Oettinger Davidoff flying high: CEO Beat Hauenstein on record years, specialist retailers and the future of premium cigars

Die Tabak Zeitung// Oettinger Davidoff celebrates record years and confidently holds its own in international competition – despite stricter regulation and global uncertainties. How does this traditional company manage to combine innovative strength, top quality and entrepreneurial flexibility so successfully? In an exclusive interview with DTZ, CEO Beat Hauenstein provides insights into the company’s success strategy, talks about the challenges it faces and explains why committed specialist retailers are crucial to the future of the brand.

Mr. Hauenstein, Oettinger Davidoff can look back on several record years. In your opinion, what were the main factors behind this continued success and how do you manage to hold your own in the face of cut-throat global competition?

Beat Hauenstein: We can indeed look back on very successful years and the 2024 financial year was the second-best result in this millennium in terms of profitability after 2023. These good results are the result of the excellent work of around 4,000 employees worldwide, who are passionately committed to consistently high quality, innovative cigar blends and unique brand and shopping experiences. And, of course, by consistently adhering to our “Crop to Shop” philosophy, which allows us to monitor and, above all, control every step of the value chain. This allows us to keep our ‘machine deck’, as I like to call it, under control, as this is the only way we can successfully master the complexity of the handmade premium cigar business.

The tobacco industry is constantly faced with new regulatory requirements, such as the TPD3 in Europe and the FDA regulations in the USA. How do you assess the situation and are there specific measures you can take to remain flexible as a business?

Hauenstein: The business with handmade premium cigars is not as romantic as one might imagine due to the diverse and inflationary regulations behind the scenes. However, the regulations are now part of our everyday life and we are doing everything we can to be compliant in as many markets as possible, currently in over 130 countries (to be visible on the market in a legally and ethically correct manner; editor’s note). We achieve this with a great deal of commitment and, above all, with a great deal of passion.

Last year, you described the complex implementation of the Track & Trace system and its challenges. What experiences and improvements have resulted from this, and do you also see opportunities for efficiency and transparency gains in your supply chain as a result of increasing digitalization?

Hauenstein: Track & Trace was primarily developed by the EU to curb smuggling in the cigarette industry. The cigar industry, on the other hand, has never had a problem with smuggling, which means that the implementation of Track & Trace is completely oversized and unnecessary, misses the mark and primarily affects the industry, which is characterized by family businesses, with high additional costs and no great additional benefit. It was the same for us. There are very few advantages to Track & Trace, but these are out of all proportion to the effort involved. For example, the fact that errors due to under- or over-delivery are virtually eliminated or that we can always trace which sales unit was sold to which customer.

You repeatedly emphasize the importance of the “Crop to Shop” philosophy. In view of geopolitical uncertainties, climate risks and global supply chain problems, how do you ensure that the quality and availability of raw tobacco is guaranteed in the long term?

Hauenstein: Our crop-to-shop philosophy enables us to monitor and control every step in the value chain in order to ensure the consistent top quality of our products. This control also allows us to react quickly and agilely to changes in the market. We also have one of the largest tobacco warehouses in the world – a total of 2600 tons of tobacco – so that we can compensate for possible crop failures and ensure the various cigar blends in the long term.

Many markets are considered saturated, yet there are new target groups – such as younger adults and women. How are you responding to these developments with your brands and innovations, and what role does the Zino brand play in this?

Hauenstein: The Zino brand, which has been around since the 1970s, was relaunched in 2021 and appeals to newcomers and younger, adventurous adults with the blend and the “Live Life from A to Z” marketing campaign. And yes, we are also seeing more and more women enjoying the pleasure of cigars.

Iast year, you emphasized how essential specialist tobacco retailers are for Davidoff. How are you developing your partnerships there, and do you see a need for action in terms of customer experience and advice in view of the growing number of online offerings?

Hauenstein: Our specialist retailers and partners are the ambassadors of our brands and our products. Accordingly, we attach great importance to close and open cooperation, and with the Davidoff Academy we provide our partners with extensive information about our brands and products. In addition to online offers, we naturally continue to focus on the customer experience in the store itself, but also at events that we organize in cooperation with specialist retailers.

Limited editions, new blends and creative formats characterize the image of Davidoff. How do you strike a balance between tradition and innovation, and are there already exciting new products for 2025 that connoisseurs can look forward to?

Hauenstein: Tradition and innovation must go hand in hand. The “Davidoff 2000” has been the best-selling Davidoff cigar for years, while new limited editions expand the range and are particularly popular as gifts. This year, in addition to our “Winston Churchill Limited Edition”, we recently launched the “Escurio 10 Anniversary Limited Edition”. A cigar that has been matured in a single-malt scotch whisky barrel. Further limited editions will follow in the fall and, of course, the “Year of” limited edition at the end of the year.

There is an increasing focus on sustainable tobacco production and social commitment. What specific projects does Oettinger Davidoff pursue with regard to environmental and social standards in the countries of origin?

Hauenstein: We have always offered our employees in the Dominican Republic and Honduras good and extensive working conditions. These include, for example, a medical service for all employees and their families, transportation to the factory and, since 2023, a learning center in the Dominican Republic, where around 160 children of employees currently receive free English lessons. In the ecological area, we introduced drip irrigation in 2023 and equipped the production facility in Honduras with a large-scale solar system. Photovoltaic installations will also follow next year in the Dominican Republic. We are also happy to skip a planting cycle so that the soil can regenerate.

Where do you currently see the greatest impetus for growth – are you also thinking of regions such as Asia or the American continent? Are there markets in which you want to make targeted investments or expand your presence?

Hauenstein: The biggest growth markets are the USA and Asia, but also global travel retail. However, since last fall, consumer sentiment has been strongly influenced by a variety of uncertainties and people are increasingly turning to cheaper alternatives.

What drives you personally as CEO, and what long-term goals do you have for Oettinger Davidoff, especially against the backdrop of a challenging market environment?

Hauenstein: My passion for cigars is my driving force and success gives me energy and joy. My goal is to ensure that our family business, which is celebrating its 150th anniversary this year, remains the world’s leading manufacturer of handmade premium cigars in the future and that we continue to delight and surprise our customers with new taste experiences.

Mr. Hauenstein, thank you very much for the interview!