An Interview with Edgar M. Cullman Sr.
Chairman of the Culbro Corporation
(continued from page 2)
C.A.: When was the first milestone in the development and the success of the brand in the marketplace? At what time did you realize that this cigar brand was something extraordinary?
Cullman: To be very frank with you I don't know. We added a few sizes here, a few sizes there, and it took off. And it just never stopped. It kept growing and growing and growing. We continued to make it that way, and it has been the most rewarding experience in my life: the success of Macanudo.
C.A.: Even the name may have been a hindrance then--Macanudo--whereas today you take it for granted.
Cullman: In Spanish it means the greatest, the best, the most wonderful. It was very special.
C.A.: Is Macanudo a product success, a distribution success or a marketing success? It is without question the largest-selling premium cigar in the United States. What was it that made the difference that put Macanudo head and shoulders above the premium-cigar-brand crowd?
Cullman: Consistency. It is a most consistent product. It was always the same. We were very careful about the ingredients, the aging of it and not putting it in the market until we were sure it was right. There was a lot of quality control in Jamaica.
C.A.: Consistency is not easy to accomplish because a cigar is an agricultural product. Even though you may have a certain blend, nature is going to play tricks on you and is going to deliver you something that may not be the same from year to year. How do you maintain the taste?
Cullman: It is very expensive. You have to have enough tobacco so that you can always blend it. You never rely on any one crop. You have to be sure that you have enough crops so that you never notice any change in the blend. So each "crop" of cigars is full of many different crops.
C.A.: How many years of inventory of tobacco for Macanudo and Partagas do you hold today?
Cullman: That's very confidential.
C.A.: Is it different today than it was 10 years ago?
Cullman: I would say that it is probably somewhat different--like everything, it changes. The tobacco changes, but we think we control what we grow and buy in Dominican, which is very fine tobacco and very much like Havana tobacco--as much as it can be. We grow it there and it is grown for us.
C.A.: How large is the Macanudo brand?
Cullman: It is quite large.
C.A.: Can you give me an approximation? I hear numbers around 10 million.
Cullman: That's on the low side.
C.A.: Has it peaked?
Cullman: Of course not.
C.A.: About how much of Macanudo's production comes from Jamaica today?
Cullman: Eighty percent is produced in Jamaica and 20 percent in the Dominican Republic. The division was only done to protect ourselves from any difficulty we might have in any one country.
C.A.: When and how did you end up owning the Partagas brand name in the United States since it is one of the original Cuban brands?
Cullman: Ramon Cifuentes, who was the owner of the family-owned Partagas brand of cigars in Havana, came to work for us when he got out of Cuba. He associated himself with us by selling wrapper tobacco. This was about 1963 or 1964. He did all kinds of odd things for us, as did (Benjamin) Menendez. A lot of the ex-Cubans came to work for us. We got to be good friends.
In the mid-'70s, we were talking about what to do aboutPartagas cigars. I think he got disillusioned that he was never going to go back to Cuba.
C.A.: So he owned the brand. But he thought for the first 10 years that he's going to go back, Castro is going to be ousted, and he would have his factory back. And then he realizes that...?
Cullman: May never be. So, around 1974 I said, what do you think about selling the brand? That's not a bad idea, he said. So we discussed the selling of the brand, and I talked to his uncle, his brothers and his nephews in Spain. Then I had a talk with the people who worked at General Cigar. They said, you can't do that, we are going to do business with Castro tomorrow. We are going to recognize Cuba. And I said, it's not going to happen that fast. I made my bet that we could own the Partagas brand, make it a brand and nothing would happen in Cuba.
C.A.: At this point, were any of the other Cuban brands being sold in America under separate ownership?
Cullman: No. This was the first one as far as I know. I don't want to categorically say that, but I think we were the first. [Consolidated Cigar had had a relationship with the Montecristo brand before General Cigar bought the Partagas Brand.]
So we negotiated a deal and we bought them. We started making the Partagas brand. They took off unbelievably. We priced it a little bit higher than Macanudo and made it with a Cameroon wrapper.
C.A.: From the product standpoint, the distinction was in the wrapper, a little bit higher pricing, the package, which was the same as it is now and the same distribution system. Did you market it? Did you spend money advertising it?
Cullman: Yes. The packaging is the same as in Cuba. We mar-keted it. We spent money advertising it with Ramon Cifuentes in the ads. It started to grow so fast that we had to decide whether we could expand in Jamaica or whether it was wise to have another place to make these cigars. At that point, we had our shade operation in Connecticut and our tobacco-sorting operation in the Dominican Republic. So we spoke to the officials in the Dominican Republic's free zone and they welcomed us.
We started making Partagas cigars in the Dominican Republic in the late 1970's.
C.A.: You have had the Partagas brand for approximately 20 years and it continues to grow?
Cullman: Yes. It continues to grow. Macanudo No. 1, Partagas No. 2 in the United States.
C.A.: How big is Partagas today?
Cullman: It is reasonably large--about half of what Macanudo is.
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