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An Interview with Charlie Toraño

We sit down with the president of Toraño Cigars for a wide-ranging discussion.
David Savona
From the Print Edition:
Entourage, July/August 2009

(continued from page 1)

Q: Is there a country you're most proud of using?
A: I think there are tobaccos that we use today that have become more popular over the years. The first one is Brazilian tobacco. We were using Arapiraca when Brazil, for whatever reason, didn't have the reputation. I think another example is Colombian tobacco. We've stepped out of the box. We've done the same thing with Panama. I think there's definitely more of a trend over the last several years to blend more, but at the factory level we were at the forefront of that.

Q: There must be some tobaccos that just don't work in a cigar.
A: Sure, I remember one time that we tried a tobacco from India, and I said this isn't going to work. We also tried some wrapper quality tobacco from Wisconsin and Pennsylvania. It was reddish, it had a certain shine. We really tried hard, but we just couldn't use it.

Q: What's it like competing in this market today compared with the boom years?
A: The shelf space is very tight. I think, at least from our standpoint, you can never rest on your laurels. Any brand that takes for granted any position that they have in the market is going to lose that market share.

Q: What has changed since your sale of your cigar factories in January to the Scandinavian Tobacco Group, which now makes your cigars?
A: One of the nice things about this new phase in the Toraño history is our exclusive focus is on the Toraño brand now. My focus and my father's focus now is to spend more time with the consumer, with the retailers, promoting our brand and telling our story with the Roots Run Deep tour. We have events through November. For us to compete, there's no more effective way in our industry than putting your cigar in somebody's hand, telling them your story, and letting them smoke it. As tough as this year is, the Toraño brand is up.

Q: What precisely did you sell?
A: We had two cigar factories, one in Honduras, one in Nicaragua. These factories employed over 1,000 people, these are organizations we built over the last 12 years.

Q: And the capacity was around 15 million cigars?
A: Above 15 million.

Q: All handmade?
A: All handmade. 100 percent long filler, also. We made premium cigars for Carlos Toraño, C.A.O., Gurkha, Dunhill, La Perla Habana, bundles for J.C. Newman, etc. Scandinavian Tobacco Group, which is one of the largest machine-made companies in the world, two years ago really made their first entrance into the U.S. market vís-a-vís their acquisition of C.A.O. International. We had been making most of the premium cigars for C.A.O., so when they came into the picture, early on they expressed an interest in eventually controlling the production or having ownership in the cigar factories.

Q: Does S.T. Group own all its machine-made factories?
A: Absolutely—this is definitely a group that is used to owning the production side. From the Toraño standpoint, we thought selling would enhance the strength of the factory, because Scandinavian Tobacco Group has the resources to buy a tremendous amount of inventory of tobacco, and to compete with the biggest cigar factories in the world for limited resources of tobacco. That's only going to be positive for the Toraño brand. The Toraño family continues to own and control the Toraño brand.

Q: Some people thought you had sold the brand.
A: This isn't going to happen, but tomorrow morning I could open up my cigar factory, making Carlos Toraño brands next door. Because we own our brand, we control our production. What we sold was the private-label business, and the physical entities that manufacture the cigars. I'm still involved.

Q: You have a management contract.
A: That's right. I'm working with S.T. Our cigar factories, that were owned by the Fidel Olivas family and the Toraño family, I think we built a hell of a cigar factory. We were competing with the big guys, but you also need big-guy resources to compete in the world of tobacco. S.T. has a great philosophy; if it ain't broke we're not going to fix it, we're going to enhance. They're going to make that existing organization even better, but they're not going to change it.

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