Family Matters—The Perez Tobacco Growers
For the Perez family of Miami's A.S.P. Enterprises Inc., tobacco growing is more than just a career—it's in the genes.
From the Print Edition:
John F. Kennedy, Nov/Dec 98
The old man puffs heartily on his cigar, sucking at the smoke as if it is sweet nectar from his youth. Outside the Miami warehouse where he stands, the thermometer reads 100 degrees; inside, wall-to-wall with canvas-bagged bales of tobacco, it is only slightly cooler. But the man does not mind. Stoop-shouldered, walking with the help of a cane, a million years of working the tobacco fields seeming to rest on his back, he exhales a fragrant plume and he smiles. All his life he has been smoking cigars, growing and selling tobacco, feeling a strong attachment with the product that supports him. But last year, after his 75th birthday, his doctor insisted that it would be best for his health if he stopped smoking cigars.
He inspects the perfectly even burn of his cigar and, in a thick Cuban accent, says, I asked him if I could have just one a day. But he said no. The man, Silvio Perez, director of a $50 million-per-year tobacco growing and brokering concern called A.S.P. Enterprises Inc., glances toward a camera and strobe that have been set up near an artfully arranged backdrop of tobacco bales. It is where he has just had his picture taken. The photographer wanted us all to be smoking, he says with a shrug and a smile. Now, I can't waste the cigar.
Whether smoking cigars or not, Silvio and the rest of the Perez family men have tobacco in their genes. Silvio's son, 52-year-old Alfredo, A.S.P.'s president and chief executive officer, runs the company's day-to-day operations; Alfredo's son David, who's been interning at various tobacco concerns since he was in high school, is an assistant vice president and the head of sales; David's brother Joseph, also an assistant vice president, oversees the growing operation in Mexico, and brother Andrew is in charge of seed development. Together, the Perezes have transformed their modest family business into a tobacco growing and selling dynasty. Along with their partner, Universal Corp., a Richmond, Virginia-based leaf dealer that owns several tobacco companies, A.S.P. provides tobacco to almost 270 cigar manufacturers around the world.
Though the cultivation of tobacco has been a family trade for at least five generations, nobody could have anticipated the kind of success that would transform the current crop of Perezes into members of Miami's wealthy émigré class of Mercedes-driving, Rolex wearing, property-owning Cuban-descended businessmen. And, like all great cigar stories, this one begins south of Miami, in Cuba, on La Pequiña Cabaña, the Perez family farm in the town of San Antonio de los Baños, about 25 miles from Havana.
In 1950, two years after Jose Perez, Silvio's grandfather, passed away, Silvio's father, Dionisio, was the only one of 13 siblings who wanted to work in the tobacco business, a passion that was shared by his son. But with the rest of the Perezes pursuing other interests, liquidation of the family holdings was inevitable. After the land was sold to Havana-based Toraño & Co., Silvio was retained by Jaime Toraño to manage the farm and continue growing its candela wrapper. By the late 1950s, he ran five farms owned by Toraño and 35 others that the company financed.
Soon after Castro came into power, however, Silvio's life was turned upside down. On October 3, 1960, soldiers appeared at the gates of La Pequiña Cabaña. They announced that the farm now belonged to the government, not to Toraño & Co. But since members of Castro's regime knew that Silvio was knowledgeable about tobacco and an intelligent farmer, they made him an offer: stay on and cultivate tobacco for Fidel.
Recalling the degree to which Jaime Torano had initially supported Castro, Silvio refused to work under the new dictator who had snatched away his boss' farm. Silvio recalls one of the soldiers replying, Well, if you do not work for us, then you have 24 hours to leave. Silvio looked at the soldiers, looked at the land, and considered his options. If it doesn't hurt the revolution, he told the soldiers, I'd like to take my car, my furniture and my two pet monkeys with me when I leave. The troops agreed to this.
Silvio recruited a few friends to help him pack, and he drove to his mother's house. Putting his belongings into storage and securing a temporary home for his family, the 37-year-old Silvio quickly took advantage of a visa he had for travel to the United States (the Toranos regularly sent him to Florida on business) and he flew alone to Miami.
With the help of a friend, Silvio improvised a new life for himself. A manufacturer who is now deceased, Jimmy Corral, one of the big buyers of tobacco from Cuba, deposited some money into an account that he opened for my father, recalls Alfredo. Then he gave a working contract for life to my mother and father so that we could obtain the proper visas for coming to the United States. Other friends helped to speed up the process and [my mother, Olga, and I] left Cuba on the 16th of December 1960.
Although they were grateful to have escaped Castro, the Perez family was hardly satisfied with their situation. Few Cubans lived in Miami at the time, and Spanish was an alien language to the locals. Silvio's spirits may have been lifted one day when he spotted a small Cuban coffee stand near the just burgeoning Calle Ocho, but the dire reality of his financial situation was always driven home by the cigars that he was forced to smoke--Philippine stogies that were three for a nickel rather than the rich Cubans to which he had become accustomed--and the work that he had to do. How'd you like to go from working with tobacco in Cuba to washing cars in Miami? Silvio asks rhetorically. It was impossible to feel good. Those times were very low.
Growing up in Miami, Alfredo attended high school and worked part time as a counter man in a cafeteria before becoming a butcher. All the while he was attending school and watching his father toiling away at unrewarding work.
Then, ironically, the dictatorship that compelled the Perezes to leave Cuba was indirectly responsible for putting Silvio back in the cigar business that he loved. Because of the embargo against Cuba, there was a need to produce candela wrapper in the United States, says Alfredo. One of the gentlemen with whom my father worked in Cuba, he was contacted by Edgar Cullman [of Cullman Bros., which later became General Cigar]. Cullman was looking for people who could help him grow candela in Connecticut. Silvio Perez was a natural choice.
Leaving behind his son, Silvio embarked on the long drive north from Miami to Cullman's farm near Hartford, Connecticut, in May 1962. The operation was modern and big-budgeted, a far cry from the more primitive farms in Cuba. It was a big learning experience for my father, says Alfredo. Farmers harvested tobacco differently in Cuba. There they used the middle of the plant first, even though the tobacco starts ripening at the bottom. The idea in Cuba was to protect the [more valuable] wrapper, which comes from the middle of the plant. In Connecticut they harvested from the bottom on up. The fertilization in Connecticut was more advanced and so were the seeds.
Things began looking up for Silvio. Not only was he working with tobacco again, but he also found himself in the company of Puerto Rican field hands with whom he could communicate in his mother tongue. Nevertheless, the Cullmans encouraged him to learn English, insisting that knowing the language was mandatory for success in the United States. Every night when I went to school, sitting at a little desk, having to learn the language, I would think [horrible thoughts] about Castro, recalls Silvio, only half-joking.
Once the candela season ended, the Cullmans offered Silvio a full-time position. He accepted the offer and brought Olga and their daughter, Silvia (now A.S.P.'s executive secretary), to Connecticut, where they shared an employee's house on the farm; Alfredo, who was only 15 at the time, remained in Miami. He lived on his own, attending high school and working as a butcher. He'd wake up at 4 a.m. and go to the slaughterhouses to select beef that would go to the shop, then he'd attend classes during the day, and deliver meat until 11 p.m. For breakfast, lunch and dinner, Alfredo ate steak and drank milk, thinking that the combination would provide strength for the long days. But the hard work (and, says Alfredo, spending too much time in meat freezers) took its toll, and in 1962 he contracted pneumonia.
Concerned for their son, Silvio and Olga drove to Miami in October 1962 and brought Alfredo to Connecticut. It was right in the middle of the Cuban missile crisis, Alfredo recalls. My father saw all these military trucks heading south and he said, 'I don't know why we are going to Connecticut. Maybe we ought to be heading back to Cuba.' But the Perezes's destiny had already been set in motion.
His health restored, Alfredo continued his education at Hartford High. After school each day, his father encouraged him to learn the family business. [Cullman Bros.] vice president Joe Prinsky asked me if I really wanted to have my son working as a field hand, recalls Silvio, leaving the impression that Prinsky felt the position would be too lowly for a Perez. Joe said, 'He'll have to do everything.' I said, 'OK. Let him do it.'
The job was the equivalent of a first year in college for anybody desiring a career in tobacco. I had some background from going to the farm [in Cuba] with my father, Alfredo recalls. But I really learned how to do everything in Connecticut. As a field worker you seed the tobacco in the ground, you pick it, carry it, string it, cure it.
But after graduating from high school in 1965, Alfredo received a tempting offer. Nearby Whitney Aircraft offered him $3.40 an hour to work in its factory, which was $2 more than he could earn on the farm. It was a big temptation to jump, Alfredo admits. But Joe Prinsky took me aside and asked, 'You want to run a machine all of your life? Or do you want to be a tobacco man?' I decided he was right. I stayed.
In January 1966, Alfredo married a woman named Dorothea, whom he had met in Simsbury, Connecticut, and they began raising a family. During that period he graduated from field hand to head of a Cullman farm and warehouse; at the time Silvio headed up a warehouse of his own, and there was a sense of settlement to their lives. But it was not to last.
In 1971, Silvio's former boss, Jaime Toraño, who had also fled Cuba and was now a tobacco man in Miami, made Silvio an offer that he could not refuse: become a 50-50 partner on a candela wrapper farm in Nicaragua, north of Managua and in the heart of the country's tobacco-growing region. Silvio recruited Alfredo into the project, and soon their families headed to Central America.
The opportunity was alluring, but not without hurdles. Growers there had developed bad habits and were producing crops that did not meet standards to which the Perezes had become accustomed. There was no soil analysis, recalls Alfredo. People did not have the love for tobacco, because they were not traditional tobacco people. It was something they thought they could make money with, but their hearts were not in it. Slowly we began to change things.
Planning for the future, the family devoted each Sunday to cross-breeding tobacco and experimenting with new seeds. Though the work is a tedious, labor-intensive process that requires pollinating by hand, it has the potential to pay off with interest over time. For tobacco growers, the proper seeds are among the few competitive advantages, and, for the Perezes, it was a worthwhile investment. Eighty-seven percent of the 1978 crop was wrapper, totaling 300,000 pounds of prime tobacco, says Alfredo, explaining that routinely only 70 percent of a crop is suitable for wrapper.
A year later, following a political coup, the wrapper yield dropped to 5 percent of the crop. [Sandinistas] took over the farms--they wanted to grow the tobacco themselves--and we made an agreement with the government where we would sell the tobacco, explains Alfredo, hinting that the poor yield was the result of the takeover. We moved to Miami and began going back and forth, between there and Nicaragua.
Because the production was so meager, the Perezes sought other sources of income. In 1982 they turned to Mexico, where the farms were in the hands of a government-owned agency called Tabamex. Following a tip from a customer, Alfredo recalls, We approached them about buying their tobacco and selling it to our clients. The deal worked because we could put together whole packages for them, consolidating everything, making one package out of it, and providing the tobacco that each customer needs.
When Mexican farming was privatized in 1990, the Perezes were uniquely suited to offer support to the farmers whose product they were already selling. Unfortunately, the family lacked the requisite capital. So they entered into a deal with Deli Universal Corp., a Rotterdam-based subsidiary of Universal, in 1990. The Nether-lands tobacco company wanted a presence in Mexico, which the Perezes already had. The Perezes sold 50 percent of their company to Deli Universal in exchange for an infusion of cash. (Several years ago, Deli Universal sold its interest in A.S.P. to its parent company.) The idea was to combine A.S.P.'s agronomic know-how and Central America connections with Deli Universal's capital and management-planning expertise. Never mind that the merging of a family business with a giant corporation sounded like a recipe for disaster; Alfredo insists, It was very clear that they would give us the support, which gives us some benefit from the profits of the company, and we would be the management. That's the way it has been and we have had no discrepancies. It is collaborative. They have companies that we deal with; we buy and sell from them. But we operate independently.
The infusion from Deli Universal not only allowed A.S.P. to provide backing for farmers in Mexico, but it also paved the way for the Perezes to own their first operational farm outright since La Pequeña Cabaña was sold to Toraño in 1948. According to a fairly awed competitor, the Connecticut-type wrapper farm that the Perezes bought in Ecuador in 1991 is now on a par, in terms of quality and beauty, with anything located in the United States.It is regarded as the family's baby, and they treat the farm as a showplace, where trees are planted rather than knocked down, where seed technology is state of the art, where high-quality wrapper is produced by people who are proud to be working in such a place.
Ironically, the purchase was one that Silvio was initially skeptical to make. I was afraid to buy it because of what happened in Cuba and Nicaragua, he says, recalling military regimes seizing privately held property in both countries. I figured that you buy land and the same thing can happen again. Now, though, I am very happy to have bought it.
Ask 27-year-old David Perez when he first got an inkling that he wanted to be involved in the tobacco business, and he replies, When I was born. Like his father and grandfather, David learned the tobacco business from the ground up, harvesting a crop of tobacco with the Cullmans training with a tobacco broker in Europe, and working in a factory where tobacco is blended. All of this has come in handy for a tobacco salesman who likes to have one foot on the farm and the other in the boardroom.
At a family lunch in an Italian restaurant near A.S.P.'s Miami headquarters, David sits next to his father. He sips a beer and reveals that one of the secrets to the company's success is that its chief salesman has spent time in the fields. You cannot divide the growing from the [selling], he says. With our seed development we do what our customers want. A customer tells us that he would like us to try growing, say, a Sumatra seed in Ecuador, where we already grow Connecticut wrapper; we do that. The majority of that product goes to them, and we sell smaller amounts to our other customers as well. In most of the cigar business, growers make products that can be sold in the market, rather than customizing to meet the customers' needs.
The tobacco farms that A.S.P. owns or finances are located primarily in Mexico and Ecuador. The 5,000 acres in Mexico annually yield more than 400,000 pounds of Sumatra-seed wrapper and more than 4 million pounds of black tobacco, while the 4,000 acres in Ecuador, 1,200 of which are used for growing each year, yield more than 1 million pounds of Connecticut-seed wrapper and 100,000 pounds of Sumatra-seed wrapper, which is grown on special order. In Nicaragua, 500 acres yield more than 500,000 pounds of Cuban-seed filler and binder.
Meeting their customers' needs has not been easy for the Perezes over the past year, thanks partly to El Niño. Blue mold has been present for years, says Alfredo. But we have learned to minimize the blue mold by moving the seasons of planting to times of the year when the weather conditions are a little bit drier. In Mexico, for example, it's a problem, so we now plant a little bit earlier than normal, so the tobacco can grow when it is not so cold and wet. What also helps is to have long periods of time without the tobacco [growing in the land]. This avoids the continuous [spreading] of blue mold.
Such was the case in Nicaragua, says Alfredo, until the military takeover of land there. I would say we had as good an operation in Nicaragua as we have in Ecuador. But because of blue mold--which spread rapidly after the Perezes lost control of the farm there--we could not grow wrapper. Every time I go there, I think to myself, 'My God! What are we doing growing filler there? This is like a high-class wrapper operation, but we are growing filler and binder there.
Meanwhile, A.S.P. continues to stress the need for harvesting and selling high-quality tobacco that is at the peak of its flavor. We emphasize that tobacco takes its time to be ready, says Alfredo. We cannot do it any faster. Some customers have had to slow down their production in order to have everything done [in the proper time]. We like to ferment the tobacco in the traditional way, with it packed into bulks and turned from the front to the middle to the outside. We can turn it seven or eight times before the tobacco is fully fermented, and the process takes a total of 60 to 120 days.
Asked about plans for the future, Alfredo cites seed technology (We take no shortcuts) and the maintenance of his top-flight operation in Ecuador (It's not for me or for my children; it's for my grandchildren). But he insists that his goal for the coming years is to maintain a sense of consistency that is as unwavering as the genes that get handed down from one generation of Perezes to the next. We continue supplying the same customers and maintain traditions, he points out. We have not changed over the years, and you cannot say much more than that. We keep doing things the same way.
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