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A Conversation with Nestor Miranda

The founder of Miami Cigar & Co. talks about the rise, fall and rebirth of his Don Lino brand.

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Suddenly, the director of Miami Cigar & Co. found himself with a great brand but no cigars to maintain it. His annual sales plummeted from 12 million to 3.5 million.
Miranda struggled to recover from this adversity, ultimately suing the billion-dollar company that had supplied him to get back on his feet. The suit was successful, but the brand was also off the market for two years. Recently, Miranda, 62, sat down with senior editor David Savona to talk about his ups and downs in the cigar business, and how he has tried to reestablish Don Lino.
David Savona: You've been in the cigar industry quite a while now. Can we go back and talk about how you entered the business?
Nestor Miranda: I've been smoking cigars since I was 17, in Cuba.
Q: You were born in Cuba?
A: I was. I used to steal cigars from my dad. On Sunday, I'd go to the park and light a cigar and look like a big man. Everyone would look at me and say, ''Look at that guy with a cigar.'' It was like a lonsdale maduro—Regalias el Cuño. They used to make cigarettes. I always liked cigars. Always. My father smoked cigars, my grandfather smoked cigars. Actually, my grandfather used to carry 10 cigars in the pocket of his guayabera.
Q: Ten cigars?
A: And big cigars—Churchill size. So I think my genes came from my grandfather. I've always loved cigars. I was in the liquor business [in 1987 or '88 when] I was introduced to a roller who worked for Mr. Guillermo León [of La Aurora S.A.]. And he was rolling cigars, and the guy with him said, ''Would you like to have one?'' And it was a big Churchill, a León Jimenes Imperiales. It was nice. So I lit the cigar and I loved it, and I said, "I represent a [brandy] brand called Cardinal Mendoza, from Spain. I think we can come out with cigars and brandy. They can go very well together." He said, "I'm going to send you a humidor from the Dominican Republic—see what you can do with it." He sent me a humidor. It had 40 cigars—gorgeous. I said, "Man, this is beautiful." I called him and I said, "I like it, but 40 cigars is too much. How much is it?" He said, "$35." So when I saw the price and the beautiful cigar, I talked to my manager, and I said, "I think I have the item to promote Cardinal Mendoza." He said, "I love it. Let's buy 200." So for two boxes of Cardinal Mendoza, we gave away a humidor full of cigars. It was totally a complete success. So ever since that day I started developing an interest in cigars. My wife [Mariana] was doing nothing at the time, so I said, "Why don't we start selling cigars?" And we started selling cigars in liquor stores.
Q: Cigars were much cheaper back then. Tell me more about those old days in the cigar business.
A: I'm from the liquor business, so my mentality is geared to promotion, and to different concepts. In the tobacco business, it was the same people selling cigars, the same orders. I'm a different animal. I said, "What do we need?" La Aurora was making only a few sizes: No. 1, No. 2, No. 3, No. 4, No. 5. I said we need names—we need a belicoso, we need a robusto.
Q: They didn't have a robusto? I can't imagine a cigar company without a robusto.
A: No. They didn't have what the people wanted. We changed the whole thing. La Aurora started getting into better sizes, and that improved things. When you go into a tobacco shop and you show two boxes, you're going to sell one. But if I go with eight boxes, I'm going to sell four.
Q: When did you leave the liquor business to focus exclusively on cigars?
A: We started making Don Lino in 1989, at the old UST factory in Honduras. It was 80,000 cigars a year. I doubled the business in 1990, and we started doubling the business every year. We established Miami Cigar & Co. in 1989. My wife was handling the cigar business. I didn't see any future, but it was something I liked.
Q: Tell me about those early days.
A: We were selling Don Lino for $19 a box, and the bundles we sold for $8. When the cigar boom came in 1994, 1995, we were already in. In 1995, we began distributing the UST cigar line. And then in 1995 I retired from Southern Wine & Spirits. I worked for Southern Wine for 15 years, and Seagram for 10 years. I retired from the liquor business to work at Miami Cigar & Co. with my wife. In 1996, I was interviewed by Cigar Aficionado, and that year we ended up selling 12 million sticks. In 1995 we were doing 3.1 million.
Q: You went from 3.1 million to 12 million that quickly?
A: You can't imagine—it was so crazy.
Q: Don Lino was hot.
A: In 1994 we did 1.5 million [units], 1995 we did 3.1 million. In 1996, I calculated that I thought we would do probably 7 million to 9 million cigars. But I've never been too good at mathematics, so it was 12 million.
Q: So you picked up distribution of Don Tomás and Astral from UST, and you also began distributing La Aurora and León Jimenes? You soared to 12 million cigars?
A: That's right. It was the American dream.
Q: And of those 12 million, most were made by UST?
A: I'd say 75 percent of them were made by UST.
Q: Beyond your wildest dreams—great year.
A: We did 12 million cigars until the first week of November [1996]. We didn't finish the year. Why? Because in November, the great UST company decided to go on their own, and they called me and they canceled my contract, which ended in February 1997. They canceled everything. They stopped shipping merchandise.
Q: What about Don Lino?
A: They stopped shipping. They were making Don Lino. Don Lino was back-ordered about 3.5 million cigars, and they told me they needed [the production capacity] to make more Astral and Don Tomás and all that.
Q: This is November, this is before the holiday rush.
A: In November, my humidor was totally empty. La Aurora, León Jimenes, could not produce any more cigars. They could not. So they cut the cigars they sold in the Dominican Republic so they could send me cigars. That was Guillermo León.
Q: So in November of 1996, they said no more cigars? Were you waiting on an order?
A: I'd been calling the company. I called Greenwich [the Connecticut headquarters] and I said, "Listen, I have no cigars. Normally I receive a container. What is going on?" They said, "We have to tell you, at UST, we've decided to go on our own."
Q: I thought they called you?
A: I called to find out about the cigars. They called me the next day because I wanted to talk to the president. They said, "He's not here, but he'll call tomorrow." I said, "Listen, call the factory, send me two containers of cigars. They're sold already." So they called me the next day, the president of UST, and he told me, "Nestor, you did a great job, but we decided to go on our own." I said, "What do you mean? You're kidding, right?" They said, "No, we're going to be selling our cigars." I said, "OK, let me ask you something: what about my Don Lino? Because you make that brand for me." They said, "We'll call you and let you know what is going to happen with Don Lino." So it was a totally unexpected call, losing everything we built. I don't know how to face my family and tell them we lost everything. We don't deserve that. Especially that the line was given to Southern Wine. I worked for 15 years with that company.
Q: What was the relationship between UST and Southern Wine?
WILLIAM KENNARD MIDDLEBURG, FL, United States, June 23, 2014 5:42pm ET

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