The Peak of the 90s

A lot of people remember the days of the Cigar Boom back in the 1990s.  A lot of people also take credit for the cigar boom, whether it be cigar companies, celebrities, or even cigar magazines.  But a lot of people also often forget the lessons that came with the Cigar Boom and the bubble burst that destroyed so many boutique cigar companies.  And this has begun to lead many people familiar with today's events and the events of the 90s to question whether or not we are heading in the same direction.  But to me, it seems that although we may be heading in that direction, the same mistakes will not be made.  After all, we're not the US government, we actually learn from our mistakes, right?

What killed the cigar industry in the 90s?  I am sure there were plenty of things, but the main point was the high demand for quality product with such a limited supply.  And with this, these new boutiques (and even larger companies) were paying obscene premiums for tobacco they used to get so cheaply.  So when there was a shortage and prices were sky high, everyone was charging the same high price.  However, once tobacco had aged enough and the supply of quality leaves came back, these prices plummeted and a lot of these companies that couldn't cut prices died in the process, killing a lot of the industry.  But, although we saw many promising companies fail, we also saw a lot of better ones make it through and with them they brought many lessons.

The best lesson these owners and managers brought out of their experience during the Boom was that you must have supply and inventory, and lots of it.  Now, you hear about fires burning hundreds of barrels of tobacco at a company's factory, only to think that they will suffer as a consequence.  But through their experience from the 90s, they have enough tobacco to last them five or six years, and they have barrels scattered throughout many locations.

So are we seeing another Boom?  Perhaps, but those in a position to avoid a bubble burst are taking great strides to ensure that we won't see another demise, and in my opinion, they are doing a wonderful job of preventing it.

Mike