This industry consists of establishments that primarily are engaged in the manufacture of cigars. Manufacturers of other tobacco items are treated in SIC 2111: Cigarettes; SIC 2131: Chewing and Smoking Tobacco and Snuff; and SIC 2141: Tobacco Stemming and Redrying.
Other Tobacco Product Manufacturing
The volatile cigar industry experienced dramatic growth due to increasing acceptance of cigar smoking among the "Generation X" population, a resurgence in "cigar evenings," and the popularity of the Internet, where cigars are sold in record numbers. The magazine Cigar Aficionado, introduced in 1992, is generally credited with the upturn in the cigar industry. No longer a passion for older men alone, changing demographics find "twentysomethings," both men and women, participating in cigar evenings and joining the 35- to 65-year-old traditionalists in the purchase of premium cigars. Celebrities also helped add to the allure, adorning the cover of Cigar Aficionado and showing up frequently at soirees flourishing "stogies." The Substance Abuse and Mental Health Services Administration (SAMHSA) reported in 2005 that nearly 14 million Americans over the age of 12 were cigar smokers.
However, by the early 2000s, the industry had cooled, and sales had flattened. The "Cigar Boom" of 1997, when imports peaked at 400 million, gave way to early 2000s numbers only in the 200 million range. However, in 2004, the numbers began flirting with the 300 million mark again with 286 million premium cigars. By 2005 sales jumped by about 15 percent in the United States that resulted in nearly $3 billion in retail sales. Just as this trend began to take hold, the industry was hit with the effects of the Fair and Equitable Tobacco Reform Act of 2004 (FETRA), which mandated industry assessments over the next ten years.
According to the U.S. Census Bureau, approximately 94 establishments operated in this category (which also includes chewing and smoking tobacco and snuff along with reconstituted tobacco) for part or all of 2005. Industry-wide employment totaled approximately 6,875 workers receiving a payroll of more than $296 million. Companies in this industry tended to be smaller in size with nearly 59 percent employing less than 20 workers while only 16 percent have greater than 500 employees. The Annual Survey of Manufactures reported that overall shipments for the tobacco product manufacturing industry (also including cigarette manufacturing) were valued at nearly $42 billion in 2005, an increase from the 2004 total of nearly $38 billion. Additionally, for the overall industry a total of 14,036 employees worked in production in 2005, putting in nearly 29 million hours to earn wages of nearly $783 million.
The 2002 Economic Census for manufacturing industries, updated every five years by the U.S. Census, indicated that the industry's total value of shipments (also including chewing and smoking tobacco and snuff along with reconstituted tobacco) was at $3.6 billion, up from nearly $3.1 billion in 1999. Specifically, the value of product shipments for cigars stood at nearly $794 million in 2002. The value of all segments in 2002 totaled nearly $4.0 billion, relatively similar to the 1997 total. Also, while the other tobacco product manufacturing industry comprised 9 percent of the value of shipments of the overall tobacco...