An Interview With Carlos Toraño
President, Central American Tobacco Corp.
From the Print Edition:
Bill Murray, Nov/Dec 2004
Carlos Toraño hails from one of the premier tobacco-growing families of Cuba. When his father and family lost their tobacco farms to nationalization after the Castro revolution, the Toraños spread about the world, sowing tobacco seed in their footsteps. After his father's death in a tobacco field, Toraño entered the family tobacco business, and later began brokering and then making cigars, eventually putting his name on a cigar brand. Today, the Toraños make cigars for a variety of customers and are building their family name into one of the established cigar brands of the modern era. Senior editor David Savona sat down with Toraño in his Miami office to talk about his past, present and future in the cigar business.
David Savona: Let's talk about your history, because a lot of our readers don't know about the rich history of the Toraño family. Would you take us back and tell us how the Toraños got involved in tobacco and cigars?
Carlos Toraño: Of course, everything begins with my grandfather, Santiago Toraño, who came from a very small town from Spain. The company began in 1916, and he probably came [to Cuba] around the end of 1915, beginning of 1916. He came from Spain to Cuba, and like everyone else at that point they were looking for jobs. In 1916, he was a young man of about 18 or 19 years of age, and he began Toraño & Co., buying tobacco leaf and reselling it. And that, little by little, became a bigger business. During the 1920s he brought his three brothers from Spain to join him at the company, and for about 15 years they all worked very closely together in one company, and they all got married. They all had children, and they all decided that every member of the family wanted to have his own company, so the big Toraño company divided into four different companies. I actually always say that every male in the Toraño family was really born into the tobacco business one way or the other. At one point I think there was about 16 of us.
Q: Were they competing with each other?
A: Well, in a certain way, yes. We were in different regions, different farms, and we all were very close to each other and helped each other out. It was a competition of who was the best worker, who was the best dealer, who was the best grower. In the 1930s, we started to buy farms and then we became growers. Santiago had four children: Santiago Jr., who died at the age of 20, my father, Carlos, Jose, and Jaime. And, basically, the growing history is the history of the brothers. Each one had a different region. They were all tenors. So anybody who knew the Toraño family, anytime, any guest, anyplace, nighttime was drinking time and singing time.
In the 1930s we became basically growers of wrapper. And from one farm we ended up with 23 farms and we owned about 400 to 600 acres, between 23 different farms. We owned probably 11 or 12, and we rented the others.
Q: Tell me what it was like in those days. What kind of tobacco were you growing?
A: We specialized in shade wrapper. Every single farm. The Corojo seed and the Connecticut seed.
Q: Connecticut seed. Was that prevalent in Cuba back then?
A: It was very famous at the time.
Q: What was that wrapper like at the end of the process?
A: Beautiful, a light brown. Not as light as Connecticut we see today sometimes—a little bit darker—but it was absolutely beautiful tobacco.
Q: How was life under Batista?
A: It was very good for business. Batista was the kind of dictator who wanted to be loved by the people. Life under Batista was very easy. Batista was a pro-business man. One of the funny things about the dictatorship of Batista is that there were so many newspapers in Cuba; we probably had 30 or 40 in the island, and in magazines, probably about 100 magazines, so we can talk to different people, and they could say almost anything they wanted to.
Q: Tell me about the revolution.
A: I remember we came back from visiting the farms, and we were riding horses, probably at midnight. December 31st, 1958. Batista had left. So it was, "Oh my god, what is going to happen?" It took us seven days to drive from the farm in San Juan to the city, to our home in Havana, because all the roads were closed. All the towns—you could not get into any town, because everybody wasn't working. And in every town that we had to cross—there must have been about 20—my father gave a revolutionary speech.
A: I hate to say this, but [laughs], but he always felt the [Batista] dictatorship was awful and we, like most people, were very excited about the possibility of a new system, a very democratic system. These were the expectations: we were going to go into a new era—a democratic system, not a dictatorship. Little did we know that 45 years later, we would still be talking about it.
Q: Your father had given him money.
A: Probably over a million pesos at that time, which is a lot of money for that time. We're talking about a lot of money. I remember the discussions between Ramon Cifuentes [the maker of Partagas who was anti-Castro from the beginning] and my dad. My dad said, "You're crazy, you don't know what you're doing."
Q: When word of the nationalization first got to you, what went through your head?
A: We realized very soon after Fidel came into power that we had made a major mistake, because this was a communist revolution and that there was no way to put it back. The tobacco and the sugar [industries] were the most important ones, so they were the first two that he took over. And you had a lot of people who began to ostracize you because you were not part of the revolution. So the first concern was your family. My brother-in-law was arrested, was let free and was exiled. He left for Peru and then to Spain. My mother, my sisters, my nephew, they all followed.
Q: Was it easy to leave at that point still?
A: It was easy. I remember all that we could take out was $100.
Q: What happened to all your family's wealth?
A: All the bank accounts they'd taken over, the farms were taken over. We lost everything. The Toraño family begins to exit the island. We were in Jamaica, very close with General Cigar. My father lived in the Dominican Republic. Francisco [one of Santiago Sr.'s brothers] lived in Mexico. Jose, a cousin on my father's side, moved to Costa Rica and to Panama. Arturo [another cousin] went to Jamaica and to Brazil together with me, and in 1980 [several of us] went to Ecuador and we went to Mexico. So like I always say, the history of the Toraño family is the history of the tobacco world. That's why in today's world my feeling is, of course, that the best tobacco is grown and the best cigars are made outside Cuba.
Q: Let's talk about your father's journey to the Dominican Republic.
A: When my dad went to the Dominican Republic, he knew in his heart that the soil in the Dominican Republic was very similar to the conditions in Cuba. My dad was working with the Institute of Tobacco. In 1968, he became independent of the Institute. Of course, in the 1970s—late 1960s and 1970s—the big wrapper in the States was candela. So [for most of] the growers who were in South America and Central America and the Dominican Republic, if you were involved with wrappers, you were involved with candela.
Q: Your father died at a fairly young age.
A: Dad died in 1970, when he was just 57. It probably was about 11 o'clock. He was growing candela. You have to get the tobacco sheds very hot through either gas or coal. So you had to watch for burning embers. You had to have people supervising all the time, but you cannot be inside of the shed more than a couple of minutes at the maximum, due to the heat. For those 36 hours, whatever it took, it was very dangerous. So my father comes into this house and he finds these people sleeping. They said my father's heart blew from his rage at finding these people asleep, and the threat was that the whole thing could burn down. He just dropped right there. By the time they took him back to Santiago, he died.
Q: That's terrible.
A: Probably there has never been in the history of the Dominican Republic somebody who loved the Dominican Republic more than my father did. He would have been the happiest man to have seen what happened to the Dominican Republic during the 1990s. He was in love with the Dominican Republic. He believed the Dominican Republic would have been bigger than Cuba.
Q: Your dad died in what year?
Q: Now where were you at this time?
A: At that time I was working with Litton Industries in Miami, selling new computer systems. My Uncle Jaime died in 1974 and my cousins took over, but my cousin Jimmy also had a heart attack and suffered cancer. So he said the family should all get together again, be one company. [He said,] "I need your help." I was very close to my cousins, so I said yes. And that's how I got involved in May of 1974, and it was basically in the growing area. So we went to the Dominican Republic, we went to Costa Rica and we got involved very closely in Mexico and then in Ecuador.
Q: That explains your tobacco-growing business, but today you're involved in making cigars. Can you tell me about the creation of your company, Central America Tobacco Corp.?
A: In the beginning it was Toraño & Co. Due to legal situations and economic situations, in 1980, '81, it changed to A.S.P. Enterprises Inc.
Q: Central America Tobacco was part of A.S.P.?
A: Actually, Central America Tobacco really was a creation of Alfredo Perez [the founder of A.S.P.]. And the original members of Central America were Alfredo Perez, Silvio Perez, myself and my two cousins. During the 1980s, the two cousins leave the company, so we divide Central America from A.S.P. and we eventually went our separate ways. Central America Tobacco was really, really small.
Q: So Central America Tobacco is a tobacco broker, and A.S.P. is a tobacco grower?
A: Yes. But the people that are working with Universal Leaf want to get involved with the A.S.P. operation in Mexico. We became partners, but that created a new problem for this little company that we had. Central America Tobacco was now involved also in cigar brokering. And we were selling to Consolidated, we were selling to General, we were selling to other people who were in the cigar business, and Universal never wanted to be involved in the cigar business whatsoever. It became very complicated. How do you explain to some of the people who are buying the leaf that we are also involved in competing against them in cigars? So in 1991 we have to separate the company. Nobody wants to buy, so I buy Central America, which already has a little history.
Q: So this is an amicable split?
A: Oh sure.ery friendly.
Q: So in 1991 Central America Tobacco, the cigar broker, becomes your company?
A: And beginning in 1992 the market begins to grow. The timing was perfect. [Laughs.] The timing was excellent.
Q: Now describe your business as a cigar broker in 1991.
A: At this point I didn't own any factories. I begin to work with three or four companies that I know well, so I know I can depend on them.
Q: At this time there's no Carlos Toraño cigar, right?
Q: So tell me what happens next. All of a sudden, in 1991, you have a company that brokers cigars—it's a hell of a time for this to happen, seeing as it's just before the beginning of the cigar boom.
A: We grew magnificently well. We decided in 1994 we were going to begin our distribution of our own brands. And the first one was Carlos Toraño Dominican cigars.
Q: Why didn't you want to own a factory at this point?
A: It was very comfortable to be in the middle. You buy, you sell, you collect, your dollar multiplies very rapidly now. You turn around that dollar maybe 12, 15 times a year. Much nicer to be in the middle, out of your own factory. But you really don't control your own destiny. You don't control the quality. We realized in this business [that the] middleman will disappear. The communication is getting better, computers are getting better, now the Internet—everything is coming in. Little by little we realized we have to have our own factory, and the first factory we really owned was in April of 1998.
Q: And which one is that?
A: That is Honduras. [By] then we had a Toraño [cigar] in the Dominican Republic. We had seven or eight brands [overall].
Q: So in the boom you came out with a bunch of brands.
A: And in 1998 many of our brands disappeared.
Q: How many brands?
A: Five or six. Seven or eight. [Laughs.] Suddenly the whole thing stopped. So we realized, if we want to stay in this business in the end, you don't have anything unless you have your own brands. So we begin to decide that we have to very seriously make the Toraño brand, under our own name exclusively, and these other brands will have to disappear. The idea is if we were going to put our name on it and if you smoke a Toraño cigar from our factories, it is going to be the finest that we know how to make. There's no more excuses that it came from John or from Peter or from whomever, [or] they didn't have tobacco, or they did this other brand. We're going to make sure that if it becomes a brand, it's going to be consistent, and let us just build it from scratch little by little. The quality is the No. 1 thing.
Q: You couldn't get consistency not owning the factories?
A: Absolutely. You've gotta have control. We basically sat down and we gave ourselves 10 years, because to make the brand takes a long time. Of course, we have a lot of money or whatever it is in the bank, but in 10 years we'll lose our shirt. If we sold 18 million cigars in '97, we sold 2 million in '98.
Q: Did you really go from 18 million to 2 million?
A: And even though we're now back to 14 to 15 million, we're doing very good cigars.
Q: What's it like dealing with a drop like that?
A: Scary. [Laughs.] But again, we made a commitment that we're gonna do it, that we were doing it for 20 years, this is what the family had done, this is now our name that we're gonna build.
The other thing that we realized is, yes, we are very much involved in tobacco, yes, I bought a lot of cigars, yes, I can recognize a good cigar, [but] I don't know really how to manufacture cigars, so I need somebody that I trust implicitly, completely, who can become my partner. And this is where Fidel Olivas comes into play. I know Fidel for 20 years. He was Nestor Plasencia's right-hand man. He's a very good manufacturer of cigars. He worked over there in Nicaragua in the 1980s, and I knew him when he became associated with Tabacalera. And Fidel calls me one day and says, "I'm not happy with the Spaniards. I quit." I said, "Fidel, you just called at the right time. [Laughs.] Let's get together." And we became partners on the manufacturing side.
Q: You make cigars for other companies. Tell me about that.
A: All of our clients, they come first. And we have to be loyal to them. And they'll be loyal to us. And we recognize how strong the relationship is with each of those clients.ery much so. And we are so happy for the success that they have because it's part of our success. And we have very good clients.
Q: Who are some of your clients?
A: We have some clients that actively promote the fact that we do their cigars and we appreciate and we honor that. But there's some that don't. It's not part of how they market their cigars. We have a very unique relationship as you know with C.A.O., where we've actually set up a separate entity that just makes their cigar. It's a tremendous relationship both on a personal level and on a business level.
Q: Say I come to you as a client, and I want to have maybe a full-flavored cigar, but I don't know what kind of tobacco I would use. Take me through that process.
A: Basically the factory already has an idea. We have talked a little bit already. We'll probably get a little background on what type of cigar you're looking at and prepare probably seven to 10 different blends with different types of cigars. And it can take a few days to make over two or three brands. This one you like, so let us begin to make small changes, and then we come to two or three that we like a lot. And what you'd usually do then is send [them] out to several of your clients, and you come back and say this is the blend that you want. And we let you know this is the blend. And for you to feel good that this brand will continue, we guarantee this is the blend and this is the way that it will stay.
If you were going to go to our factories, you would see tobacco from Jamaica, the Dominican Republic, Mexico, Colombia, Peru, Brazil, Costa Rica, Panama, from Honduras, from Nicaragua. We experiment, we blend. Most of the cigars that we do are probably blends of at least four or five countries. When you look at the Exodus, it has five countries. And most of the blends we do, they're difficult to make. And we really have to have stocks of inventory that are much bigger than people realize for the size that we are. We make miracles with Brazilian wrappers. Miracles. If you see the Brazilian wrapper when we buy it and the Brazilian wrapper when we use it, it doesn't even look like a kissing cousin; it just looks like something else completely. I experiment a lot. And when I see something that I think is unique, I'll buy.
Q: With all these tobaccos to choose from, is there anything you've bought recently that maybe surprised you by how it smoked?
A: One of the things I love is the Colombian filler. It blends absolutely gorgeous. It tastes so rich, so smooth, so nice, and probably I'm the biggest buyer of Colombian filler. It's very good.
Q: How much tobacco do you have in inventory?
A: Close to 4 million dollars' worth of inventory.
Q: That's a lot of tobacco. You're not a huge company, yet you cover the major countries. You have a factory in the Dominican Republic, a factory in Nicaragua and a factory in Honduras—the three biggest cigar-producing countries, not counting Cuba.
A: Remember, we were brokers and dealers in the beginning, so we were always involved in these three countries.
Q: Would you ever add another country?
A: Of course, Cuba is a question mark. The answer will always be important. We will always have to consider very seriously the situation in Cuba.
Q: Perhaps someday a Carlos Toraño Cuban selection?
A: Hopefully, the answer's yes. That does not mean we would exclude anything else. I actually believe we now must realize we are like good wine. There's not only one country in the world that makes good wine, and there's not only one country in the world that makes a good cigar.
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