An Interview with Carlos Fuente Sr.
A discussion with the head of Arturo Fuente Inc., one of the world's largest producers of premium hand-rolled cigars.
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C.A.: After your own brands, what would be the largest non-Fuente brand that you would produce: Cuesta Rey?
Fuente: Cuesta Rey is one of our biggest customers. The Newman's Cuesta Rey line and La Unica line are our next largest brands.
C.A.: You also have other brands that you produce. How many years have you been producing Ashton?
Fuente: The Ashton line? Time goes by so fast, I don't keep up with time! I think the Ashton, we have been producing it now for about five years.
C.A.: Given the rapid recent rise in demand and the scarcity of cigars, wouldn't you be better off just producing your own brands?
Fuente: I can understand that everybody thinks so, but it doesn't really work that way. We have about 1,000 people working on the manufacturing side, and the point is that you have to keep people working all the time. If you have problems like the supply of Cameroon wrapper for our brands, you have to have work for the rollers. The day that you can't produce some size of Fuente, you've got to keep on producing other things. It may be a different brand, different wrapper, different tobacco, and that's how you've got to keep up with the production.
C.A.: So you don't look over your shoulder and say: "Gee, I wish I had that tobacco production for Fuente." You basically say: "This helps to balance on a long-term basis our production necessities, our employee obligations"?
C.A.: How many rollers are there at Fuente?
Fuente: We have nearly 500.
C.A.: Do you have a problem finding and training rollers? Is there much of a turnover? Is that a problem area in production because it's such a highly skilled area?
Fuente: At one time it was hard, but it isn't to us anymore. We have been training people since day one in the Dominican Republic. We've always trained people, and we have done so many things for our people that they want to work for us. We have our doctor in our place. We give our workers hospitalization even though hospitalization there is usually provided by the government. On top of that, we give our workers buses and transportation. We do so much for the people, that we don't have problems.
C.A.: Is it an hourly wage or piece work?
Fuente: It is mostly piece work.
C.A.: Cameroon tobacco is obviously critical for your cigar production. Knowing that there have been several crises in Cameroon in the last couple of years, how are you able to find and have enough Cameroon wrapper to meet your needs?
Fuente: Cameroon wrappers have been a problem in the past year, but our supplier is the Meerapfel family in Belgium. We work very closely with them and we have a very close relationship. I believe that there are only two manufacturers getting enough of the real Cameroon from Africa. And they have been able to supply us, not for all of our needs but very well. The problem is that though we are getting Cameroon, it's not all usable. So you have to sort all of the tobacco again and again, even after someone has gone to the trouble of resorting it. We still are having trouble, especially with the larger size Cameroon wrapper.
C.A.: Is there light at the end of the tunnel?
Fuente: We don't sleep some nights thinking about it. We don't know what's going to happen, or what's going to be done.
C.A.: Do you have inventories for this year and next year?
Fuente: Yes. We don't know the exact amount we have for production. If you want to go by the bales we have for this year and next year, we're OK. But the problem, like I just saw last week in the Dominican Republic, is the yields from those bales. We're getting some Cameroon tobacco that we have sorted from 170-pound bales and found that only 20, 30, 40 pounds is usable. Some bales have usable tobacco up to 50 or 60 percent. But down the line, you don't know exactly how much usable tobacco you have. That's why we are so careful with production. No matter how much we have in back orders, we can just produce so much.
C.A.: How much aging does a Cameroon wrapper get, between the time that you receive it and the time that you use it on a cigar?
Fuente: At least two years.
C.A.: And then once you make the cigar, how much aging before you are willing to ship it?
Fuente: That depends on the size. We always age certain cigars at least 30 days. Hemingways are aged six months. We don't release one Hemingway cigar until it's been in the aging room six months. Don Carlos is aged for a year.
C.A.: Given the fact that you age the Cameroon wrapper for a minimum of two years, right now you don't have a problem, but might you have a problem next year?
Fuente: It could be that next year we will have a problem. I mean, we have a problem now because you have to replace what you're using, and that's a problem. You have your inventory, and you see your inventory falling off.
C.A.: What are your options?
Fuente: Change the wrapper.
C.A.: Change the wrapper or reduce your production?
C.A.: Is changing the wrapper a serious consideration?
Fuente: We have thought about it, but we have other ideas now. As I said, we are big believers not to change. But a lot of people manufacture cigars, and they are forced to change from time to time. We will just come out with new Fuente brands. And we're already going to start making a Fuente with a different wrapper. But we're going to have a little different packaging. We're going to tell the consumer about this type of wrapper. So when they buy it, they know it's still going to be a Fuente, but it will be different. And when we have the Cameroon tobacco, we'll still produce the classic Fuente.
C.A.: That way the consumer will expect a different taste in the new cigar.
Fuente: Yes, and that it is a different wrapper. But they'll know it still is going to be a Fuente cigar.
C.A.: But it will have a slightly different taste?