An Interview with Edgar M. Cullman Sr.
Chairman of the Culbro Corporation
(continued from page 13)
Cullman was instrumental in overseeing the transformation of his family's company from a tobacco-farming operation into one of the largest premium-cigar manufacturers in the world. He was person-ally responsible for the decision to launch the Macanudo brand and he negotiated the purchase of the Partagas brand name. Marvin R. Shanken, the editor and publisher of Cigar Aficionado, sat down with Cullman in New York recently to talk about where the cigar industry has been and where it is heading.
Cigar Aficionado: Can you tell us how the Cullman family got started in the tobacco business?
Cullman: My great-grandfather, who was from Germany, dealt in tobacco there. With the great immigration of 1848, he came over here to the United States. His son, my grandfather, was born in the United States. At the age of 14 he went to work in the tobacco business buying Ohio tobacco. He was a fellow who never went to college and worked all his life. My grand-father, when he was about 20 years old, would go around selling tobacco. But he couldn't make enough money doing that so in the evenings he would play the piano; he was called "Piano Joe."
My father, who graduated from Yale in 1904, also went into the tobacco business. At that time, the tobacco business, especially the cigar tobacco business, was very respectable. My father was Joseph Cullman Jr. His father was Joseph Cullman, and my brother is Joseph Cullman III (the chairman from 1967 to 1978) of Philip Morris. Dad started in the tobacco business buying Havana seed, Connecticut broadleaf, some Cuban tobacco--actually very little--and tobacco in Wisconsin and Ohio. He also imported Sumatra tobacco from the Dutch East Indies. He would go to the auctions in Amsterdam for the wrapper tobacco from Indonesia.
C.A.: All the tobacco that your father and grandfather bought was for cigars?
Cullman: All for cigars. I forget how many...there were at least 400 cigar factories in those days. When Dad graduated from college there were more cigars sold than cigarettes. It was a business into which a great many respectable families went.
In 1906 or 1907 Dad and others started to grow tobacco in Connecticut. It was simply called Havana seed, or Cuban seed, that they brought from Havana and tried in Connecticut. It started off very slowly. Cigars were made of broadleaf wrappers, which are dark, maduro type wrappers; they still grow broadleaf wrappers today. When the shade wrapper began coming in, it was lighter, more appealing to the consumer. Then Connecticut shade began to be grown in quantities.
In the ensuing years, from 1910 or 1912 on, we continued to increase our acreage in Connecticut. And at one point there were almost 10,000 acres of wrapper tobacco growing in Connecticut. At the peak, there was 18,000 acres of all kinds of tobacco grown in Connecticut. And we became one of the large growers of wrapper along with American Sumatra, which also was a large grower of tobacco in that day.
C.A.: What was the reason that your father bought land in Connecticut rather than just buying and selling tobacco?
Cullman: His father thought he was crazy, but he said "I think we can grow tobacco in Connecticut." He liked the taste of broadleaf, which was growing there; he always thought it was great tobacco. So he started growing tobacco in Connecticut. We enlarged our horizons and at some point we grew about 1,100 acres. Then we bought General Cigar in 1961 and then we acquired American Sumatra. At one point, we grew 1,800 acres of Connecticut wrapper.
C.A.: You farmed or you owned?
Cullman: We owned and farmed 1,800 acres. And today the valley grows 1,000 acres altogether. The change has been rather dramatic.
C.A.: You mentioned that you bought General Cigar in 1961. How did your father go from being a grower to form a complete entrepreneurial company with brands and so forth. How did that happen?
Cullman: Let me go back a little bit in history. When I finished my service in World War Two, I said to my father that I wanted to go to work in the tobacco business. I never smoked. In fact, my grandfather bribed me that if I didn't smoke or drink by 21, he would buy me a car. He died when I was 20; I never got the car. I was very upset by that.
C.A.: You never smoked or drank until your twenty-first birthday?
Cullman: I was a very honest fella. When I said I wanted to work, Dad said, "you've got to learn the business." He wanted me learn how to roll a cigar and learn how to grow tobacco.
At that time, there was a cigar company in New York called H. Anton Bock. They made Bock Panatellas. It was a great little company on Second Avenue, between 65th and 66th streets. I would go there at 6 A.M. and set up at the bench. First, I learned how to sort the tobacco, how to shake the tobacco, the Cuban tobacco that came in, how to open up the bales, how to then case [moisten] the tobacco so you could use it. How to count the leaves. Then I had to sit down at a bench and learn how to roll a cigar. I never made money or my living out of that, but I learned how to roll.
C.A.: When was that?
Cullman: That was 1944. For three days a week I would be at the bench learning how to roll cigars and for two days a week I would go up to Hartford and help on the farm.
It was a wonderful life then because we saw all these characters from all over the country. Because they only used wrapper tobacco in those days; don't forget that all cigars were made with a natural wrapper. And today very few cigars are made with natural wrappers, except for high-grade cigars.
C.A.: Why did you decide to acquire General Cigar Company?
Cullman: Well I didn't like the fact that we were beholden to all of those cigar manufacturers. I felt that we ought to be more integrated, more independent and I thought the future of the business was in making cigars--not only growing tobacco. So in 1961 we put a group together and bought it.
C.A.: What did the General Cigar Company consist of in those days?
Cullman: Just cigars. White Owl was our leading brand, William Penn, Van Dyck and Robert Burns. Those were the major brands.
C.A.: Do you recall how big the company was in those days?
Cullman: I think it did about $30 million in sales.
C.A.: Was it profitable?
Cullman: Very profitable.
C.A.: Do you recall what you paid for it?
Cullman: I can't remember exactly what we paid for it. I think it was around $25 million.
C.A.: How old were you at this time?
Cullman: I was 43.
C.A.: Who made up the group of investors? Were they passive investors, family members, other tobacco people?
Cullman: Cullman Brothers put up some of the money. My family-in-law put up some of the money and some other group, friends of ours, who had been in tobacco and had stocks with us.
On the West Coast, the Haas family, who owned Levi Strauss, put up some of the money. And the Ford Foundation put up some of the money. That was our group.
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