An Interview With Ashton's Robert Levin
Best known for creating Ashton, Robert Levin is a 30-year veteran of the cigar business.
From the Print Edition:
Arnold Schwarzenegger, July/Aug 03
(continued from page 1)
Q: Did you have a good feeling about VSG?
A: When I was smoking it in the Dominican Republic, I had a great feeling about the cigar, and I knew we had something special, and that it was going to be a grand-slam home run.
Q: Why such a radical change in the taste profile from Ashton?
A: People were starting to want fuller-bodied cigars, and I wanted to have something for everybody, for every niche in the market. It was time to come out with something for that segment of the market that wanted that full-bodied taste.
Q: Did you ever think they might be too strong?
A: At first. But after we aged them for a while, they were fabulous.
Q: So you ultimately got VSG instead of Ashton Crown. Tell us about Ashton Estate Reserve, which does have that Chteau de la Fuente wrapper tobacco.
A: We did get Estate Reserve, one shot, that was sold with the limited-edition humidor. And we are going to be coming out with the Estate Reserve again, with the wrapper from the Chteau de la Fuente farm -- limited quantity, we'll have it once a year, in one or two shapes, maybe 25,000 to 50,000 cigars a year. I'm not sure when we're going to get it.
Q: Is that going to be out at this year's trade show?
A: We're trying.
Q: Tell us about your business relationship with the Fuentes.
A: In 1992, Ashton was becoming fairly successful. I wanted the Fuentes to make them, and they wanted to have an interest in Ashton. So they became partners in Ashton.
Q: They became a minority owner of the Asthon brand?
A: Yes. And it's been a great partnership.
Q: What happened when you took your company public?
A: We put everything together under Holt's Cigar Holdings; then they became a partner in everything, because we had to put all the companies [the wholesale, mail-order and retail business] together.
Q: What percentage do they own?
A: Now they own 35 percent of the company.
Q: Do you own any part of Tabacalera A. Fuente?
Q: Tell me about going public.
A: I got caught up in the frenzy, and at the time the reason behind going public was to get the capital to make acquisitions and to grow. And a lot of the European companies came in and were paying outrageous dollars, and killed those plans. When they came in, they were paying 10 times what I thought certain companies were worth. We couldn't participate in that game, and we didn't.
Q: Looking back, was going public a good decision?
A: It was a learning experience for me. In hindsight, my personality did not go well with being a public company. I wasn't very fond of the quarterly reports, and a lot of things you have to go through to be a public company, You had to do a lot of things that I just didn't like doing. It puts undue pressure on you to try to do better every quarter. Long-range plans didn't really mean anything.
Q: Does the cigar business lend itself to being public?
A: I don't think so. Anything to do with tobacco does not lend itself to being a public company -- the cigar business especially. The cigar business is a small business, and it's a slow growing process. Unless you make an acquisition, you're not going to make huge jumps in growth these days. And in this environment, it's going to be very hard to grow at all. But you work and you do your best, and you'll grow. I didn't enjoy being head of a public company. It's very nice being private again. But it was an experience.
Q: Were you a target?
A: I had some inquiries, but I never pursued them, and I don't know how serious they were. Because of the Fuente involvementÖ
Q: Did that eliminate some potential suitors right off the top?
A: Oh, I'm sure it did. But I'm not sure anybody was that serious.
Q: Tell me about your newest cigar, La Aroma de Cuba.
A: I wanted to come out with a different type of cigar at a different price point. It's expensive to make cigars in the Dominican Republic, so we needed to go somewhere else. Also the Fuentes are really maxed out on production. I can't get any more VSGs, I can't get more maduros. They didn't have the production capabilities to do a new brand.
Q: So where did you end up?
A: I'd been talking to my friend Jim Colucci [of Altadis] for quite a long time, and I had been doing business with Flor de Copan [in Honduras] before Altadis bought the factory. I would buy a lot of their seconds, in bundles. And I thought it would be a good place where I could have a brand made. The name La Aroma de Cuba came from a Cigar Aficionado article. I read an article you guys did a long time ago on Winston Churchill. When Churchill was stationed in Cuba in his very young days, one of his favorite cigars was La Aroma de Cuba. So when I researched it, it had just disappeared off the face of the earth. I registered the name, and I'd had it for a long time, five years, before we came out with the brand. And I got a hold of an old label from the original La Aroma de Cuba, which was a beautiful label.
Q: Is that the original Cuban artwork?
A: It's a combination of the original Cuban artwork with another old label; our designer put both of them together. It's very similar to the older label, with a few additions.
Q: Is the wrapper from the factory's farm in northern Honduras?
A: It's a Cuban-seed wrapper that's grown in Honduras, but it's grown by Plasencia. Flor de Copan does grow wrapper, but they don't have enough of it to put on a brand. It's a very small farm. I wanted to use their wrapper, because it tasted great, but they just don't have the quantity to come out with a brand. And they don't have any big leaves to put on larger cigars.
Q: What's the rest of the blend?
A: It's Honduran and Nicaraguan filler, and it's Honduran binder, and it's all Cuban-seed tobacco. It starts at $3.70 and goes to $5. The packaging is beautiful and the cigar is excellent.
Q: How was the reception to La Aroma de Cuba?
A: La Aroma de Cuba has been accepted extremely well, and it was a pretty big hit at the RTDA [Retail Tobacco Dealers of America] show when we introduced it [in 2002]. Our problem, fortunately, is we can't get enough product. We're really behind. Hopefully we'll catch up in the next three or four months, but the demand has outpaced the supply.
Q: How many do you think you'll be able to sell in 2003?
A: We're hoping for a million.
Q: That's a fast start.
A: We're way behind that now. The shipments haven't been coming in as we planned. It's a great cigar, and it's very reasonably priced.
Q: Let's talk about some of your other cigar brands. Do you still make Premium Dominicana?
A: No. I learned a few things with that. We rushed something out because we were a public company. That was the main reason to come out then. We didn't have the right name, we didn't have the right packaging, and that was really rushed to market before it was ready.
Q: You felt the pressure to get something new to the market?
A: I was under a lot of pressure to get something out. There was a shortage of cigars everywhere, shortage of tobacco and cigars, and it was hard to come up with a product, and too rushed. The care and attention that you have to put into it just was not done. That was a good cigar, but everything was rushed.
Q: How has your business evolved?
A: When I first started Ashton, everything was being done out of the retail store. But as we grew and grew and grew, we needed some infrastructure, so we rented 8,000 square feet and we had a warehouse. And I'd spend half my day at the retail store, half in the office. And as you grow, the people you hire make or break your company. We were lucky enough to have people who do a great job and made it possible for the company to grow. I hired Mike Pitkow, who really runs the day-to-day operations; I knew Michael from college, he's an old friend. And we started a sales force in '96 or '97. We have 11 salesmen now, who cover the whole country, and I feel they're the best sales team in the whole industry. They are excellent people, hard-working. Manny Ferrero is our vice president of sales. He is the spiritual leader of the sales force -- he gives them the passion and the integrity they need to be out there on the road. Chip Goldeen, he's the national sales manager. We have a great crew. We have very little turnover. We have really good people top to bottom, and that's what makes the company work.
Q: How many people do you have now?
A: We have 71 people.
Q: And when you started working for your father?
A: Five or six.
Q: What size was the business when you took over?
A: About $600,000 a year.
Q: How big a company is it today, in terms of dollar volume?
A: We're private so we don't really give out our revenues.
Q: How do your sales today compare to your biggest year?
A: We're growing every year.
Q: It's bigger now than during the boom?
A: Yeah. When we were public we did $29 million. It's a slow growth. It's the wholesale business that's driving the train.
Q: Will it also be your most profitable year?
A: No. We're expanding; we're going to double our space. We've been here for five years, and we convinced the owner next door to sell us his property and the building next door.
Q: When you first created this joint headquarters and warehouse, did you think you'd have enough space?
A: I thought we'd be here forever. I thought it would be plenty of space. But what I need is more warehouse space. We need more people space, but it's the warehouse space where we're really crunched.
Q: Six years years ago, you said your business was split evenly. What's the breakdown now?
A: More than half of the business is now wholesale. The retail is about 7 percent of the business; mail-order is 30 percent, a little less.
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Tom Flack — Westerville, Ohio, USA, — January 31, 2014 7:38am ET
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