Cigars and Cigarillos: A Growing Industry in India

India has seen rapid growth in the consumption of cigars and cigarillos in recent years. While cigarettes still dominate the tobacco market, the cigar category is expanding at a fast pace attracting new users as incomes rise.

The Size of the Indian Cigar Market

According to industry estimates, the Indian cigar market was valued at around Rs. 800 crores in 2021. This represents a compound annual growth rate of over 10% in the last 5 years. While cigarette consumption has remained relatively flat, the higher profit margins and premium image associated with cigars have fueled their popularity. It is projected that cigar sales in the country will cross Rs. 1200 crores by 2025 led by expanding offerings from leading companies.

Cigarillos currently account for around 60% of the total cigar category volume in India. Their smaller size and lower price point compared to regular cigars make them more accessible for new consumers. Premium cigars priced above Rs. 100 see more restricted demand but have grown the fastest in value terms. Overall, the increasing availability of international brands through duty-free retailers and e-commerce is attracting many upmarket Indians towards cigar smoking.

Popular Cigar Brands

Some of the biggest selling cigar and cigarillo brands in the Indian market include:

- Bengal Sweets: One of the earliest domestic players, Bengal Sweets dominates the inexpensive Indian hand-rolled segment. Its machine-made cigarillos are omnipresent across local stores.

- Partagas: Owned by global giant Imperial Brands, Partagas remains the top-selling imported cigarillo in the country. Its machined short filler cigars come in a variety of flavors.

- Romeo y Julieta: Produced by Habanos SA, RyJ offers authentic hand-rolled long fillers and is a top choice among aficionados.

- H. Upmann: Another Habanos brand, H. Upmann conjures vintage charm through its traditional cigar products.

- Monte Cristo: Montecristo, also from the Habanos portfolio appeals to the young urban smoker with its eclectic cigarillo line.

- Cavalier: A homegrown premium brand, Cavalier handcrafts premium longfillers and has expanded overseas.

- Macanudo: One of the earliest American cigar brands available in India, Macanudo caters to the mild-smoking novice.

Growth Drivers for the Indian Cigar Market

In the subsections below, we discuss some of the key trends that are fueling the rising popularity of cigars in India:

Rise of the Premium Smoker

As incomes increase in India's large middle class, more people are willing to spend on luxury items that signify status and distinction. This premiumization effect is clearly visible in the cigar space, where exclusive high-price varieties are finding many new buyers. India Cigars And Cigarillos aficionados regularly discuss their choices on social media, fueling further interest.

Increased Retail Presence

Until a decade ago, cigars had limited availability outside specific stores in metro areas. However, many new cigar lounges and walk-in humidors have sprung up in major cities across India recently. Several multi-brand retailers now have entire sections dedicated to showcasing international cigar offerings. This expanding distribution network has brought the category to the mainstream.

Growing Influence of Culture

Bollywood and popular culture have incorporated cigars as a symbol of wealth, style and connoisseurship over the past few years. Various luxury lifestyle brands also feature cigars in their high-end campaigns, spreading associated prestige in the minds of impressionable audiences. This works favorably for brands seeking new passport smokers.

Duty Advantages

Unlike cigarettes that attract significant taxation, hand-rolled premium cigars and cigarillos are subjected to much lower import duties in India under current regulations. This price edge compared to cigarettes benefits the cigar industry by making premium products more competitive for the common smoker.

Social Media and Promotions

Leading cigar companies actively promote their brands online through targeted campaigns on Facebook and Instagram. Influencers are hired to showcase product photography and sampling experiences. Such digital engagement helps build awareness and a following among younger city populations. Offline launches and celebrity endorsements further aid consumer connect.

Widening Product Range

looking to tap various price segments, manufacturers now provide a diverse selection of cigars, cigarillos and cigarette-sized cigars in India. Flavored varieties, cross-promotions with alcohol and discounted multi-packs have opened the category to experimental users. This assortment coupled with affordable pricing fuels repetitive purchase.

Driven by rising affluence, enhanced accessibility and visionary marketing by global players, cigars and cigarillos have securely established themselves in the Indian tobacco space. With organized retailing expanding coverage and culture playing a role, the category seems positioned for continued double-digit growth over the next five years. Premiumization and new product introductions will remain key strategies for companies to attract young urban smokers and stay ahead in this lucrative market.

Get more insights on India Cigars And Cigarillos
Also read related article on Scottish Whisky Market