During the third week of June, Davidoff held their yearly Press Conference, announcing how 2018 was in terms of market shares and number of cigars sold. Among the brands in their portfolio, they registered an increase of +4.6% for Davidoff, a +7.4% for Camacho and an impressive +15.6% for AVO(not by chance AVO won the best Dominican cigar of 2018 with the AVO EL05 30 years in CigarsLover Magazine 2018 Awards). After the presentation, we had the pleasure to sit down and have a talk with Beat Hauenstein, the CEO at Davidoff.
Michel: “after two years as Davidoff’s CEO, what has been the most challenging project so far?”
Beat: “you ask me for the most challenging one. Let me start with the first and most beautiful one. This was the opening of the Maison Davidoff, our global Head-office here in Basel, upon my nomination as CEO in fall 2017. The most challenging project so far has been our „Way Forward” Transformation Program launched in April last year. It represents the organization’s consistent focus on the changing environment, such as regulations, pressure on margins in the industry, digital transformation and continuing high pace product innovation. Within our „Way Forward“ Program we have defined a five year transformation road-map, with benchmarks for business growth and operational improvements. The „Way Forward” Transformation Road-map is based on four pillars and covers the areas of brand, commercial, efficiency and leadership/culture. With our five-year plan, we want to secure and further expand our leading position in the premium handmade cigar and wholesale business, in order to continue delivering our premium promise to our customers and partners worldwide and delight and surprise our aficionados with innovative cigar blends.
Michel: “how are the regulations affecting the cigar world and what are you expecting to happen in the near future?”
Beat: “regulations won’t soften in the future, it will be the other way around. What hurts the cigar industry most, is the ban from a geographic point of view, forcing the aficionado outside, which in return can mean that he, due to the weather, might not be smoking a cigar at all. As said before the regulations are affecting the tobacco industry a lot, with huge consequences in terms of resources to cover all the regulations in order to be compliant in as many markets as possible. Being quick and compliant to the changing market needs will be the future key for success. Here, our philosophy “from crop to shop” has helped and will help us also in the future to be able to quickly adapt to upcoming changes. There is nothing romantic about it, but it is an important part of the business, that has increased tremendously over the years.”
Michel: “did you notice some differences among the US, the European and the Asian markets? Are there any changes in terms of growth, or product preferences?
Beat: “overall, global consumers are in a majority looking for mild to medium bodied cigars and that is where the growth comes from.
From a taste preference, the United States show a sizable segment of demand for fuller bodied and spicy cigars. Asia and Europe both are looking for sophisticated medium bodied cigar blends.
From a size perspective, we see a global shift to preferences for larger format cigars like the Toro size.
From a growth perspective, the US and Asia, fueled by China, are showing the strongest developments. Europe is growing but at a slower pace.”
Michel: “every year you release a cigar completely dedicated to the Chinese Calendar. How important is the Asian market?”
Beat: “Our Limited Editions dedicated for the Chinese Calendar are a great success, not only in Asia, but also in the US and Europe. We are definitely looking forward to the next edition, the Year of the Rat.”
Michel: “what are Davidoff’s plans for the future?”
Beat: “as a company, we want to remain the innovation leader in the global premium cigar market, remain an independent family company and to be the leading cigar producer in the premium hand-made cigar industry.”
Michel: “a personal question. When the CEO from Davidoff decides to relax and enjoy a cigar, what do you smoke and why?”
Beat: “I enjoy cigars on many occasions: Sometimes to celebrate a special occasion (success, or celebration) with friends, consumers, employees, sometimes after a long working day on a sunny evening in our garden, together with my wife.
I have many favorite cigars, however, what I smoke really very much depends on the occasion and also my mood. Say, last weekend for example, I enjoyed the Davidoff Robusto Real Especiales 7, the new Davidoff cigar which we launched in April and which I really do like a lot. As you may know, this cigar consists of all tobaccos which can be found in the Davidoff Core range. Also, I am quite a big fan of the Royal Robusto, Aniversario 3 and the Winston Churchill Late Hour.”