A discussion with the president of Villazon & Co., makers of Hoyo de Monterrey and Punch.
(continued from page 4)
CA: Yes, just like that.
Llaneza: It's from Nicaragua.
CA: I'll ask you about that wrapper in a minute. But in 1980-'81, the cigar that you had developed and evolved for 15 years, you had to change. How did the market react to that?
Llaneza: Well, I think, it was amazing how favorably they reacted. Because we didn't give them such a drastic change. It was sun-grown Sumatran tobacco that had some taste to it. I don't think people really reacted negatively at all. Some really refined smokers would say, hey, they changed the wrapper. But it was absorbed into the marketplace, and we sold many more cigars after we went from the Cuban-seed to the Sumatra. If that tells you something, it's because of the cigar's combustion. If the combustion is good and it tastes good, people will smoke a cigar and enjoy it.
CA: How many cigars total are you making today?
Llaneza: We are making about 125,000 cigars a day, all handmade in Honduras, in Cofradia and Danlí.
CA: So that works out to 30 million to 40 million a year.
Llaneza: Yeah, 32 or 33 million a year.
CA: Does that include the production for Lew Rothman at J.R. Tobacco?
CA: What's the combined production of your two major brands, Punch and Hoyo, and should we include Bances in there, too?
Llaneza: We're not making many Bances now. We're gonna revive it.
CA: Are you going to put that Nicaraguan wrapper on it that you showed me earlier?
Llaneza: We've got too many wise people here [laughter].
CA: I guess that's an answer. So, what's the combined production of Hoyo and Punch?
Llaneza: They are about evenly divided, with maybe a slight increase in favor of Punch.
CA: OK. Then the total for the two is about 25 million?
Llaneza: Yes. Easy.
CA: Do you have plans to bring Bances back to market in a big way?
Llaneza: Yes, I don't know how big. My recommendation would be to basically bring it back in a slow way. There're so many changes that are coming about now. If you look in the catalogues, you see a lot of manufacturers that are making a million private brands and making bundles. So, it's important to launch it in the right way.
CA: There is a gap in the market for a high-grade, Nicaraguan-wrapper cigar. Padrón makes one, and it's a great cigar. Do you envision Bances becoming that kind of cigar?
Llaneza: We're going to try. If it's not Bances, it may be another brand. We're not shy about bringing Cuban brand names to the market. We have Flor de Allones, Ramon Allones, Rafael Gonzalez and we have Jose Gener. We have one after another. All kinds of brand names that we have owned since the Palicio deal. And General has more labels, too--all the Cifuentes labels, and they've already come out with Cohiba and Bolivar. They're doing what has to be done today to grow their business. There is such a variety of tastes today. A fellow who likes one of these, he doesn't like somebody's else's.
CA: Isn't it true that at the peak of the Nicaraguan cigar tobacco industry in the 1970s, the colorado, or red-brown, wrapper was as close to a great Cuban "Corojo" wrapper as any other in the world?
Llaneza: I'll tell you that the most beautiful wrapper that I have ever seen in my years in the cigar business were the ones that we had from Nicaragua.
CA: And those farms are starting to come back into production, right?
Llaneza: I hope so. They don't have barns on them yet. But yes, that is in the future. Of course, the stability of the country is an issue, too. We think that President Arnoldo Alemán is trying to do a good job. A lot of people criticize him, and others think he is doing great. But you know, the promises that a politician gives you, and the promises he can fulfill once he gets in office, are always different, and he's no different than any other politician. He's got a Congress that's a very powerful Sandinista Congress.
The Sandinistas, with all their disasters, couldn't destroy the soil. I can still see it in the beautiful valleys around Jalapa; everything grows like crazy there. It's great to see it back in production where it has been a disaster for so many years. I kept going there during the Sandinista years. My wife is Nicaraguan, and we still had family in Nicaragua. And we never stopped using tobacco from Nicaragua. But we made the decision that there was no way we could use the wrappers that they were producing. We bought the fillers.
CA: Wasn't there a period, too, when you couldn't even use Nicaraguan tobacco, during the Reagan Administration embargo?
Llaneza: Yes, but it was short. The people kept growing tobacco. There were a lot of people growing sun-grown tobacco. They still are. I'll bet there are 15,000 to 20,000 bales of filler tobacco being grown right now. And there will be wrapper soon. We'll see what comes of that. The possibility is there. The Padróns, for instance--they've been there all through this rough period. The cigars they've been able to keep making are the result of it being a small production. Their tobaccos are real pure, and Nicaraguan tobacco is so wonderful when you have the time to age it properly. That's the similarity it has with Cuban tobacco, and that's why I went to Nicaragua. You couldn't take tobacco from Cuba's San Juan y Martinez and San Luis and strip it and send it to the factory. You couldn't smoke it. Now, the aging of tobacco is getting back to normal in Nicaragua.
CA: Is there any target for when this new Nicaraguan-wrapper cigar might make it to the U.S. market?
Llaneza: Right now, it would be difficult for me to tell you. I myself don't know. I know about the components, but I can't tell you about the brand or anything because I have no idea.
CA: Can we say within the next couple of years it will be out?
Llaneza: Oh, yes.
CA: From your point of view, what happened in 1992?
Llaneza: In the beginning, Cigar Aficionado and Marvin Shanken got all kinds of criticism. He was telling you in the magazine that the only cigar to smoke was a Cuban cigar. But I've always said that he was doing us a big favor. He was telling people that Cuban cigars were good. I've always said that ours was the only one that was fairly close to a Cuban cigar. That helped us tremendously.