A baby is only a baby -- to paraphrase Rudyard Kipling -- but a good cigar is a smoke. These days moreover, a good cigar company can be a gold mine, if only because a lot of erstwhile babies are reaching the cigar-smoking age.

Alex Brainard, president and one of the new owners of Consolidated Cigar Corp., is a case in point. He himself was 44 before he took up cigar-smoking. Now, as head of the world's largest cigar manufacturer (with sales of about $130 million in 1982), he takes comfort in the knowledge that cigars are indeed for the mature smoker. The post-World War II "baby boom" generation has begun to hit middle age -- which means that Consolidated's market is about to explode.

The baby-boomers -- 76 million Americans born from 1946 to 1964 -- began turning 35 two years ago, and another 43.5 million will do so during the next decade. As Brainard points out, "The older a man grows, the more likely he is to smoke a cigar, and the more cigars he's likely to smoke." (Women, of course, are another story.) Overall, 5% to 6% of smokers under 35 years of age choose cigars, and they average 20 cigars a week. In contrast, 9.5% of those over 35 smoke cigars, at an average rate of 35 cigars a week. "The number of males in the over-35 group has been relatively stable -- about 15 million -- since World War II," Brainard notes, "but it will increase by 50% by the year 2000, which will give us a significantly larger cigar-smoking group." That fact figured in the new owners' decision to buy the company, "but we weren't depending on it as the basis for our success."

Consolidated Cigar is an old and solid company. It traces its ancestry back to the nineteenth century. As a Gulf & Western Industries Inc. subsidiary, it manufactured 12 well-known labels, ranging from the inexpensive Muriel (15 cents each) to the exclusive H. Upmann ($1.45 each). Its share of the market grew each year (to 30% currently), and profits were steady at about 10% of sales. Even so, it did not meet G&W's criteria: It was capital intensive, with $75 million tied up in tobacco inventories; with the industry declining at the rate of about 5% a year, Consolidated appeared to have little growth potential; and it offered a relatively low return on investment. So G&W announced that it intended to divest itself of the company.

After one promising deal fell through, Brainard "just went up in the elevator" and asked G&W's president, Jim Juddelson, whether he would entertain a bid from management. The answer was yes. And so, last March, Brainard and four other investors purchased Consolidated from G&W in what was one of the most highly leveraged buyouts of all time. The purchase price was $120 million. The hve investors put up only $1 million of their own money and yet managed to retain all of the equity.

Most of the financing came from G&W. Brainard convinced G&W that he could quickly reduce the debt by selling off subsidiaries -- as he, in fact, did. He also continued the transition from whole-leaf to homogenized tobacco wrappers, a 10-to-1 savings that also per mitted Consolidated to liquidate a portion of its inventory, turning leaf into cash. As a result, the investors wound up with a big business for the out-of-pocket expense usually associated with buying a much smaller one.

Now Brainard is stabilizing the business, enjoying his Dutch Masters Elites, and waiting for other over-35-year-olds to discover cigar-smoking. He admits, however, that their reasons for lighting up may be different from his own. Says Brainard, "When Charles Bludhorn [the late chairman and chief executive officer of G&W] interviewed me back in '71, he said, 'Well, naturally, you'll have to smoke cigars to get this job.' "