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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Fuente: Oh yes, definitely.
C.A.: If it's not a Cameroon wrapper, then the next question is, will it be Connecticut or Dominican?
Fuente: Probably it's going to be Connecticut for now. We're going to come out with more Connecticut wrapper cigars.
C.A.: Or is there another area of possibility?
Fuente: There's another area. I believe that from all of the wrappers I've seen or dealt with, there's no finer wrapper than a Dominican wrapper. So there will be a possibility down the line that some cigars can include a regular Dominican wrapper. It also depends on what happens in Cameroon.
C.A.: When will you know?
Fuente: In the next crop, when it comes out.
C.A.: Which is when? Wintertime?
Fuente: By wintertime next year. If the volume is there, then there is nothing to worry about. But we are still going to come out with Connecticut wrapper cigars. We have been successful with certain sizes using Connecticut wrapper. So actually, we are just going to come out with other sizes. We had the idea of maybe putting foil on half of the cigar, so when the consumer buys it, they know that it's not the regular one. It's still a Fuente, but a little different taste. If the Cameroon ever comes back, we're going to continue with the Cameroon.
C.A.: It seems like you have a lot of irons in the fire here. What do you see happening in the next few years for your company? You are beginning a very bold, extraordinarily innovative introduction with Opus X, which has unlimited potential, or limited only by your ability to produce it. It is priced at a level that is very attractive. Do you see anything beyond Opus X? How is A. Fuente going to be different five years from today? Is it more of the same, or are there other things on the drawing board? What are the dreams?
Fuente: As far as I can see, I think we have hit the top of the line now. We've done about as much as we can be doing. The Opus X farm is beyond my dreams. I think this is really the top of what anybody can dream; it's beyond that.
C.A.: Aren't you accomplishing decades of work in a few years?
Fuente: I can say I owe it to my son. He has dedicated himself to this project. I have to give all the credit to my son. It's his baby, I've left it up to him, because I always taught my kids that they've got to do in life what they like to do if they want to be successful. I always told my son that if he would go to college, the day that he would come out of the college--both of my sons, I told them--that I would give them a part of the company. I'll never forget the day my son graduated from high school. The first thing he told me when he came out in cap and gown: "Dad, do you still feel the way you've always promised?" I told him, what? I didn't even know what he was talking about. "That if I go into college, I can go into the factory later?" And I told him yes. He said, "I'm going to college." And so he did. And after he came out of college, I kept my promise. He was just a teenager, so I used to send him down to the Dominican Republic and work the farms. I wanted him to have a real knowledge of the tobacco.
And I'm very proud of him, and I can say today that my son knows tobacco better than I do. When he came with this idea about the farm--at that time he didn't know it was going to be Opus X--it was a very expensive venture. I knew the possibility could be there, so naturally I told him: "This is your baby. See what you can come out with it." So, for this farm, he has the credit. I can't take the credit. I've got to give him what is due.
C.A.: Of the approximately 10 million cigars, what percentage goes to the United States, and how much goes to the rest of the world?
Fuente: The United States is our largest customer. I don't know what percentage. I would say 95 percent.
C.A.: About five percent of your exports are non-U.S. directed, to Europe and the rest of the world. Do you have a marketing strategy to make Fuente a world-class, global brand, or will it always be primarily an American brand?
Fuente: We would like to see the brand become global, but our first commitment is to the United States, because that's where our brand started. We would like to expand, but it depends on the production, it depends on the tobacco.
C.A.: Given that many brands are distributed worldwide, especially the Cuban ones, do you have an active plan to develop other markets? Has the demand in the United States market made the expansion less of a priority?
Fuente: We have calls from all over the world; we are in different parts of the world right now, but in small ways. We have calls from Spain and a lot of different places which want to give us contracts. But we tell them to go away, because our main concern right now is the United States. With our demand in the United States, there is no way we can meet it in other places. That's why we started the third factory--so that we can meet the demand, and eventually go worldwide.
C.A.: This is a question that I'm sure concerns most of the producers in Honduras and the Dominican Republic: When the embargo ends, what impact, if any, will this have on a) cigar consumption in America and b) how it would change, if at all, your position in the American market?
Fuente: I don't think that it's going to change anything with the consumer in the American market. I personally don't feel that Cuba will ever be what it was. I don't think anything will be ever the same as it used to be.
C.A.: But when the embargo ends--
Fuente: When the embargo goes, I think that sales would probably drop for our brands because everybody is going to be buying Cuban cigars. I think that people are going to smoke them to find out about them. I remember in the good days of Cuban cigars, the most that was ever imported was 25 million cigars. There were several factories in Ybor City, and one alone used to manufacture 80 million cigars using Cuban tobacco. What may happen is that producers in all these countries will probably buy Cuban tobacco and then make an even better-tasting cigar.
C.A.: And, of course, there's the point that Cuban production is so low--not even able to meet the demand outside of America--that there won't be that big a supply coming in. When people ask me, I tell them that not every cigar smoker wants the strength and power of a Cuban cigar. Americans have been smoking milder cigars. There's also the issue of price. Of course, as your Opus X gets up to $10 or $12, all of a sudden, you're in a new ballgame with prices approaching Cuban cigars. I happen to think when the market opens up, the number of consumers in America who smoke cigars will grow, and those companies that produce the very highest quality cigars, wherever they're from, are going to prosper. And those people who have never delivered high quality or a price value relationship, of which there are a number, they are going to have a tough time.
Fuente: I think that even people who have quit smoking will probably go back to buying a Cuban cigar again.
C.A.: Just for the memory?
Fuente: I think for the first six months, it's going to be a mess out there in the market. I think that a lot of people are going to try Cuban cigars. A lot of people are going to say that it's not their taste because they are not used to that taste anymore. But a lot of people are going to smoke Cubans.
C.A.: There are so many complicated issues, such as brand ownership, that even if the Cubans sell tobacco to you and others, could it be a long time before cigars with Cuban tobacco reach the market?
Fuente: It's a mystery what's going to happen. All I know is that now, today, our business is a different animal. With the consumer trade, it's been a fantastic experience.
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