"During the height of the cigar boom, we were at a terrible disadvantage. We had a huge percentage of the marketplace in terms of total sales," says Rothman, "but overall our company was only receiving a small portion of the manufacturer's production increases. I think we were unduly discriminated against. Frankly, I think we were treated unfairly during this entire four or five year boom."

Certainly, others faired even worse. "Retailers were treated in [one of] two groups: Unfairly and much more than fairly," Rothman asserts. "Manufacturers decided where they would like their cigars to be." Their efforts to gain distribution at desirable retail locations was a major factor in allocating merchandise during the boom, says Rothman; even longtime accounts that did a good business in cigars, but which didn't meet a certain caliber of prestige, were left shortchanged.

The decision was based on the long-run health of the manufacturer's brands, says Rothman. "Get the people that are interested in selling the keystone brands, interested in selling their cigars. They could do that by giving them preferential treatment. I believe they certainly did do that, and they did that at the expense of distributors and what I would call non-upscale shops."

It could be an uphill battle to regain some of the lost channels. "Now they're paying the price for it, because they lost a lot of distribution." The question is, how do they go about getting that back? "Now they've all hit the street, going back to all the people that they 'did a job on,' trying to get buddy-buddy with them. In other words, now that stuff isn't selling so great, they want to be pals. It's not going to be an easy job. There's a lot of hard feelings."

Amid Glut, New Targeted Brands
Retailers bewildered by the avalanche of new cigar brands over the past several years may be surprised to learn that this year's RTDA Trade Show will once again serve as the christening ground for many new brands. Unlike previous years, though, familiar manufacturers and distributors will command a lion's share of the introductions, and price points will reflect the lessons of the marketplace.

The wholesale division of 800-JR Cigars, Cigars by Santa Clara, will in fact debut seven major new brands at the RTDA, "right into the face of oversupply," notes Rothman. "And they'll all sell." Most are names of Cuban decent that are already recognizable: Bolivar, Flamenco, Caba–as, La Corona, Maria Mancini, and Riata. Also, a new Casa Blanca Reserve and Rey del Mundo 150th Anniversary will be introduced. They'll cover a range of appropriate price points, and they won't be from countries that American consumers have never warmed up to, but leading favorites - the Dominican Republic, Honduras, and Nicaragua.

"I don't see any reason why you can't introduce a new brand right now," reasons Rothman. "If you put out a quality product at the right price in the right package, people will buy them. If you put out a piece of junk for $5, they won't buy them. That's the simple truth of the matter."

Several of his new introductions he's even pegged as "blockbusters," with beautiful packaging that didn't cost an arm and a leg. "My packaging is not expensive. It's the volume of the same box that we can make because our selling power allows us to make boxes at a very preferential price," he explains. Rothman ultimately thinks like the consumer, and knows that suppliers have been unrealistic in their pricing.

The Road Ahead
With the supply and demand imbalance having swung entirely around and increased competition on the retail level sapping per-store sales all around, it's little wonder that the health of the overall market has been obscured in the process. Previously bewildering growth notwithstanding, the market continues to show solid gains.

According to the Cigar Association of America, year-to-date imports of premium cigars through March are up 21 percent over last year. And year-to-date imports of all large cigars are up 17 percent over last year; highly respectable growth that would still be the envy of many industries.

Despite the growing pains, observers like Rothman, who have seen this industry - like any other - turn hot and cold, are optimistic that a number of solid years of growth still lay ahead. "I believe we have, give or take, another five to seven years of double digit growth in cigar consumption. I'm talking between 10 to 20 percent a year, as the baby boom continues to mature," Rothman anticipates.

An expanding population in the age group that matches the typical premium cigar smoker will help ensure respectable growth, says Rothman. "Really, our audience is people 40 and older. The percentage of the American population that will be over 45 by the year 2000 will be 38 percent." This is good news for tomorrow's cigar marketplace. "There are more older people than ever before in the history of our country. And there's more prospective people, to not only smoke cigars, but drink single malt scotch and do the things that older people do."

To survive in the new cigar reality will take patience and effort, particularly if local competition is fierce. Rothman believes the dedicated retailers will survive, that the age-old rules of retailing still apply. "They should do what every retailer should do: run a clean store with very fair prices and excellent service. If you do that, you will make it. There's no big secret to being a retailer."

Working with a dependable wholesaler, of course, is an integral part of that success. To Rothman, that's no big secret either. "We sell cigars faster, fresher, and cheaper than anybody else. And we have the largest inventory of premium cigars in the world."