An Interview with Tim Ozgener
C.A.O. International Inc. has now been in business for 40 years, evolving from making pipes to producing cigars.
From the Print Edition:
Daniel Craig, November/December 2008
Tim Ozgener, the president of C.A.O. International Inc., is following in the footsteps of his father, Cano, who founded the Nashville, Tennessee, company in 1968. The 39-year-old Ozgener is a former stand-up comedian with the eye of an artist, which is evident in the visually arresting packaging and nontraditional blends that make C.A.O. one of the world's most innovative cigarmakers. Ozgener recently sat down with senior editor David Savona to speak about the 40th anniversary of C.A.O., and the changes in the company since its January 2007 acquisition by Holland's ST Cigar Group, the maker of Henri Wintermans cigars.
David Savona: Let's start from the beginning, and talk about C.A.O. and its origins. Tim Ozgener: This is our 40th year. My father started the business in 1968 out of the basement of our home, and it was really just a hobby. It was his love of meerschaum pipes. We started shipping out of the garage of our home, and it was something that developed organically into a family affair.
Q: It started as a pipe business, and you and your sister, Aylin, would help your dad? A: Yeah. He is an Armenian who was born in Istanbul. He was trained as an engineer, and he didn't like the engineering of the pipes [that he smoked]. He improved the engineering, and he went to a retailer in North Carolina, and the guy said, "Where did you get that pipe?" And my dad said, "Well, I made it." The guy wanted to order some, and my dad said, "Listen, son, when you are Armenian, you never say no to an order. How many do you want?" [Laughs.] This retailer had some pull, and soon people started calling our house phone, and people wanted to order my dad's pipes. They wanted to make sure the pipe had the same improved stem, and he started putting his initials on the pipes, which are C.A.O. [for Cano A. Ozgener.] That's how the company started. He didn't have any employees, so when my sister and I were home, we would occasionally hear my dad say, "Are you done with your homework? Come downstairs." Downstairs, it would be a sea of pipes, and he would say, "This row of pipes—$45. Go." And he would hand us the pricing gun.
Q: So it was a very modest beginning. A: Oh yeah. Looking back on it now, there are some fantastic stories. He had a retailer that he would do barter deals with—pipes for green coffee beans, and he would cook the coffee beans in a pan. And I would wake up in the morning and I thought there was a brush fire in our house because there was a haze of smoke. I would say, "This smells horrible, Dad!" He said, "You do not know what the hell you are talking about. This is quality! I am roasting coffee—look how oily the beans are!" He was a mechanical engineer. He used to analyze microfibers, so he was into the specifics of everything.
Q: How did C.A.O. evolve from a company making pipes to a company that's best known for its cigars? A: When you're going to the trade show, it's basically pipes, cigars and humidors. And it's a small circle of people. My father got to know everybody, and he saw a trend of cigars having a resurgence, thanks in large part to Cigar Aficionado, and celebrities smoking again. So he said people need humidors. He was in London, found some beautiful antique boxes, bought 30 of them, shipped them here and lined them with Spanish cedar. They were all vintage pieces from the 1700s and they would sell out each time we went to the trade show. They would retail around $2,000, $3,000. So based on that demand, my father decided to make humidors that were more reasonable. And we were pretty proud of the fact that we were the first company to make humidors out of solid cherry, mahogany and walnut here in the United States. We found two woodworkers who were perfectionists like we were, I would help my dad put them in the back of his hatchback, and we shipped them from our home. Humidors quickly became a big part of our business—I remember at one point it was 60 percent of our business.
Q: It quickly overtook pipes? A: Meerschaum pipes were really a niche. It's not like briar pipes. Right around 1993, '94, there was an opportunity to get into cigars. That's when cigars were red-hot. Everybody wanted them, and demand superseded quality and supply. Most everybody told [my father] not to get into the cigar business, but there was one man who told him yes, the late Peter Stokkebye, who was buddies with my dad.
Q: The pipe guy. A: Yes, he and my dad had a very close personal relationship, Peter said, "Cano, go for it. Don't listen to anybody else. They don't want you in there anyway, you're just another competitor." So he went for it, and right around 1994, '95, my father hooked up with Carlos Toraño, who introduced him to Nestor Plasencia. And they made the first C.A.O. blend, which was C.A.O. Black.
Q: The C.A.O. Black came out during a crazy time for cigars. Was it a successful launch? A: There was a very specific blend and look that it was supposed to have. I remember going down to Honduras and seeing people I didn't know lined up outside of Nestor's door hoping to get him to make a blend. The factory was just crazy. One box would come in and [the cigars] would be chestnut brown—the shade that we had agreed upon. But another box would come in and it would be green. Another would be yellow. I was living in Los Angeles, and California was everybody's No. 1 market. I was visiting all the stores, and I'll be honest with you—it was easy to sell out there—retailers were buying anything.
Q: The inconsistencies didn't hurt? A: Initially, it didn't hurt it. People just needed a cigar to sell. But once things started slowing down, which took a couple of years, then people said, "Tim, I like you, but it's really hard to sell this product. Customers want something that's consistent."
Q: So when cigar sales started to normalize, you heard that there were some problems with these things. A: Humidors were still a bigger part of our business. Cigars were ancillary at that time, but nonetheless, we wanted to be successful with them. When you visit all these stores, I like to connect with people, and when I said, "Help me out, what will it take to be successful?" they said, "Try this, try that." You smoke a lot of cigars and you start developing a palate for what the consumer is asking for. That was an education for me. In 1998, we met with Douglas Pueringer at Tabacalera Tambor in Costa Rica. He wanted to diversify his business, he had some great wrappers in maduro, and that's when we came out with our L'Anniversaire Maduro. People smoked it and said, "This is a great cigar."
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