An Interview with Jose Padrón

Chairman, Piloto Cigars Inc.

(continued from page 3)

CA: But you own it?

Padrón: Yes. And we also own another one that we are producing tobacco on.

CA: How many cigars did Padrón make in 1997?

Padrón: About three and a half million or so.

CA: It's not that big an increase from the old days. But the average price must be higher?

George Padrón: Yes, and the style of the cigars have changed, too. Back then, a lot of the production was short fill.

CA: What is the history of the Anniversary, one of your best cigars?

George Padrón: I'll answer that. Before we entered the nationwide market in 1993, we had primarily produced for the Miami area. At the time, we had sold more than 130 million cigars, mostly in the Miami area, thanks to a number of things, including write-ups in national newspapers. We also had done some direct mail sales.

CA: From the Miami factory?

George Padrón: From the factory. We also began to have production in Honduras in 1979 as well as Nicaragua.

CA: Where were the cigars rolled?

George Padrón: They have been rolled in Nicaragua and Honduras. We stopped producing out of Miami around 1974 and all production shifted to Nicaragua at that point.

CA: Last year, you produced 3.4 million cigars. How many were made in Honduras and how many in Nicaragua?

George Padrón: About 30 percent of the cigars come from Honduras.

CA: Do you still have back orders?

Padrón: No, we stopped taking back orders two years ago. If you run out, order from me. You can't have so many orders just sitting in the computers. For example, we got a shipment into Miami of 300,000 cigars a week ago. By the end of the week, we got rid of all of them.

CA: How many cigars do you expect to produce in 1998?

Padrón: Four million, if possible. I can't predict really how many will be made and anyone that does make those predictions doesn't know what he is doing. It has to do with the processing and the curing of the tobacco. For example, that little cigar [Principe], do you know why are we producing that little cigar? This way we can use a smaller wrapper leaf that comes from a lower part of the plant. Last year, we didn't produce that size, and we made fewer cigars.

CA: What is the production of the 1964 Anniversary?

Padrón: The Anniversary production last year was about 150,000 cigars. This year it may be that we will approach the 300,000 mark; we have enough wrapper in inventory to do that.

CA: It isn't much.

Padrón: No it isn't, but for me this cigar is the apple of my eye. I want the integrity of this cigar to remain constant. If I would have wanted to produce 2 million of these cigars I would have, but it wouldn't be the same cigar.

CA: How would you describe the strength and the flavor of the Anniversary?

Padrón: The flavor is my secret [laughter]--a secret I won't be sharing with anyone. It is a medium strength. People say that it is a good flavor. I smoke my own cigars and I think it is good but I will let the public dictate.

CA: Is there any special taste that you find in your cigar which makes it...

Padrón: I produce tobacco to my taste but I can't smoke it all myself. First of all, the filler, which is the detail that others have overlooked these last few years, needs to be well cured. But the wrapper, too, must be well aged so that when you smoke a cigar, your mouth is left with a smooth taste.

CA: What was the reason you created a 30th-anniversary cigar?

George Padrón: We introduced the Anniversary in 1994 to commemorate our 30th anniversary of being in business. It was something special as we went to nationwide distribution.

CA: Are you going to continue that line for many years to come?

Padrón: It will continue.

CA: Why did you decide to box-press the cigars?

Padrón: Because they reminded me of the squared cigars of Cuba that I used to smoke. It is the only thing that I have actually copied from a good Cuban cigar. Everything else about the cigars is based on my own experience. Once, in 1965, I was making a No. 4 size and selling it for 30 cents apiece. I was selling the box for six dollars. Someone came to the factory and told me that he had 1,000 empty boxes of H. Upmann. He said he'd pay me $10 a box if I'd just make a cigar just like the H. Upmann. I told him that the one I would make for him, if I would even do it, would be better than the H. Upmann. I said I had no need to imitate anyone else and I wasn't going to start with him. After that, I could still go to sleep at night with a clear conscience.

CA: So many other factories have contracts to make other brands. Why don't you do that?

Padrón: When you have a factory, you must make the cigars all the same. A cigar factory that has to make more than one brand can no longer control its production. You can't make one brand and distinguish it from another; it's impossible. In my case, I never wanted to do it. If I had wanted to, this year I could have produced 10 million cigars or 20 million, having someone make 5 million here and 7 million there. I tell you: no no no. Why? Because we are concentrating on having the best brand, including those produced in Cuba.

CA: George, when did you enter the cigar business?

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