Recently (OK, relatively recently) in an interview on Cigarreader.com, Pete Johnson of Tatuaje Cigars (you can read some Tatuaje reviews if you are interested) discussed cigar futures. His project started in 2008 when he created La Vérité and L’Esprit de Vérité. In 2009, he created new editions of both. Since the products have been waiting for over a year to be released, that means they represent vintage cigars aged to excellence.
Right now you can purchase futures of these vintage 2009 cigars. That means you can pay for the cigars now at a discount, while they continue to age till late June. You must wait for the cigars to be released to you, but you will be charged when you place the order. This is similar to the concept of wine futures, also called en primeur. Wine futures have been popular for a long time and involve purchasing a wine at a discount price while it is still in the barrel, usually a year or more before it is bottled and released on the market. Since the aging increases the value of the wine, the wine is more expensive when purchased in stores by customers later.
So it makes sense to apply the same idea to cigars. Cigars, like wine, improve in quality as they age. Pete Johnson explains in his interview that he himself enjoys investing in wine futures to receive vintage wine at a discount, which was part of how he came up with the idea to create cigar futures.
The earlier you purchase a cigar future, the more money you save. In the case of the 2009 La Vérité and L’Esprit de Vérité, customers who purchased the first tier between March 16 and April 15 were able to save 40%. Customers who participated in the second tier which ran between April 16 and May 15 were able to save 20%. Customers who purchase the cigars anytime between May 16 and June 15 will be able to save 10%.
There are advantages to this process all around. When you buy cigar futures, you are in a sense investing in the cigar company. The cigar company enjoys the benefit of your investment, resulting in a steadier flow of money throughout the growing season and manufacturing cycle, particularly in the case of vintage cigars, which need to sit for a certain amount of time before release. For you the benefit is to be able to purchase premium vintage cigars at huge savings. With a system that involves multiple tiers like Pete Johnson’s, you get to choose how long you’re comfortable waiting for your cigars, which will determine how much money you will be able to save.
As with wine, there is also a certain aspect of collectibility that goes with premium cigars, especially vintage cigars. In the case of La Vérité and L’Esprit de Vérité, for example, cigar aficionados will be looking at a very limited release. Getting in on the futures secures your opportunity to enjoy a limited edition cigar which may be pretty hard to get your hands on otherwise.
Cigar manufacturers, like farmers and wine makers, are constrained in some sense by growing seasons and other timing factors which are out of their control. Those who want to offer high quality vintage products have a long wait before they can start pulling in profits. Cigar futures would give these manufacturers a chance to collect profits “off season.” That means that for a discount, you not only get to enjoy a premium, vintage, limited edition cigar, but you also have the pride of knowing that you have personally contributed to the health of the industry and your favorite brand with your investment. Hopefully after Pete Johnson’s experiment, we will see a few more manufacturers start to offer cigar futures—this is a trend that could have great results for manufacturers and customers alike.Powered by Sidelines