Davidoff’s Continuing Evolution | Tobacconist magazine

Davidoff’s Continuing Evolution

By Stephen A. Ross

In 1875, Max Oettinger opened his first cigar shop in Basel, Switzerland. Selling imported cigars, tobaccos, cigarettes, pipes and smokers’ accessories, Oettinger’s store became one of the top tobacconist shops in Switzerland by the beginning of World War I. The business grew, took on several more shops and a wholesale concern, and became known as Max Oettinger AG. Times change, however, and in the 1920s economic difficulties led the company to sell its retail operations to concentrate on its distribution arm. By 1970, the company, then led by Dr. Ernst Schneider, purchased Zino Davidoff’s legendary shop in Geneva and started promoting the Davidoff brand name worldwide.

Now known as Oettinger Davidoff AG, the company is celebrating its 140th anniversary in 2015. While thriving in the ever-tumultuous premium tobacco business might not be a big deal for anyone but the company’s employees and global business partners, it’s Oettinger Davidoff’s ability to evolve that’s mighty impressive.

For much of its history, all of its cigars were made in Cuba, but beginning in 1991 production was switched to the Dominican Republic. Today the company also owns the Camacho factory in Honduras and plans to open another factory in Nicaragua.

At one time, Oettinger Davidoff’s only premium cigar line was Davidoff, but now the company markets and distributes eight brands, including Avo, Zino Platinum, The Griffin’s and Camacho.

Davidoff C

Along with the changes in its production and the brands the company sells, Oettinger Davidoff AG has switched its marketing efforts from sports, like the Swiss Indoors tennis tournament, to support for the arts. It has aligned itself with the three international Art Basel art shows and established an art residency in the Dominican Republic. Updating its retail concepts, Oettinger Davidoff AG has expanded its global presence, inviting more guests to experience “Time Beautifully Filled” inside a growing network of Davidoff Flagship stores and Davidoff Appointed Merchants.

Overseeing the changes within the company is Hans-Kristian Hoejsgaard, who came to Oettinger Davidoff in 2011 after spending years working with companies in other luxury brand segments. When he accepted the position at Oettinger Davidoff AG, Hoejsgaard accepted an immense challenge—leading the still family-owned multinational company into the 21st century.

While appreciating Oettinger Davidoff’s history, Hoejsgaard and his staff realized that the company needed to evolve if it hoped to add to its legacy. Many of the changes involved important but less than sexy behind-the-scenes maneuvers that made the organization more efficient. Oettinger Davidoff also underwent a period of self-examination and identified new markets to explore while considering how they could keep the company and its brands relevant in an ever-changing environment.

These changes and the self-examination led Oettinger Davidoff to develop a new series for its Davidoff brand, the Discovery line, which debuted two years ago with the release of the very popular Davidoff Nicaragua and continues this year with the release of Davidoff Escurio.

“This is an important year for us,” Hoejsgaard comments during a break from the show floor at the IPCPR show. “We are now in the second phase of the Davidoff resurrection with the Davidoff Escurio, the second pillar in the Davidoff Discovery line. The Davidoff Nicaragua was the first pillar in the Discovery line. It has met tremendous success and we are now building that part of the brand.”

Hans-Kristian Hoejsgaard

The company is also in the midst of an ongoing revolution—revamping or tweaking several of its existing brands. Retailers and consumers first witnessed the fruits of the self-examination with the 2013 relaunch of the Camacho brand. The result has been a tremendous success, and now the Davidoff core line, more commonly known as White Label, and the Avo series are undergoing their own transformations.

“We are revitalizing the core lines with the all-new Winston Churchill,” Hoejsgaard continues. “It has been a fabulous success for us around the globe, and in the first six months it has actually been bigger for us than Davidoff Nicaragua. The success is not completely comparable, though, because the Davidoff Nicaragua is introducing new customers to the Davidoff line. We have a lot of new customers with the new Winston Churchill line as well, but a higher percentage of the Winston Churchill smokers are those who are already regularly smoking Davidoff White Label cigars.”

With the successful revitalization of Camacho and Winston Churchill, Oettinger Davidoff turned its attention to its Avo brand. While Avo has been one of the most-loved and best-selling brands in the United States, it was beginning to look a little stale in comparison with other Oettinger Davidoff brands.

After months of studying the market and discussing Avo cigars with retailers and consumers, Oettinger Davidoff AG prepared the brand for a makeover. While the Avo blends remain unchanged, Oettinger Davidoff streamlined the brand to 35 SKUs within its four core expressions—Avo Classic, Avo XO, Avo Domaine and Avo Heritage. The company also lowered the price point on some of the cigars and reduced the box sizes for most Avo cigars to 20-count boxes from 25-count boxes, making a box of cigars anywhere from 10 to 30 percent less expensive. The packaging and communication platform have been updated as well, and Oettinger Davidoff has also committed to protecting its brick-and-mortar retail partners by placing price guarantees on all Avo cigars.

“The changes we made with Avo are more of an evolution than in the case of Camacho, which was more of a revolution,” Hoejsgaard explains. “It’s still about Avo, wood boxes, music—all that equity remains—but the changes have resonated with retailers and we have seen a surge in retailer interest in the Avo line.”

Proof of retailer and consumer support is readily available. There’s been a significant upsurge in the number of retailers requesting Avo events in their stores.

“We thought that if we could do 100 Avo retail events in the United States this year then we would be off to a great start,” explains Scott Kolesaire, Avo brand manager. “By the middle of July we have already completed 176 events. That shows that the retailers are behind the brand. We involved them in our discussions from the very beginning, and they appreciate that. One of the great things about the Avo brand is the passion that the retailers have for it. There are not many brands like that out there. Everyone loves Avo. It has been one of the staple premium cigars for nearly 30 years. We have seen huge excitement from our retailers and consumers surrounding the new rebranding. The brand is selling, retailers are reordering, and we couldn’t be more pleased about embarking on this new era.

Davidoff

Reintroducing a much-loved brand would normally be enough work to keep plenty of folks busy—but not Oettinger Davidoff. The company also introduced Avo Syncro Nicaragua at the IPCPR show. Avo Syncro Nicaragua is the fifth regular line for Avo cigars, joining Classic, Heritage, XO and Domaine. Unlike the other regular production cigars within the Avo brand, Avo Syncro Nicaragua cigars are box-pressed. Avo Syncro Nicaragua contains Nicaraguan tobacco, which is another departure from other Avo cigars. The rest of the blend consists of an Ecuadorean Connecticut wrapper and a Dominican binder. Avo Syncro Nicaragua cigars are available in four sizes: Short Robusto (4 x 52), Robusto (5 x 50), Toro (6 x 54) and Special Toro (6 x 60).

“We have been working on Avo Syncro Nicaragua for quite some time,” Kolesaire explains. “We wanted to venture off to Nicaragua and step out of Avo’s comfort zone. We are moving outside the classic, predominantly Dominican flavor profile of Avo. It’s the first box-press cigar produced by our factory. Syncro is a completely new pillar for the brand. Future product launches will continue to build upon the name and concept. Syncro is about fusion—in this case, the joining of Nicaraguan and Dominican tobaccos. It’s still classic, like the rest of the Avo brand, but with an even more modern look and feel.”

The Avo brand is classically inspired but contemporary in outlook, and the same could be said for the company that makes them. Now 140 years old, Oettinger Davidoff possesses a rich legacy to place it as one of the world’s top premium cigar manufacturers. It got to its exalted position by being forward-thinking, innovative and daring, and it’s likely to remain there because of its willingness to continue its introspective approach. Rather than wither and die through strict adherence to the status quo and following the safest route, Oettinger Davidoff is thriving thanks to its evolutionary approach.

For Hoejsgaard’s take on the eventual opening of Cuba’s cigar market to the U.S. and an interview with renowned master blender Hendrik “Henke” Kelner, check out our full digital version by subscribing today.

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