Cigar-maker ramps up even as vaping device hits dead-end in India

Even as manufacturers of electronic nicotine distribution devices find themselves caught between a rock and a hard place as the government announced an executive order last month banning the sale and production of all e-cigarettes, in quick response to the rapidly escalating concerns worldwide over health risks associated with the smokeless nicotine devices that younger smokers were adopting, other niche manufacturers of tobacco products are seeing better days.

Gurkha Cigars, a traditional purveyor of tobacco-products is seeing its Indian entry gain momentum, as it starts sales through a duty free store at the Mumbai Duty Free store in Mumbai's International airport weeks ago.

Gurkha, having built a sales network in the past two years through partnerships and lounges in over a dozen five star hotels across Chennai, Kolkata, Pune, Mumbai, Delhi, Kolkata, and Bengaluru.
 

Typically import duties for cigars are at 120 per cent, which makes the duty-free store a cheaper option for smokers, says Viraf Hansotia, who manages Gurkha's distribution for India.

The firm, founded in 1989, is headquartered in Miami, Florida, and run by Mumbai-born entrepreneur Kaizad Hansotia (pictured). It  kicked off its entry to the subcontinent in 2016 and so far the company, named after a regiment of Nepali commando soldiers, has sold more than 20,000 cigars in India annually.

Milind Pandit, who works with Flemingo Travel Retail and oversees the cigars division for them at the Mumbai Duty Free shops, says the quality of non-Cuban cigars has improved over the years and customers are aware that it doesn't have to only be Cuban to be a great cigar. Pandit also sells Cuban cigars in his store.

Founder Kaizad Hansotia says that the market in India is worth between Rs 35 crore and Rs 70 crore including domestic products. He expects to garner 25 per cent of that in a couple of years. Gurkha's cigars are made from Nicaraguan, Dominican and American tobacco and priced between Rs 2,000 and Rs 4,000 with top-selling products including Gurkha's Grand Reserves, Cellar Reserve 15-year-old, Royal Challenge Naturals, and the Cellar Reserve 18-year old special. “Our marketing strategy is word of mouth and the product itself,” Hansotia says, adding that the distribution was not ready for cigars and so they had to create it by putting it into hotels and gift shops for the future.

Gurkha is distributed by Creative Consulting based out of Mumbai. Customers have included Bill Clinton, Arnold Schwarzenegger and Sylvester Stallone. Here in India, the userbase has included mostly business heads as well as representatives from Bollywood to include Sanjay Dutt.

Chaitanya Pande, a cigar aficionado who has sampled most popular brands, says the majority of manufacturers use very young tobacco while Gurkha processes aged leaves. "Distribution is where it needs to get a leg up, especially on a countrywide scale," Pande says."Cigars also take time and interest for users to get accustomed to, which means it's a business and a habit that grows organically."

Are Gurkha's officials concerned about the growing awareness on tobacco and its harmful effects on health? "You'll never see a chain cigar smoker, just as you will never see a cigarette club because the idea is about responsibly enjoying the finer things in life," says Hansotia.