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Insider Q & A: Fuente Sales Manager Fred Zaniboni
Posted: October 28, 2002
Fred Zaniboni has worked in the American tobacco business for more than half a century. He began selling six-cent cigars to retailers after the second World War, and today the 80-year-old Zaniboni directs the national sales force of Fuente & Newman Premium Cigars Ltd., overseeing the sale of cigars handmade by Tabacalera A. Fuente y Cia. He has worked through some of the most extreme times in the history of the cigar industry, from the embargo that removed Cuban cigars from the U.S. market to the recent cigar renaissance that created a demand for premium handmade cigars unlike any that existed before. In July, special contributor George Brightman and senior editor David Savona spoke with Zaniboni about the changes in the cigar market over the last five decades and the rise in popularity of Arturo Fuente cigars and the Fuente Fuente OpusX.
Cigar Insider: Tell us how you got involved in the cigar business.
Zaniboni: In 1946, I started with Philip Morris. I had my own sales area; southern Massachusetts down to Cape Cod. We had cigarettes and pipe tobacco. In 1953, I had an offer to go work with Swisher.
CI: What types of accounts did you call on in those days? Many of them weren't typical cigar shops, correct?
Zaniboni: The best stores in those days used to be on the corners. People would come to work and get off the bus, and on the street corner was always a busy cigar store. They all carried some type of cigar.
CI: What was the average price of the cigars then?
Zaniboni: A 10-cent cigar was considered a good cigar, 15 cents was considered expensive. Two for a quarter was considered expensive.
CI: Were these all machine-made cigars?
Zaniboni: In the late '40s, early '50s, the machine age was just coming in.
CI: So were they mostly bonded Havana cigars, or were they a mixed bag? [Editor's note: bonded Havanas were made in the United States and contained at least some Cuban tobacco.]
Zaniboni: They were a mixed bag.
CI: Were imported cigars a major factor in the market?
Zaniboni: They were mostly in hotel stands, and in the occasional smoke shop you would find a few Cuban cigars.
CI: What would a genuine imported Havana go for in those days?
Zaniboni: Oh, probably 20, 25 cents. You could get some for 15 cents in those days.
CI: Tell us what happened when the surgeon general's report came out in the mid-1960s, and American domestic cigar consumption spiked to 9 billion units.
Zaniboni: Those were crazy days. Suddenly overnight, everybody quit cigarettes and turned to cigars. The problem was, they were trying to smoke a cigar the way they smoked a cigarette -- they bought a cigar and immediately started inhaling. You couldn't keep up with the market; it went absolutely crazy, particularly cigarillos -- small cigars. It didn't last long. It wasn't as well sustained as this period of prosperity.
CI: Tell us about how the embargo and the ultimate disappearance of Cuban tobacco affected the manufacturers.
Zaniboni: In the domestic field, we didn't benefit very much, because we were making short-filler cigars and the Cuban smokers wanted long-filler cigars. People were looking for manufacturers to give them a cigar that could replace what they lost, which they never did find. The market really went through turmoil.
CI: Where and how did you meet the Fuentes?
Zaniboni: I went into business for myself as a broker. I was looking for a line, and a friend of mine said, "There's this outfit called Fuente, they work out of trucks in New York selling curly heads." A friend looked up the number, called, and we got ahold of a guy named Carlos Fuente. And that's how we first met. At that time, Carlos was primarily in the machine-made business and had one or two handmade cigars.
CI: What year was that?
Zaniboni: 1972. His big sellers were curly heads, brevas, fumas and Moyas, and his big markets in those days were in New York, New Jersey, and Tampa. I remember talking to him in Boston, and I said "I'm not interested in the low-end stuff, I want hand made." He said "Good, I want more of it." I knew there was a market out there for those cigars.
CI: Back then, were the fumas and curly heads different than they are today?
Zaniboni: They used to be machine-made in Tampa. Today they're handmade. For a machine cigar you couldn't beat 'em. He stressed quality on his machine-made cigars then like he stresses quality on handmades now.
CI: What did they sell for?
Zaniboni: In those days they were 15 cents.
CI: What was it like selling Fuente cigars in the 1970s?
Zaniboni: They would say, "Who? Never heard of them. I need another brand like I need a hole in the head." Same thing they would say today on any new brand. We had no representation in the smoke shops in those days.
CI: You were selling only handmade cigars?
Zaniboni: We were selling both. Handmades were slow in coming, because he only had a few rollers in Tampa. Then he came out with a blend that really clicked called 8-5-8. That was really the cigar that opened up the market for us.
CI: When did Fuente create the 8-5-8?
Zaniboni: 1975, 1976. That to me was always the catalyst of his handmade line. After that, whenever I went into a store I would always show an 8-5-8. That was the glue, that would stick. If they tried an 8-5-8 they would come back for more.
CI: How much was it?
Zaniboni: I'm pretty sure the price was 65 cents. That was a handmade cigar that sold below some of the machine-priced cigars. Up until then we were selling cigars. After that, that cigar was selling us.
CI: Now about this time, there was some trouble, wasn't there?
Zaniboni: We were making cigars in Nicaragua, and the brand was really going, along with another brand Fuente made called Flor de Orlando. I was going to the West Coast and I got a call on a Sunday morning. Carlos said, "You better cancel your trip. They burned us out in Nicaragua. We're out of business." That was about 1978, 1979. A pall of gloom came over us.
CI: The factory burned.
Zaniboni: We were in tough shape. Carlos Sr. had so much determination, so much perseverance, and that kept us going. I think the average person would have folded his bag and gone home. He mortgaged everything he had, that man mortgaged everything. We had grown to be the No. 2 cigar manufacturer in Nicaragua. That was really a setback to us. He then opened a factory in the Dominican Republic.
CI: How long did it take him to get his footing there?
Zaniboni: About two or three years. We were still making some cigars in Tampa, and we started making handmades there again, and I think we had about 15, 20 cigarmakers.
CI: How old were they?
Zaniboni: How old? (Laughs.) Real old. If you were 60 you would've been one of the young kids. We moved into the old Villazon factory and took over. We had 8-5-8s and Churchills, and those sustained us in the smoke shops. In the meantime, our machine reputation was growing, and Carlos Jr. started getting more involved and brought out sizes like Spanish Lonsdales and Rothschilds.
CI: Now tell us when the Newmans entered the picture.
Zaniboni: 1990 we hooked up with the Newmans.
CI: And that agreement consisted of the Fuentes manufacturing all the Cuesta-Rey handmade lines in the Dominican Republic.
Zaniboni: It started out with La Unica, which was an overnight success, then Cuesta-Rey.
CI: And it was the late '80s when the Hemingway line of perfectos appeared?
Zaniboni: Right, somewhere in there. Carlos Jr. had always wanted something with the Hemingway name.
CI: The Hemingways became red-hot rather quickly.
Zaniboni: From day one. We had people actually waiting for them. It was nothing like Fuente Fuente OpusX, but it was an overnight sensation. It just plain sold. The shape and the box caught on immediately. It was the top of our line.
CI: So now let's fast-forward just a little bit. Word got out that Fuente was going to make a cigar with a Cuban-seed Dominican wrapper. What happened?
Zaniboni: We had a few of our competitors call it a mythical farm with mythical tobacco. They didn't believe there was such a thing, because we had so much advance publicity and it was so slow in coming. Not only were retailers calling us, but consumers were calling us. We even got calls from outside the country.
CI: How did you decide to distribute the cigars?
Zaniboni: Geographically you had to pick an area. We only had so many cigars. We had to also pick the quality of the stores, how long they've been with us; it was a matter of loyalty. We did the best we could.
CI: And you're working your way west?
Zaniboni: We have everything east of the Mississippi well covered except Michigan and Minnesota.
CI: But it's going slower than expected, right?
Zaniboni: By now I thought we would be a little more advanced, but there's been a lot of roadblocks -- some I know about, some I don't know about. Boxes have been a problem.
CI: When will it reach the West Coast?
Zaniboni: We have no time frame on that, and I have no idea what the situation is on inventory.
CI: What is the primary difference between the marketplace today and the market in the 1970s?
Zaniboni: People are very quality conscious today. In the old days, price was so important. Back in the late '60s, Swisher had to go from six cents to eight cents on a cigar. Sales dropped so badly that we had to bring back a six-cent cigar, a smaller cigar with a manufactured binder. Price isn't half as important as it used to be.
CI: But it seems that consumers hold the cigar in higher esteem today. It's not a casual throwaway event anymore, it's an integral part of their lifestyle.
Zaniboni: No question about it. Let's face it, it's no longer a nickel or a dime. You can't be unemployed and smoke cigars today -- unless you're married to somebody rich.
CI: So what's next?
Zaniboni: I almost feel like everything is settling down. Our business is as good as ever, if not better than ever. We've seen a wave of new manufacturers -- some survived and some didn't -- and the consumer is still looking for a good cigar. The best product will survive.
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