During the last five years luxury goods have continued to sell well, even while the rest of the economy flounders. However, this is not just limited to fancy handbags and fast cars. No, one of the best performing luxury-goods sectors during the past five years has been tobacco; in particular, cigars. Obviously, this has been great news for big tobacco companies that sell cigars, such as Imperial Tobacco (IMBB.Y 0.43%) and Altria (MO 0.56%) both of which are heavily involved in the production and sales of cigars. In addition, tobacco supplier Universal Corp (UVV 0.22%) has benefited as the consumption of tobacco increases. However, this has not been good use for the worlds largest cigarette company Philip Morris (PM 0.41%), which does not have its own line of cigar's. 

According to the Centers for Disease Control, the consumption of cigars expanded by a staggering 123.1% during the period of 2000 to 2011. Furthermore, this explosive growth shows no signs of slowing down as Cuban cigar sales jumped 9% during 2011 and 4% during 2012. Sales stand at $416 million going into 2013.

Cuba has a reputation
One of the companies that has the greatest exposure to the global cigar market outside of the United States is Imperial Tobacco. Imperial Tobacco jointly owns the Cuban cigar producer Habanos, and its partner-in-crime in this venture is none other than Cuba itself.

Habanos sells its cigars in 150 different countries and it contributed, at current exchange rates, $25 million to Imperial's bottom line on sales of $83 million during fiscal 2013.

Habanos has about 80 percent of the world's hand-rolled premium cigar market outside the United States. However, due to the United States' 50-year-long trade embargo against Cuba, Cuban cigars cannot be sold legally within the US -- the world's largest cigar market. Javier Terres, vice president of Habanos, stated back during 2012 that 220 to 250 million cigars are smoked annually within the US, which is estimated to cost Habanos around $79 million in sales.

Global expansion, domestic contraction
That being said, this is great news for Altria, which has its own cigar division. However, although the volume of cigars sold around the world expanded during 2012 by 4%, sales of cigars within the US actually declined.

In particular, according to data supplied by Reynolds American, around 8 billion units (cigars) are expected to be sold in total within the US during 2013. This figure is down from around 11 billion units sold during 2010. Meanwhile, the global consumption of cigars is expected to hit 22.7 billion units by 2018. It's easy to see the trends developing here along with why international companies are set to benefit significantly more than domestic producers.

Haven't you left something out?
At this point you could be asking where Universal fits into all this. Well, Universal sources, sells, and produces tobacco leaves, which means that the company has no allegiance to any one tobacco product. As a result, if the tobacco market does well, so does Universal. It would appear that Universal is doing extremely well for itself.

Specifically, Universal has recently embarked on a program to increase its tobacco leaf and production capacity within Mozambique. Similarly, other smaller-scale projects are currently in development in several other countries to enhance local processing and leaf services. All in all, the company plans to spend $50 million increasing its processing capacity this year.

Biggest is not best
However, this is one area where Philip Morris, a leader in the tobacco world, has missed out. You see, while the company owns the rights to and produces seven of the top 15 international brands in the world, the company's non-cigarette tobacco business is limited. For example, according to the company's website, the only interests Philip Morris has in what it calls other tobacco products, or OTP, are cigar businesses in Australia and New Zealand, as well as the company Swedish Match South Africa and the fine-cut tobacco brands Interval and Petterøes in Europe.

Foolish summary
So then in summary, luxuary goods have been best sellers during the last few years while the rest of the market struggles and cigars are no exception. Nonetheless, investors need to be careful where they place their bets as while the international cigar market is growing rapidly, and is set to continue doing so, sales of  cigars within the United States are falling. If investors would like to gain some exposure to this luxury, lucrative and rapidly growing market, Imperial Tobacco or Universal corp would be the best bets.