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Puffing Along
New Haven Family Sells 7 Million Muniemaker Cigars a Year
Dorothy Grave Hoyt is something of an oddity in an industry geared
principally to masculine tastes. Young, attractive and female, she is
completely at ease in the world of fine tobacco and elegant cigars.
People are usually pretty surprised when they findout what I do,
admits the 32-year-old Hoyt. But there was never any question in my
mind. I've known since I was a little girl that I'd end up running the
family business.
I guess you could say that tobacco is in Dorothy's blood, adds her
father, Frederick Grave III. She's always been interested in
cigars. She knows as much about running a cigar business as anybody.
The business is F. D. Grave & Son, Inc., Connecticut's lone
surviving cigar maker. The company, an icon of the nineteenth-century
American entrepreneurial spirit that helped forge a great nation, has
been in the Grave family for four generations--surviving two world
wars, the Great Depression, countless business cycles, changing trends
and an anticigar onslaught that has been building for decades.
It might seem odd that Dorothy's in the business because she's a
woman, admits Frederick Grave, who with his brother Richard went to
work at the company in 1950, the year they both graduated from Yale
University. The brothers took control of the business in 1962, shortly
before their father, Frederick Grave Jr., died in 1963. But when Dick
and I first started out, our friends thought we were crazy, too. They
said, 'What kind of future is there in cigars? All your customers are
old men.' Well, I figured there would always be old men around. The
cigar industry by nature is kind of doom and gloom, but it's been good
to us.
Indeed it has. Sales of F. D. Grave & Son's cigars have held
steady at the 7 million mark for more than a decade. Though this is
down from the company's mid-1960s peak of about 10 million, it is
still a respectable number in today's antismoking market. Such
success, claims Fred Grave, lies in dedication to quality and simple
perseverance.
We've managed to do well year in and year out, he says. None of us
have gotten superrich, but we're all pretty comfortable. Let's face
it, I'd much rather have been in the cigar business over the past 10
years than in banking or real estate. And the other thing is that,
unlike computers and VCRs, there is no bright guy in Japan dreaming up
a better cigar.
On a breezy morning in early November, the Graves gather at the
company's headquarters in New Haven. Constructed in 1901 by Frederick
Grave Sr., the State Street building was said at the time to be one of
the most substantial, modern, and up-to-date cigar factories of this
or any other country, according to a local-newspaper article
published in 1905. Today, the graceful, four-story structure is a
relic among its more youthful neighbors, its Victorian details and
gold-lettered sign fading with age.
Inside, the rococo-paneled walls are covered with framed,
original-edition, limestone-etched lithograph cigar labels and other
memorabilia. A cigar-store Indian guards the inner-office desk that
was once used by Frederick Grave Sr. himself, and is now under the
command of great-granddaughter Hoyt. The 24,000 square-foot building
is eerily quiet, and only a faint aroma of cured tobacco lingers in
the air. Cigar production was shifted to a Pennsylvania subcontractor
in 1986, explains Fred Grave, who, at 67, is still trim and
energetic. Dressed casually in a worn sweater and open-neck shirt, he
leans back in a simple, hardwood office chair and chews thoughtfully
on one of his favorite cigars, an unlighted, six-inch Muniemaker Palma
100 Oscura.
Dick Grave, 65, dressed as casually as his brother, has just returned
from an early-morning, bird-hunting foray in the Con-necticut coastal
wetlands, a weekly autumn tradition. He admits to being a very light
smoker, only one or two a week, compared with his brother's three or
more a day.
Fred is our walking tasting machine, says Dick, adding that he got
a couple of pheasants today. Then he launches into a discussion of
last year's Connecticut broadleaf tobacco crop, from which F. D. Grave
& Son will get its annual supply of wrapper and binder leaf.
For the Grave family, taste has always been the paramount factor in
judging the quality of their cigars. During a three-hour conversation
with them, the notion of taste comes up at least a dozen times. We
are known to have the blackest wrappers in the industry, says
Hoyt. But don't let that fool you. Our oscuras have an excellent,
robust taste, sometimes referred to as a sweet-tasting smoke. They are
not harsh whatsoever.
We work on the premise that the big thing is taste, agrees Fred
Graves. It isn't so much looks; it isn't so much packaging. In the
long run, it's the taste that counts. To illustrate his point, he
finally lights the Palma 100. A wispy cloud of bluish smokes rises
toward the high ceiling, casting a mild, pleasant fragrance throughout
the room.
F. D. Grave & Son uses broadleaf, which is exposed to the elements
during the growing cycle, rather than shade-grown tobacco, which is
cultivated under tents and therefore protected. Variations in the
wrappers' color, texture and general complexion are to be expected,
explains Dick Grave. In fact, Dorothy Hoyt claims, these minor flaws
are what make our cigars beautiful. It's a question of character as
opposed to some sort of subjective standard of perfection.
Does Hoyt smoke cigars? Of course, she says with a laugh. I'm not a
frequent smoker, but I really enjoy our cigars. Sometimes I can even
get my female friends to try them. I had my first one when I was 13.
***
The F. D. Grave & Son's cigar line once included 22 different
cigars, many of which were dropped when the current Muniemaker
flagship brand was introduced in 1916. Today the company markets 10
cigars, seven under the Muniemaker brand, including four oscuras, a
dark and two lighter labels, ranging in size from 4 1/8 inches to 6
inches. One of their other three cigars, the 4 7/8 inch Cueto naturale
cello, was introduced when F. D. Grave & Son acquired the brand
along with the Lewis Osterweis & Sons cigar company in 1954. The
two other brands, Bouquet Special and Judges Cave, are both
long-running labels. Billed as the millionaire's cigar at an average
man's price, the 5 1/8 inch oscura Bouquet Special, which comes
wrapped in cedar and packed in a glass tube, is the only cigar in the
line with elaborate packaging.
The 4 1/8 inch Judges Cave, which dates to the company's 1884
founding, is the only original brand still in production. Frederick
Grave Sr. took the name from a New Haven area landmark that is reputed
to have served as refuge to two of the 59 judges who signed the death
warrant for King Charles I in 1649 and were persecuted after the
Restoration of the English monarchy in 1660. As the story goes, three
of the fugitive judges escaped to the Colonies, and two eventually
were forced to hide in a cave for several weeks while the search for
them intensified.
One of the more distinguishing factors of F. D. Grave & Son's
cigars is price, which ranges from about 60 cents for the Muniemaker
Regular to about $1.50 for the Bouquet Special. According to Fred
Grave, another important aspect of the company's continued success is
the high value for price ratio they offer. Our motto is: 'What this
country has is a good 60-cent cigar,' says Grave. And, he insists,
there is a demand out there for a good-tasting, moderately priced
cigar. We have a lot of customers who can afford to smoke anything
they want. But not everyone is comfortable spending five or more
dollars on a cigar, especially if he is smoking four or five of them a
day.
Our cigars may not carry a hefty price tag, adds Hoyt. But they are
of the finest tobaccos and can match any cigar for flavor. Which
brings the conversation back to taste. The point is that people
appreciate a good-tasting cigar. If that cigar costs $10, fine. But if
you can deliver it at a moderate price, so much the better, she says.
In terms of price, F. D. Grave's biggest edge over its competition
lies in the fact that all of its cigars are machine made, not hand
rolled. From 1884 until the late 1930s, the company's cigars were made
by hand; but with the introduction of rolling machines in 1938, the
company began to phase out its hand-rolled lines. By 1956, when the
last of its hand rollers had retired, the company had switched to its
100 percent machine-made brands. It was a matter of efficiency and
productivity, says Hoyt. In 1905, there were 150 employees here
producing about 100,000 cigars a week. In the 1960s, we were producing
twice as many cigars with less than a third the number of people.
In 1986, the rolling machines at the State Street factory were
switched off for the last time, and the two top floors of the building
were rented out as artists' studio space. We took a lot of blows in
the '80s, explains Hoyt. We had a hard time replacing workers who
were retiring or leaving for more lucrative jobs in computer and
high-tech industries, and the state was talking about implementing a
20 percent excise tax on cigar inventories, which it finally did in
1989.
That tax really put an end to cigar making in Connecticut, adds Fred
Grave. New Haven used to be quite a cigar-producing city; there were
a lot of cigar companies here. But all that's over now, and I doubt,
even if the tax were repealed, that cigars will ever be made here
again.
All of F. D. Grave's production is now subcontracted to the
F. X. Smith Co., a long-established, family-owned cigar maker in
McSherrystown, Pennsylvania. We were kind of sad about it, says Fred
Grave of the production move. We had about 40 people working
upstairs, some of whom had been here for over 50 years. But when
F. X. Smith approached us, it seemed like the right thing to do. They
could make good cigars, but they couldn't sell them. We could sell
cigars, but how were we going to make them?
So far, says Fred Grave, it's been a perfect relationship. It has
kept them in business and given us a supplier we could relate to,
because we're both small, family-owned businesses. I'd say we make up
about 80 percent of F. X. Smith's total production. And they make our
cigars every bit as good as we made them ourselves.
***
For F. D. Grave & Son, there has always been only one tobacco
suitable for binding and wrapping their cigars: Connecticut-grown
broadleaf. In the old days under Frederick Grave Sr., relationships
were established with growers along the Connecticut River Valley and
with growers in the famed Pinar del Rio region of Cuba to en-sure
adequate supplies of broadleaf wrapper and long filler tobacco. Cuban
filler was used in the company's cigars until 1964, more than one year
after the Cuban Embargo Act had taken effect. The company then
switched to a blend of domestic and imported short filler tobacco.
In his day, Frederick Sr. was known as a local expert on tobacco
growing and processing. He frequently traveled to Cuba to inspect
tobacco crops and personally supervised the buying and sorting of his
Connecticut supply each year. Tobacco is the key to the whole
operation, says Dick Grave, the company's current tobacco expert. My
grandfather thought so, and his dedication to getting the best
available has been passed down through my father to us.
The company still takes pride in the fact that it gets its broadleaf
supply directly from growers and not from the wholesale tobacco
market. We work with a variety of small, independent farmers, says
Dick Grave. And the curious thing is that we've never had anything in
writing. We inspect the crop, and when it comes time to decide what
we're going to pay, we go into the old farmhouse, have a cup of coffee
and shake hands. That's it. No lawyer, no contract, nothing.
In recent years, according to Dick Grave, demand for Connecticut
broadleaf has soared due to its increasing popularity with
premium-cigar smokers. In the past, the entire broadleaf crop was
consumed domestically, now more than half of each year's production is
shipped overseas. At the same time, broadleaf production has steadily
declined. In fact, the total acreage in Connecticut planted to wrapper
leaf (both shade and broadleaf) has dropped from a midcentury peak
of 20,000 acres to about 2,000 acres. The price of broadleaf is being
driven by demand from offshore, says a concerned Dick Grave, and
it's being driven out of this world.
According to Dick Grave, last year's broadleaf crop was a good
one. Plentiful sunshine combined with other near perfect conditions
combined to produce high-quality, robust leaves, the kind that make
the best oscura wrappers. The crop will sell for about $3 a pound, a
50 percent increase over the $2 a pound that broadleaf brought in the
late 1980s. But the real cost in wrapper tobacco lies in the special
processing and handling it requires. By the time the Graves take
possession of the leaf, it has been cut, cured in drying sheds and
bundled. It is then shipped to a sorting shed, where it is graded into
one of six different categories, packed in wooden crates, sweated
for six weeks in a humidity-and-heat-controlled environment, then aged
in a warehouse for up to two years.
Cigar making is a very capital-intensive business because you've
always got a two-year supply of tobacco on hand, says Fred Grave,
adding: Look at it this way, we have to buy and process a lot of leaf
to make 7 million cigars every year.
***
As with many old, family-run companies, tradition plays as big a role
as anything in formulating policy at F. D. Grave & Son. Take
product packaging and presentation, for example. The company still
packs its cigars in boxes of only 25 or 50 and refuses to use
cellophane wrappers, except on a very limited portion of its
production. We have always felt that boxed cigars make the best
presentation, explains Fred Grave. And the reason we don't use
cellophane is that my father wanted the cigars to touch each other in
the box. He said that a 'marriage' of the tobaccos in the cigars took
place, that being together made them taste better. Now it's a
tradition with us.
Despite the importance they place on tradition, the family actually
knows very little about the man who founded the company.What is known
is that Frederick Grave Sr. was born in Osnabrück, Germany, in
1849 and immigrated to the United States with his parents in 1861,
arriving in Baltimore in the early days of the Civil War. He was
apprenticed to a Cincinnati cigar maker at age 14, and seven years
later moved to New York to work as a cigar packer at the Defiance
Cigar Factory. In 1873, at age 24, he accepted a foreman's position
with the Osterweis cigar company (which his grandsons later bought)
and, in 1884, left Osterweis to form his own company and began making
and marketing cigars under the Judges Cave brand. By 1900, Frederick
Grave Sr. had made enough money to build the State Street factory and
a huge home on a parklike setting in Whitneyville.
My grandfather made a lot of money in the cigar business, says Fred
Grave, mostly before World War I, when cigars were really big and
there was no income tax. He had a flair for marketing. When he
launched the Muniemaker brand, he had billboards put up with just the
name on them, so that pretty soon everyone wanted to know what a
Muniemaker was. Then a couple of months later he came out with the
cigar, and I guess from the start it was a big hit.
Frederick Grave Jr. was born in New Haven in 1889 and joined the
family business after he graduated from Yale in 1911. He served as a
sergeant in the chemical-warfare service during the First World War,
went back to making cigars when he came home and finally took over the
business when his father died in 1924. Grave Jr. ran the business for
38 years until 1962.
According to Fred Grave, he and his brother got involved in their
father's business more out of ambivalence than by design. We'd
graduated from Yale; it was summer, and we really didn't know what we
were going to do with ourselves. I came down to the office one day and
asked my father if he had a job for me and he said, 'sure, go out and
sell cigars.' I've been selling them ever since.
Hoyt's interest in the company, on the other hand, started long before
she graduated from Boston University in 1983 and went to work for her
father and uncle. When I was a school kid, I'd ask my father to bring
home work from the office for me. My dream has always been to own the
company and to buy back the family mansion, she says, referring to
the Whitneyville estate, where her father and uncle were raised, but
which her grandparents sold in the late 1950s because it was too big
for them to maintain. There is now a fifth generation in training,
Hoyt's six-month-old son, Charlie, who spends his days in a playroom
that until recently was his grandfather's office.
I used to have flow charts in there, jokes Fred Grave. Now there
are Barney posters.
***
In the early 1900s, F. D. Grave sold about half of its annual
production of 5 million cigars in Connecticut and the other half via
mail order throughout the United States. By midcentury, that market
had shifted, and nearly all of the production was sold in the
company's home state. When Dick and I first came on board we were
selling all our cigars out of the back of cars, recalls Fred
Grave. We had 16 salesmen, and every day they'd fill up the trunks of
their cars and head out to service their accounts. Imagine selling 7
million cigars out of the back of a car.
But as times change, observes Fred Grave, so do markets. By the
mid-1980s, the company's survival depended upon expanding its
reach. We found a niche for ourselves in the upscale cigar stores
that began popping up in malls all across the country, says
Grave. They had the expensive brands, and they had the cheap brands,
but there was really nothing in between.
Today the company's major markets include California, Ohio, Washington
D.C. and the state of Washington as well as Connecticut. The last
salesman retired in 1990, and now, apart from the few direct orders
they receive in their New Haven headquarters, all F. D. Grave &
Son cigars are sold through independent distributors. But personal
contact remains an important element of the company's marketing
strategy. Dorothy, Dick and I still make courtesy calls on all of our
accounts, says Fred Grave. We try to visit every store that handles
our cigars at least once every two years. And you know, they're always
happy to see us.
Neither Fred nor Dick have any plans to retire. Dad worked here until
the day he died, says Dick Grave. Adds his brother, This is sort of
our home away from home, and as long as our health holds out, we'll
probably hang in here. Anyway, the numbers don't mean much; there's no
law that says you have to quit working when you turn 70.
What about the company's future? Who knows? Dorothy is committed, and
little Charlie seems to be literally growing up in the business, says
Fred Grave. There will always be cigar smokers, and there will always
be a market niche for a good, moderately priced cigar.
Anyway, he adds with a laugh, they say nothing dies slower than a
family cigar business. It just seems to puff along.
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