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An Interview With Jose Orlando Padrón, Chairman, Padrón Cigars Inc.

The patriarch and founder of Padrón Cigars Inc. has been making cigars since 1964.

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European editor James Suckling sat down with Jose Orlando and his son Jorge, the company president (who also answered questions), in their factory in Estelí, Nicaragua, and spoke about the past, present and future of their cigars. The interview was conducted in Spanish and then translated.
James Suckling: Why has Padrón Cigars been so successful?
Padrón: We have the smoker's trust. We've had clients for 40 years. When you are congratulated by those who smoke your cigars then you know that you are doing things right.
Q: I remember your 40th anniversary party in Miami last December, and you mentioned the hammer you had in your office. Can you tell me about this?
A: When I arrived in Miami, I was receiving $60 at the refuge. I felt like a beggar. I had been through a great deal in Spain and I told myself I have to find a way to make a living. There was this woman in Miami that told me "I will give you a hand," and I said, "help me buy a lawnmower so that I can cut grass." We bought a lawnmower that cost $59. At the end of the next week, I repaid her. In time, I put together all the equipment for garden work. In the mornings—5 a.m.—I would go to work until noon. The sun was so strong I would stop, and go back to work again at 6 p.m. I started saving a bit of money. At the time, a friend of mine from Cuba who was distributing food at the refuge gave me a hammer because he knew I was doing the odd carpentry job. I was a gardener during the day and a carpenter at night. That little hammer is a keepsake. It's something to show my sons and everybody else. To make them aware of the sacrifices I had to make in order to get to this point.
Q: So you worked two jobs to put together enough money to start your cigar factory?
A: Yes, I managed to put together $600, and I rented a space. It was very small. I still have the first electricity bill for $52. I was a big smoker in Cuba. I loved cigars. This is something you carry in your blood. I was born in the middle of all that, and that is why I love it so much. When I arrived in Miami the only tobacco here was the so-called Philippine kind. It cost six or seven cents. You cannot imagine what I went through to smoke a good cigar.
Then I said I am going to build a cigar factory in Miami, because Cubans here would miss Cuba, but not Cuban cigars, if I made a good smoke. I accomplished this and the reason is I had my clients behind me.
Q: What do you think of the cigar market in the United States now?
A: The market can be maintained, but we have to be careful with this new boom. It could go down. Everybody seems to have started producing more cigars, but that's something Padrón hasn't done, and that's why we are still around due to the previous experience we had. We didn't do that during the last boom in the mid-1990s.
Q: So you think there is now a mini-boom?
A: There is a mini-boom now, and the time will come when the market will be saturated with inexpensive cigars.
Q: Like it's happened before?
A: Yes, like before.
Q: How is this mini-boom possible when it is so difficult for smokers nowadays? They have no place to smoke.
A: It could be a mini-boom due to manufacturers increasing production and storing stock. Nobody knows how much is stored away. There could be 50 or 100 million cigars that haven't been sold. This is not Padrón's situation because we produce and sell them immediately. In our case we never have cigars in stock. We produce our cigars and the smoker immediately enjoys our cigars. We are always in touch with the market. This is very important. If a smoker complains about a cigar we say: send it to us to check out what happened, if it was the roller or whatever happened.
Q: So some big companies cannot respond to the market properly?
A: Look what happened before to the factories with big stocks. What happened after the boom [last time] was that there were over 10 million cigars in Nicaragua, at 10 cents a cigar. It's not convenient to mention who bought them.
Q: Your cigars are always difficult to find in the market, especially the Aniversary. Why?
A: The answer is simple; we produce 15 or 20 percent of our production for the Anniversary. We have had problems with production sometimes. For example, last month we took a 15-day vacation and there was a negative impact on production levels. However, our system is to prioritize quality over quantity. Our biggest production was in 1981, when we sold 6 million cigars. I don't think we will ever produce more than this figure. If we get to 6 million, that's where we stop.
Q: Why can't you produce more?
A: Because it's very difficult. You would need more rollers, more tobacco, and [you get] more problems.
Q: So a lot of the problem is the infrastructure?
A: Exactly, and we have no need for that. What we have to do is maintain what we now have. We have to make sure that the smoker is satisfied.
Q: Isn't the trend nowadays for tobacco companies to launch new products and new brands all the time?
A: Exactly, and saturate the store shelves. We buy raw material for what we are doing, for four, five or six years. What other factories do is they launch new brands every year. Just think of one factory that has 20 brands. How many sizes will it have for each brand? I will say it's a lie to anybody that tells me that they can make more than three blends in one factory. Not even a fortune-teller could invent so many different brands. The client pays for this.
Q: But why is it so difficult to make lots of different brands in one factory?
A: The problem is that you have to have enough raw materials to maintain the blend. That's the most important thing.
Q: This is the problem now in Cuba, right? There are factories making 10, 15 brands? There are also brands that are manufactured in several factories. Isn't that very difficult?
A: Each factory should produce a maximum of four brands each. To have a factory produce more than four brands would turn it into a factoría, a place that produces dresses, shirts, clothes. The difference between a factory and a factoría is that a factory has to guarantee the raw material to maintain a stable blend. A clothes factoría needs to promote its merchandise and keep up to date with fashion trends. They are totally different, one from the other. Just imagine, a factory that makes 1 million cigars will need, for each brand, a minimum of 450 quintales [22.8 short tons] of tobacco.
Q: Is that for a year?
A: Forget about the time, we're saying for the production of 1 million cigars. Imagine, just multiply 30 million cigars by 450 to know how many quintales must be in stock!
Q: Is that why Padrón never makes more than one brand?
A: Exactly. It's very important to be serious and professional in this business. Seriousness means that when a client smokes a cigar it should always smoke the same, taste the same, and have the same qualities. When a factory produces many different brands, it will have to be changing the blends all the time. Sometimes factories will have perfect blends but other times not.
Q: But don't you think that in 20 years Padrón's blends and flavors have changed?
A: Yes, they have changed. Of course. Initially I changed them because of Nicaragua. But listen: cigar production must be taken seriously, that is what I was taught and what I want my sons to learn. When a client talks to you it should be to congratulate you, not to say "This cigar is awful." What we have to maintain is the smoker's trust, that Padrón will never fail them.
Q: You did that during the problem with the Sandinistas in Nicaragua. No?
A: Yes, during the war there was an American embargo on Nicaragua from 1985 to 1990, and I had to reduce our production from 5 million to 2 million cigars because I was more interested in maintaining my blend, and my smokers' trust, than in making money. At the time of the war, there was no raw material available. We were in bad shape.
Q: You also made cigars in Honduras at the time?
A: Yes, Honduras. [Padrón still owns and operates the small cigar factory in Danlí, Honduras.] There was no tobacco here in Nicaragua after the war. There was not even electricity!
Q: Incredible. I know you don't wish to add brands, but don't you have plans to produce more products like the Anniversary?
A: Yes, of course, because we have to give the clients new products. But not all the time.
Q: How do you distribute your cigars in the United States?
A: We distribute directly to shops. We do not have a sales force.
Q: Do some clients have priority over others?
A: No, there are no priorities. All of our clients are equally important.
Q: What do you think of your cigar prices? Anniversarys are pricey, don't you think?
A: This cigar is for smokers who can afford to pay for it, but our regular line, I think, is the cheapest in the market. It's been years since our last price increase.
Jorge Padrón: I would like to mention the number of times people have asked us why our traditional line, which we sell for $2 to $6 per cigar, is so cheap. When we started selling cigars to shops during the Dallas trade show in 1993, a lot of people didn't buy our cigars because of the price. They thought that if they were that cheap it was because they were not good. Nowadays, we have maintained the price and the smoker understands that he or she is buying for the taste not the price. You get smokers who want to pay $4 for the best cigar in this price range and that is Padrón 3000. There are other smokers that can afford to pay more and buy the Anniversary. The important thing is that we have cigars for all segments of the market.
Q: When you began making cigars, you wanted to produce a substitute to the Cuban cigar, however, your cigars are completely different from Cuban cigars.
A: What we have done is something never done before. Cuban cigars have something we don't have here: a different climate, sun and soil. This does not mean that all Cuban farms are good, just as it is here. There are several farms we have not used for two or three years because they have not been fertilized properly and tobacco doesn't grow with the quality that is required. The same happens in Cuba. I'm sure they must have eliminated many farms throughout the years due to problems with tobacco quality. You have to look after the soil. You have to feed the soil. If you don't feed the soil then you get weak, famished plants. You saw with your [own] eyes last year's tobacco harvest, the size of the leaf, the quality. That is the most important thing.
Q: Then, have you created a replacement for Cuban cigars?
A: No, I haven't. Cuba will always be Cuba. What we are trying to do is equal, not surpass, Cuba. We will never be able to outdo Cuban cigars.
Q: What do you think of tobacco in Nicaragua nowadays? Do you think quality is the same as before the Sandinistas?
A: Many farms have lost quality—first during the war, later because of blue mold. The blue mold was Nicaragua's tragedy. I ran a test here in 1989. Ridomil [a fungicide used against blue mold] came to Nicaragua at that time. I saw that blue mold spread to part of the tobacco one morning, so I started spreading the Ridomil all around. I processed this tobacco quickly and started smoking it. After this, I was smoking a pipe for six months because it burnt my mouth completely! I told my harvesters that I would not buy any tobacco from them if they used Ridomil. There are other products that can be used and are not that aggressive. I know I am on top of this because I have to look after my smokers, but I don't know if everybody else does the same.
Q: So you do see a big change in Nicaraguan tobacco?
A: It has changed a great deal. There are many farms that are still good but many others have lost their quality.
Q: Why are Nicaraguan cigars so much in fashion now?
A: My opinion is because of what Padrón has done.
Q: Couldn't it be because there is a trend to produce stronger cigars and Nicaragua has strong tobacco?
A: Do you want to know when a cigar is the strongest? Just leave it raw, and it will be very strong. Don't process it; just leave it, and you will be throwing up soon enough.
Q: So strong is not the best cigar then?
A: I would say the best is to smoke a nice cigar. Sometimes I get people asking for strong ones, and I think that if the blend is right, it's not necessary that it be too strong.
Jorge Padrón: I say it's best if it is balanced.
Q: But now you see a lot of cigars that are mainly the strong kind.
A: Anybody can make a strong cigar. The important thing is to achieve the correct balance, a balance between strength and flavor. That is the difficult thing. Not everybody can achieve this. We had that idea in mind when we launched the 1926 line.
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