A Conversation with the Padróns
José Orlando Padrón, Chairman Jorge Padrón, President
From the Print Edition:
Adrien Brody, September/October 2010
In September 1964, Cuban émigré José Orlando Padrón started a cigar company in Miami. His goal was modest and understandable: he wanted to make a cigar that reminded him of the smokes he enjoyed in Cuba, his former home. The road was long and difficult, interrupted by war, embargo and even a failed plot to abduct him from his cigar factory, but 46 years later Padrón's company is a leader in the world of premium, handmade cigars. His products have been named Cigar Aficionado's Cigar of the Year three times out of six contests and have never failed to place in the top three. At the age of 84, the patriarch and chairman of Padrón Cigars now works side by side with his 42-year-old son, Jorge, the president of the company.
Senior editor David Savona spent time with the Padróns recently in Nicaragua, touring their fields, factory and tobacco warehouses, smoking cigar after cigar, and sat down with Jorge and his father for a long and wide-ranging conversation about the long journey from fledgling company to industry standout. Jorge translated the portions spoken by his father.
David Savona: Señor Padrón, what has been the biggest obstacle you faced in all your years of making cigars?
José Orlando Padrón: The biggest obstacle I feel I faced was in May of 1978, when there were already problems in Estelí [Nicaragua] because of the pending war. I was going to Costa Rica. There were so many problems in Nicaragua, I was analyzing the possibility of opening a factory there. On May 24, 1978, Caesar Gadea Sr. called me at the hotel in Costa
Rica and said "Don Orlando, it's over." They burned the factory down on the 24th of May. They burned the factory and the warehouse in Estelí.
Q: So he meant your business was over?
José Orlando Padrón: Yes. The day they burned down the factory, the next day I came back to Nicaragua, to Estelí. During that time there was rioting, there was a lot of uncertainty. That day there were 18 buildings set ablaze.
Q: It must have been frightening.
José Orlando Padrón: Those moments are the moments men have to fill themselves with courage. In the face of that is when you find a person's character.
Q: Was your factory insured?
José Orlando Padrón: I had insurance, but not enough to cover the damages. I had the good fortune that many of the people who worked with us helped us and cooperated with me. A little more than 30 days later, I opened up a smaller factory in a house we had rented. I was fortunate enough that I didn't have all my raw material in one warehouse. I had it all throughout Estelí. There were people who were able to salvage some bales as [the factory] was burning. I gave a thank you gift of money, thanking them for returning it. After the fire, I went and I bought a lot of raw material, and I sorted and deveined the tobacco myself.
Q: When did you open the new factory?
Jorge Padrón: June 26, 1978.
Q: What happened then?
Jorge Padrón: After that, things really got bad in terms of war in Estelí. A lot of the employees would tell him, "Don Orlando, get out—the boys are coming."
Q: Who were the boys? The Sandinistas?
José Orlando Padrón: The rebels.
Q: Did you ever fear you would be killed?
José Orlando Padrón: I thought about a lot of things, but what other alternative is there? You just keep going forward. Having gained the experience of the fire, I started separating tobacco even more.
Q: Moving it to other places, to spread the risk?
José Orlando Padrón: Yes. In Managua I had 300 bales.
Jorge Padrón: He didn't want to have it all in Estelí.
José Orlando Padrón: There was another lot of tobacco we had in Condega. Then I had another 200 or 300 bales in Estelí. In July of 1979, the revolutionaries took over Nicaragua. At that point, Leonardo Lainez, who was our accountant, under gunfire in Managua moved 300 bales of tobacco to the airport where they left on a cargo plane to take it to El Salvador, from there to Puerto Cortez [Honduras] and then to Tampa. The bales that we had in Condega we moved over the border to Honduras.
Q: How? With trucks? Was it difficult?
José Orlando Padrón: I had a few people who did that for me. The bales that were here in Estelí the employees protected. The only thing I lost from that factory was a little scale that I used to weigh tobacco.
Jorge Padrón: Estelí was one of the worst places in terms of fighting during the war.
José Orlando Padrón: After the triumph of the Sandinistas, the employees here went on strike. I had a makeshift factory in Honduras.
Q: This happened before the U.S. embargo on Nicaragua.
José Orlando Padrón: Yes. All of this is happening before the embargo. The employees were working by themselves, alone.
Q: For how long?
Jorge Padrón: For one year.
José Orlando Padrón: They would make the cigars and ship them to Miami. I would send the money, but it was too dangerous [to come.]
José Orlando Padrón: I wasn't afraid of the people of Estelí, but others who didn't know me, who might have different agendas.A year after that, one of our employees sent me a letter requesting that I come back. They were running low on raw material. I said, "I'll go, but I want to make sure the commandante of the Sandinista army in Estelí is there." His name was Elias Noguera. The day I arrived, all the employees were present, along with Noguera. I asked him, "I came here to find out if I'm going to be accepted here in Nicaragua, or not." I said "All these people who are gathered here today are here because of what we've done at Tabacos Cubanica. Families who depend on us. If you feel I won't be accepted or welcome, I'll leave the factory, and I'll leave it to them." He said "Don't worry-you'll have no problems in Nicaragua. You're a person who has not been involved in politics." I told him "All the farms are controlled by the Sandinistas. I need to know if I can continue to have access to raw material in Nicaragua." And that's how I was able to function up until 1985. On April 20, 1985, President Regan declared an embargo on Nicaragua. I was in Miami.
Q: What did you do?
José Orlando Padrón: The embargo said U.S. citizens had seven days to remove all property from the country. I tried to get an extension from the U.S. government. The Department of the Treasury allowed me until September. We took out between 4 and 5 million cigars in a short time span—we were working day and night.
Q: And that amounted to about one year's production for you at that time?
José Orlando Padrón: It was not enough. At that time I was selling 5 or 6 million cigars a year in Miami alone.
Q: Did you shut the factory in Nicaragua?
Jorge Padrón: The factory kept operating as long as it could, but it had to close.
Q: How long was it closed?
José Orlando Padrón: Five years, from 1985 to 1990. I told the employees, "Do what you can," and I kept sending them money from Miami.
Q: What happened to Padrón during the war?
José Orlando Padrón: We used to make 6 million cigars a year in Miami. When the war came we had to go down to 2 million because we didn't have the tobacco.
Q: You never opened in Costa Rica, but you did go to Honduras. What changes did you make while you made cigars in Honduras?
José Orlando Padrón: I never used Honduran tobacco. That's why I had to cut back production. My philosophy was it was worthwhile to maintain quality.
Q: You weren't getting more Nicaraguan tobacco from across the border?
José Orlando Padrón: No. I wasn't making 5 million cigars a year when I moved to Honduras. Production went down. I never wanted to vary the blends in our cigars.
Q: Were you losing money while you were in Honduras?
José Orlando Padrón: I've never lost money in this business. To run a business is a very important thing. It's almost like an art. I wasn't making what I was making before, but the company never lost money. Another very difficult time was in the early '80s. The embargo still hadn't taken effect, but I was up in Honduras and Nicaragua. At one point there was a plot to kidnap me. When I was in Nicaragua, I would live in the factory. I had a small room in my office.
In Honduras, it was the same. This is a true account of exactly what happened. One day I get a call from Tegucigalpa [Honduras]. "Don Orlando, I need to speak to you, but I can't do it over the phone." A woman had gotten on a bus in Danlí and there were two men holding a bag. They asked her what time the bus leaves. One of the guys said to the other, "Let's go have a beer." The bus leaves without them, and they never took the bag. When this woman got to Tegucigalpa, she opens the bag and sees what's inside: two passports and the layout of my factory in Danlí, with information on where I slept. It had a description of all my movements, when I would leave-everything. They were Nicaraguan nationals. I went to the equivalent of the FBI in Honduras, I came to Nicaragua and showed a security person and I also went to the FBI in Miami.
Q: What happened?
José Orlando Padrón: We still have the passports in my safe in Miami. One day one of the two men was found dead, five bullet holes.
Q: What happened?
José Orlando Padrón: I don't know. I think he was just a delinquent.
Q: And the other guy?
José Orlando Padrón: They never found him.
Q: Did you hire guards after that?
José Orlando Padrón: No. But I did install a remote control starter on my car, change my routes and put cameras at the house. I changed a lot of things that I did. Thank God I'm still alive right now. The most important lesson in all this is to have as few enemies and as many friends as possible.
Q: Was this your darkest hour?
José Orlando Padrón: No. I believe the day that I die is already marked on the calendar.
Q: Jorge, I ask you the same question I posed to your father: What has been the biggest obstacle you have faced in your years of making cigars?
Jorge Padrón: We're lucky. My generation hasn't had to face the same problems-the fires, the bombing, the starting of a company from scratch. What kind of challenges have I faced like that? Nothing. My challenges are all different. Improving on what has been done. It's trying to understand and appreciate what my father did, and all the sacrifices are worth it. Growing the company. Having the restraint to ensure that it doesn't get compromised.
Q: And what do you focus on at the back of your mind through all this? What's the driving message?
Jorge Padrón: The integrity of our family name. The integrity of the name and understanding all these sacrifices he mentioned. It's the respect of the brand first.
Q: Jorge, what type of company was Padrón Cigars when you first started?
Jorge Padrón: I had no doubt we had a great product. But it takes time. At the time we were a highly regarded brand, but not at a national level. My father was able to sell cigars in the most difficult market-to Cubans in Miami. The bottom line is we had a great brand when I started there.
Q: I think some would assume it would be easier to sell cigars in Miami, given the number of cigar smokers.
Jorge Padrón: The market in Miami was very demanding. It wasn't like today. In those days a guy would walk in to buy a box of cigars and I might show him 20. I would bring at least six or seven boxes for him to look at. Today most consumers walk in, buy a box and then leave.
Q: When did you do that, sell cigars to the customers?
Jorge Padrón: I've done that my whole life. In a family business, you do a little bit of everything. If a customer came in and there was nobody at the counter, I took care of him. When I graduated and I got my degree and started working for the company full time, the company was already 28 years old. My father had sold almost 100 million cigars. It's not like we were trying to reinvent the wheel. Padrón was an established brand, well recognized in the Cuban community in Miami. When I came on board, we started selling to retail stores. I felt we could create something that was different, that could enhance the brand. Back then, the marketplace wasn't what it is today. In those days, you had either very strong cigars or very mild cigars. I think the Anniversary Series changed the landscape of the marketplace in the U.S. market from a taste standpoint. I just think it was a very refined taste.
Q: It's not a strong cigar, and it's certainly not a mild cigar.
Jorge Padrón: That's what we say all the time. Strength is just one trait in a cigar, but it's by far not the most important part. There are people out there who like smoking strong cigars, and that's fine. You can have a cigar that is deceptively strong but very flavorful, and that's what we go for. We're going for flavor. When you ask my father about a cigar, he says either it's good, esta bueno, or it's not good, no esta bueno.
Q: I bet your father is a pretty tough judge of cigars.
Jorge Padrón: Listen, my dad is a lover of cigars. So if someone gives him a cigar that he likes, he'll tell him. He doesn't smoke other people's cigars, but if someone gives him one he'll smoke it out of respect. He's very honest. He doesn't play games.
Q: What is the philosophy of Padrón Cigars?
Jorge Padrón: It's simple. It's making a consistent commitment to making the best quality products available. Never compromising. We're not afraid to cut back production if we don't have the tobacco we need. This is not a numbers company. This is a company that produces quality. During the Civil War when we didn't have access to tobacco, he went from 6 million cigars in 1980 to 2 million in 1985. In today's business world, a person like my father, he would be fired. People would try to substitute. You can't get tobacco from Nicaragua? Get it from the Dominican Republic. If he had done that, he would have ruined the brand. My dad was very clear and he was a visionary from my standpoint. That was a very difficult time. Imagine, you're selling 6 million cigars a year and then you're down to 2 million?
Q: It would be disastrous for many companies.
Jorge Padrón: We've been very careful with how we grow our company. We're very conservative, very lean, vertically integrated.
Q: There's a lot of pressure today for companies to come out with new products. You don't go that route. Why?
Jorge Padrón: We're not about to try to reinvent the wheel. At the end of the day we have a very loyal customer. If it's not broke, why fix it? Obviously the markets change, and as a company we have to be prepared to understand the market and the consumers, and we have to adapt, and that's what we've done. When we started selling cigars at the national level in 1993, a lot of people thought our cigars were too strong. Most of the cigars that were being sold were much lighter in flavor. Our cigar, with a sun-grown wrapper, there were very few of them at the time. It's funny, because over time that has changed. Now you have a lot of consumers who are willing to experiment. Back then, it wasn't like that.
Q: Earlier today we looked at new construction near your main operations here in Estelí. You're making warehouses and might even be building a new cigar factory where you're considering making cigars under a name other than Padrón. Doesn't that run counter to your philosophy on making cigars?
Jorge Padrón: The biggest thing we've always said is it's difficult to make more than one brand in one factory. To this day, we really only have one brand with three lines in it. We also have a very controlled production-with the expansion, not only is it going to be for production, it will help us sort more tobacco. The No. 1 reason is to have storage space for tobacco and to build another factory. There, we'll be able to make new brands of cigars.
Q: A factory that will be separate?
Jorge Padrón: That will be separate from Padrón.
Q: What about the brand name José Piedra that you own? You once made cigars under that name.
Jorge Padrón: We haven't done anything with José Piedra. That's in a holding pattern right now.
Q: What's the first thing you would do if the Cuban embargo is lifted?
Jorge Padrón: I don't know. So many things have to happen for that to occur. It's hard to say. Obviously, a company like ours, with our history and tradition, we would certainly be very interested in going in and investigating the opportunities. But it would have to happen on our terms. We're not going to run. We're going to do it right. We're going to do things the way we're used to doing them, one step at a time. We've worked too hard to build this brand to blow it.
Q: Have you ever tasted the combination of your tobacco and Cuban tobacco?
Jorge Padrón: Never.
Q: How do you think it would taste?
Jorge Padrón: In my opinion, our cigars compete with Cuban cigars. You have great Cuban tobacco and you have bad Cuban
tobacco, just like you have great Nicaraguan tobacco and bad Nicaraguan tobacco. The important thing is to get the right tobacco.
Q: You don't have an aging room in your factory. Most people make cigars, put them in an aging room, let them sit for a month or so. You guys don't do that.
Jorge Padrón: We don't have an aging room. The consumer makes the final call. I don't expect a consumer to spend $15 on a cigar and have to sit on it for two years. My job is to sit on the tobacco for 10 years or five years, your job is to smoke it as soon as you want to smoke it. What's the point? That's like buying a BMW motorcycle and you have to keep it in your garage for two years before you can ride it. What's the point? These are not inexpensive cigars—they're worth the price, and there's a lot of effort put into the cigars to make them worth that price.
Q: You have a great deal of tobacco in storage.
Jorge Padrón: We have over 150,000 square feet of warehouse space. This allows us more space to accommodate tobacco. We like to stockpile tobacco to ferment. For us, you can never have too much tobacco. We have enough tobacco for four or five years of production at any given time. Tobacco can be great in the field and you can screw it up in the barn. There are myriad problems you can have.
Q: Does tobacco ever come in and you realize this just won't work? I can't use it to make cigars?
Jorge Padrón: We've had tobacco from certain farms that we have turned into scrap and used as fertilizer. I'm not talking about the whole crop-I might be talking about a priming, or a specific plot, where we say we're never going to use this. We're better off using this as picadura [short-filler tobacco] or fertilizer. The way we ferment our tobacco, the tobacco suffers a lot. You end up breaking a lot of leaves. And sometimes we even have pilones [tobacco stacks] that rot because of over fermentation. My dad says that's the cost of doing business. He'd rather lose a pilon because he over ferments than to put one through that he under ferments. He's not afraid. He knows. Part of fermenting tobacco the right way is, inevitably, you're going to have some times where you might take one too far and you lose it.
Q: The fermentation, that's where the real magic happens with Padrón cigars, right?
Jorge Padrón: You have to know when to say when.
Q: When is the right time?
Jorge Padrón: I can't tell you that. (laughs)
Q: We were smoking cigars before that were made by one of your finest cigar rollers. You and your father had pulled them from production, because you felt something was just a little off, and you thought it was due to stress he was going through. How is it possible to manage a company where all of your products are made by hand, and therefore vulnerable to the many things that can affect human production?
Jorge Padrón: When you make the number of cigars that we make every day you have to deal with some of these issues. We have very strict quality control steps to make sure we catch those problems. My philosophy on this is when a consumer goes to buy a box of Padróns he can feel confident to pick up the first one he grabs. If we were making 20 million cigars a year, that would be much more difficult to control. We have a family in Miami that runs the business, and we also have a family here that helps us run the business. When you sit down and look at our labor pool, there are many who are related—brothers, sisters, nephews, husbands and wives-being able to understand how important that relationship is to us allows us to maintain consistency in the brand. To have a person work for you for 30 years says something. We're hands-on. We know the names of most of our employees. We deal with them on a regular basis. We're out there walking around. It's a very open relationship.
José Orlando Padrón: One guy makes the Padrón Serie 1926 80 Years and the Family Reserve 44s. He had a problem. The cigars were too tight. I stopped production. We can't risk that.
Q: Why does Padrón Cigars, make only five million cigars a year?
José Orlando Padrón: That way I can maintain quality and not rush the tobacco. Here we have 500,000 pounds of tobacco. The important thing of a brand is consistency. You have to have some reserve. When you start getting above that, it's hard to maintain the blend. It's not about quantity, it's about having control.
Q: Jorge, what have you learned from your father about making great cigars?
Jorge Padrón: When I look at my father, it's a combination of things. It's not just about making cigars. It's about how you treat people, it's about showing loyalty to your employees, which your employees always will return to you. And that's what I see evident in Padrón Cigars. My father has stuck to his philosophy from day one, making the best cigars possible, and the only way that can be accomplished is if everyone is on the same page. The attention to detail and the attention to quality starts with the philosophy my father has put forward, but it's actually executed by the people that we employ. He constantly reminds me that we have our family in Miami, and we have our family in Nicaragua. He really considers those people family.
Q: How big is that family in Nicaragua?
Jorge Padrón: We have close to 400 employees in the factory, and during the growing season that number jumps to 800, 900 people. It's incredible when you look at our employees in Nicaragua how many of them are actually second and third generation employees of Padrón Cigars, or Tabacos Cubanica, which is our manufacturing company in Nicaragua. Of his first four original employees when he started in Nicaragua in 1970, two still work in the company. To me, that's mind-boggling.
Q: You were part of your family's business from an early age. Did you always know you would be part of the business?
Jorge Padrón: All of us have worked in the family business. My brother Orlando has worked in this business since he was a young teenager, my sister Elizabeth, my sister Lissette, and my cousins. My father has never been someone who has forced us to work in the family business. When you come to Padrón Cigars you can tell everyone is there because that's what they want to do. Was I raised around it my entire life? Absolutely. Was I forced to smoke a cigar or start working in the business? Absolutely not. The choice was mine. And I will do the same thing with my children.
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