cigarillos has resulted from a move away from cigarettes, snugs, sheesha, etc. because to the rising demand for high-nicotine goods. Additionally, the growing hospitality industry is encouraging the opening of cigar lounges in a variety of upscale hotels and restaurants. In addition, given the increase in female smokers, a lot of product makers are introducing novel flavours for cigars and cigarillos, such as wine, tea, candy, vanilla, etc. The development of e-commerce platforms will continue to fuel the demand for cigars and cigarillos in the upcoming years by offering a variety of products, quicker delivery options, secure payment methods, etc.

Europe's historical connection to various regions, including the Caribbean and South America, has fostered a cultural exchange that includes tobacco cultivation and cigar production.

Europe has a long history of cigar and tobacco consumption, dating back to the 16th century. This tradition has created a strong market for cigars and cigarillos in many European countries, particularly in places like Spain, Cuba, and the Dominican Republic, which have become renowned for their cigar production. Many European countries have relatively high disposable incomes, making premium and luxury products like cigars and cigarillos more accessible to a significant portion of the population. Cigars are often associated with luxury and indulgence, and Europe's wealthier consumers are willing to pay for quality. Europe has established distribution networks for tobacco products, which have facilitated the availability of cigars and cigarillos in various retail outlets, including specialty shops, tobacco stores, and even duty-free shops in airports. Europe attracts a substantial number of tourists from around the world, many of whom are interested in trying local or high-quality cigars. The combination of domestic demand and tourist interest contributes to the growth of the cigar market in Europe. While Europe has implemented strict regulations on tobacco products, these regulations have been relatively stable and predictable. This environment has allowed the cigar industry to plan and adapt to compliance requirements, enabling its continued growth. In some European cultures, smoking cigars is considered a traditional and social activity. This cultural significance contributes to the sustained popularity of cigars and cigarillos in the region. Europe offers a wide range of cigar and cigarillo brands and types, from domestic production to imports from countries like Cuba, the Dominican Republic, and Nicaragua. This variety caters to the diverse tastes and preferences of European consumers.

Based on the product types, cigars are seen as a premium product, associated with high-quality tobacco and craftsmanship. The time and care taken to hand-roll cigars contribute to their reputation for excellence.

Cigars have a long and storied history, often associated with luxury and prestige. Their tradition and cultural significance contribute to their dominance in the market. Cigars are frequently linked to celebratory occasions, important events, and rituals. Cigars offer a wide range of flavours, strengths, and sizes, allowing consumers to choose a product that best suits their taste preferences. This diversity appeals to a broad audience of cigar enthusiasts. Smoking cigars is often seen as an art and a ritual. The process of selecting, cutting, and lighting a cigar adds an element of sophistication and leisure to the experience. Cigar smoking is often a social activity, where people gather to enjoy a cigar and engage in conversation. Cigar lounges and clubs provide a communal space for enthusiasts to come together. Some cigars are considered collectibles, with rare and limited-edition releases fetching high prices. This collector's aspect adds to the allure of cigars. Cigars have cultural significance in various regions around the world. For example, Cuban cigars are celebrated for their unique flavours and are often associated with Cuban culture. A well-maintained cigar can be stored for an extended period, allowing consumers to build and curate a collection of aged cigars. Cigars have appeal beyond traditional tobacco users. They attract those who may not typically smoke but are interested in trying a cigar on special occasions. Cigar companies invest in branding, packaging, and marketing, which can create a sense of exclusivity and desirability for their products.

The tobacco flavoured cigar segment is expected to register the major revenue generation in 2022, driven by demand for original products and unique smoking experiences.

Smokers demand the original taste of tobacco than flavoured cigars. Demand for tobacco and unflavoured cigars are high among males and are anticipated to remain steady by the coming years as well. However, demand for flavoured cigars and cigarillos will be driven by the youth population and females due to their high preference for a variety of tastes. By flavour type, tobacco/no flavour accounted for the largest market share, in 2018. This segment is expected to continue its dominance over the forecast period. The total worth of this segment was USD 12.05 billion, in 2018 and it is expected to grow with a CAGR of 3.0% during the forecast period. No-flavour tobacco products followed by chocolate and vanilla are popular among the NORDIC population. Flavour-based products are expected to grow with a significant CAGR over the forecast period. The growing popularity of flavour products among young consumers is expected to drive this growth. Additionally, flavour products are expected to get traction among female consumers. The fruit-based flavour is the most popular among consumers; however, there has been a significant rise in sales of other flavours such as tea, wine, vanilla, and Jazz among others in the recent past. Cigars manufactured with natural tobacco leaves and flavourings from natural sources including fruits, herbs, and spices are included in the natural segment. Emerging economies are also driving the cigar market's natural segment. As living standards in these countries increase, consumers prefer natural and high-quality products. Food, beverages, and health and wellness products are all part of the expanding trend for natural products.

Based on the price range, the mass segment grabbed the highest revenue share, and it is anticipated that it will continue to hold that position during the anticipated time.

Mass range cigars are machine-made and are economical as compared to handmade premium cigars. Less cost of these cigars attracts more smokers toward mass range cigars. Also, due to their high availability, there is high demand for mass range cigars from young consumers. Besides, the availability of several flavours in mass range cigars will aid in driving overall market expansion. Young people enjoy large numbers of mass-produced cigars and young people like large numbers of mass-produced cigars. Those in the mass-produced category are machine-made and less expensive than products in the premium category. As a result, young consumers, exceptionally high school students, prefer mass-produced goods. Products in this category are available in various flavours, including mint, chocolate, menthol, and vanilla, and demand is growing. These factors are propelling the cigar and cigarillo market segment expansion. On the other hand, as the premium cigars are more of a lifestyle statement than anything else, demand for them is rising quickly. In addition to developed nations like the United States, France, and Germany, there is a growing market for premium cigars in emerging nations like China and India. China is one of the leading markets for premium Cuban cigars, so the industry is concentrating on expanding its market share through strategic alliances. For instance, in order to enhance the import of premium cigars, Habanos S.A. negotiated a contract with the China National Tobacco Corporation in 2017. The organization is putting a lot of effort into training its sales personnel and increasing spending to expand its distribution networks.

Global sales of cigars and cigarillos are expected to rise faster through cigar specialty stores over the decade as compared to other sales channels.

Cigar specialty stores have a valid license to sell and promote cigars. Moreover, they operate according to the guidelines of governments and have government-issued authority to sell cigars. Apart from this, consumers prefer purchasing cigars from authorized stores as they are assured of premium quality cigars with various options. Increased affluence has increased demand for premium products such as cigars. Meanwhile, celebrities' active advertising of these goods on media platforms is also significantly impacts smokers. However, demand for cigars and cigarillos will propel the youth and females due to their strong preference for diverse flavours. These stores often curate a diverse and high-quality selection of cigars, including rare and limited-edition releases. This curated approach caters to the preferences of discerning cigar enthusiasts and collectors. Maintaining the proper conditions for cigar storage, including temperature and humidity control, is crucial to preserving the quality and flavour of cigars. Specialty stores invest in optimal storage conditions, ensuring that their products are well-maintained. Many cigar manufacturers release exclusive products or blends that are only available through specialty stores. This exclusivity adds to the appeal of shopping at these locations. Specialty stores often provide a comfortable and inviting atmosphere for customers to enjoy their cigars. Cigar lounges or smoking rooms allow enthusiasts to relax, socialize, and savor their purchases on-site.

Market Drivers

• Growth in Disposable Income and Premiumization: One of the key drivers of the global cigars and cigarillos market is the increasing disposable income and the growing trend of premiumization. As economies develop and individuals have more discretionary income, they tend to seek out luxury and high-end products, including premium cigars and cigarillos. The perception of cigars and cigarillos as a symbol of sophistication and prestige has been bolstered by advertising and marketing efforts by manufacturers. This, in turn, has led to a surge in demand for premium and handcrafted cigars, driving the market's growth. Consumers are willing to invest in high-quality tobacco products, which have encouraged manufacturers to innovate and introduce a wide range of premium offerings to cater to this discerning clientele.
• Cultural and Lifestyle Trends: The global cigars and cigarillos market is also influenced by cultural and lifestyle trends. Smoking cigars and cigarillos is often associated with relaxation, socialization, and celebration. As these products are deeply rooted in cultural and traditional practices, they continue to be popular choices for various social occasions, such as weddings, parties, and celebratory events. Additionally, the rise of cigar lounges, where aficionados can enjoy their cigars in a comfortable and socially engaging environment, has contributed to the market's growth. The overall shift towards a more relaxed and experiential lifestyle, where quality matters, further fuels the demand for cigars and cigarillos as a leisure activity.

Market Challenges

• Health and Regulatory Concerns: One of the significant challenges facing the global cigars and cigarillos market is the increasing awareness of health risks associated with tobacco consumption. Governments and health organizations worldwide have been actively promoting anti-smoking campaigns and enacting strict regulations aimed at reducing tobacco use. This has led to concerns about declining consumption, as cigar and cigarillo manufacturers have had to contend with stringent packaging and labeling requirements, health warnings, and restrictions on advertising and promotions. Moreover, the looming threat of potential tax increases on tobacco products also poses a financial challenge for manufacturers and can impact consumer affordability and choice.
• Evolving Consumer Preferences: Evolving consumer preferences and changing demographics represent another challenge for the cigars and cigarillos market. Younger generations are often more health-conscious and may not embrace tobacco use as readily as previous generations. As a result, manufacturers need to adapt to these changing demographics and consumer tastes by diversifying their product lines to include alternatives such as cigarillos with different flavours or lower tobacco content.

Market Trends

• Flavoured Cigarillos and Innovation: One prominent trend in the global cigars and cigarillos market is the rise of flavoured cigarillos and innovative product offerings. Manufacturers are increasingly introducing a wide array of flavoured cigarillos, appealing to consumers who seek variety and unique taste experiences. These products often include flavours like vanilla, cherry, and coffee, attracting a younger and more diverse audience. The industry is also witnessing the integration of technology and innovation in cigar and cigarillo production, such as the development of unique packaging, humidification systems, and even mobile apps that connect cigar enthusiasts and provide information about products and events.
• Sustainable and Ethical Practices: Sustainability and ethical practices are becoming essential trends in the cigars and cigarillos market. Consumers are increasingly concerned about the environmental impact and social responsibility of the products they consume. As a result, some manufacturers are focusing on sustainable tobacco sourcing and ethical labour practices in tobacco production. These initiatives resonate with environmentally conscious consumers and can provide a competitive advantage. Additionally, the trend towards organic and additive-free tobacco is gaining momentum, further emphasizing the importance of transparency in the supply chain and product labelling.

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.

Key Developments

• In 2023, Cigar Accessories Innovation The past year has seen a rise in innovative cigar accessories intended to improve the smoking experience.
• In 2022, Focus on Organic and Sustainable Cigar Production With a growing emphasis on sustainability and organic practices in a variety of industries, the cigar industry has begun to adopt these principles.
• In October 2022, the General Cigar Co. will release CAO Vision 2022 in November. CAO Vision debuted in 2007 and then disappeared from the cigar market for 13 years before returning in 2020. The cigars were best known for their white, futuristic humidor, which lit up much like a laptop computer.
• In SEP 2022, Churchills announced the launch of its new range of cigars called ""Chesa Veglia"" in Phuket, scheduled to be held on November 4, 2022.

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 & Country-wise Cigars and Cigarillos market analysis
• Various drivers and challenges
• On-going trends and developments
• Top profiled companies
• Strategic recommendation

Regions & Countries covered in the report

• North America (United States, Canada, Mexico)
• Europe (Germany, United Kingdom, France, Spain, Italy, Russia)
• Asia-Pacific (China, Japan, India, Australia, South Korea)
• South America (Brazil, Argentina, Colombia)
• Middle-East & Africa (UAE, Saudi Arabia, South 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

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.