An Interview with Litto Gomez and Ines Lorenzo-Gomez
Owners, La Flor Dominicana
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Lorenzo-Gomez: Well, we do need to grow right now. But I feel that one of our goals for the future will be focusing on the international level. Although we are selling overseas, we are not selling the brand everywhere. We would like the consumer to be able to travel to anywhere and find La Flor Dominicana, whether it is London, in Tokyo, any major markets. We are trying to expand in those markets. As it is, I believe we are almost everywhere in the United States that we want to be [for now].
Gomez: We will continue growing until we reach the point where I would be at the verge of losing touch with the production in the factories. If there comes a moment when I have to start delegating and letting somebody else take care of the production of the factory, I will stop right there. So whether it is 3 million cigars or 4 million cigars, as long as I can handle it myself and oversee production at the factory myself, I will be comfortable with the growth.
CA: During the period that you started growing rapidly, the acquisition of good tobacco became very difficult. But that period has passed. How are you choosing your suppliers? What kinds of things are you doing to insure that you are getting the best tobacco available?
Gomez: When we started in 1994, many tobacco suppliers still had inventories of old tobacco. Two or three years' worth, because it came from a time in which there was not really a huge demand. Then the cigar boom brought too much pressure on the suppliers and they sold off that tobacco inventory. Everybody needed it. I have to say that the tobacco dealers in the Dominican Republic are people with a tremendous sense of values. They have respect for the customers and they have loyalty to them. I remember that there was a time when my tobacco supplier could have closed our factory if he would have sold our tobacco to someone else at a higher price. He could have done that, but he didn't. We always had our supply of tobacco even though there were a lot of very powerful companies offering more money. There we were, a very tiny, insignificant company on the market, and we always had this fine tobacco. You always have to be thankful to our supplier of tobacco, of wrapper and filler and binder. They were great people.
Now today, there is a lot of tobacco again. Everything has changed. We have more access to a lot of different tobaccos that we didn't have before. It started a couple of years ago. As the company gained name recognition within the industry, tobacco suppliers would come to see us and offer different tobaccos. Before, they wouldn't answer my phone calls. It was a joy to start experimenting with different types of tobaccos. It became a lot of fun. We are still having fun with that.
But right now in the Dominican Republic, there is too much tobacco. That is bringing us a different sort of problem. Sometime in 1997, some of the major companies, for whatever reason, decided to start contracting tobacco from the farmers at double the price of the year before. God knows what the intentions were. So, tobacco prices suddenly went way up. With tobacco up in price, a lot of farmers in the Dominican Republic wanted to grow tobacco. You had the farmers that had contracts with the buyers that were safe, but the vast majority of growers decided that even though they didn't have a contract, they were going to grow tobacco anyway. They figured that at those prices they were going to make a lot of money. So what happened is, the buying season starts and the crops start coming in and the people who didn't have contracts, they couldn't sell the tobacco and it's still there in their sheds.
A month ago, the government started putting a little bit of pressure on the big buyers that they need to buy this tobacco from the farmers. So now, people are starting to buy a little bit of that tobacco. But some agitators in the Villa Gonzales area are stirring up these farmers and they are threatening everybody that if the tobacco is not bought from those farmers, nobody is going to grow tobacco. And that is what is happening in the Dominican Republic right now.
CA: How much of your needs can you meet from your 120-acre farm?
Gomez: About a third. On top of all that, there was even a kind of an order issued from the minister of agriculture that he was not going to let any filler and binder be imported to the Dominican Republic until the existing tobacco has been bought from the farmers.
CA: Presumably, a lot of that tobacco is not very good tobacco.
Gomez: No, the tobacco is definitely not good. It has been sitting there for too long, it has been grown without economic support. That means there were no fertilizers and you don't have the necessary labor. It takes a lot of money to clean those plants over the three-month growing process. It takes a lot of labor. It takes a lot of fertilizers. It takes a lot of protection from pests. If you don't have the economic support, you're not going to get a good product. So most of that tobacco is not good.
It was really bad when there was no tobacco, but having a lot of tobacco right now is having negative consequences, too. And the buyers, even though they don't really want to buy that tobacco, are buying it. But they are carefully examining the tobacco coming in. There were farmers that produced 50 percent [premium-grade] tobacco; now they have 20 percent when they bring it in. The rest doesn't qualify.
CA: What kind of inventory do you have right now? I have heard that some of the larger companies have built up large inventories of tobacco.
Gomez: We have about two years' worth of tobacco right now. This is going to be the third crop that we are going to have at the farm and I still haven't touched even one leaf from that farm. It is just aging and being processed at the moment, so we have a lot of tobacco. We are very safe.
CA: How did you decide to do the farm?
Gomez: I wanted to start taking care of our tobacco from the moment that it is planted in the soil. Within two years, 50 percent of the blend in our cigars should be able to come from our tobacco. We want to be as vertical as possible. We are not selling this tobacco to anybody. This is for us, this is for me to make cigars. So, whatever you know and whatever you learn is going to be done a little bit better because we are going to make cigars with this; this is not going to be for sale. If we want to grow the kind of tobacco that we would really want at the factory, then we have to do it on our own farm, in the way that we like to produce it.
We have seen the results, and it is a very different tobacco because of the way we clean those plants and the way we eliminate the suckers that grow between the leaves and the stem. We go four times around all one million plants in the farm, cleaning; then at flowering, we take the flower off so all the leaves develop fully. We also put a little more space between plants so they get a little more wind and more sun to the leaves so that the leaves will develop more muscle. Can you ask your tobacco supplier to do that? No. Because they have little control over all the small farmers who supply them. Dominican tobacco is great tobacco. But I have seen the difference when you handle the tobacco yourself. I am totally crazy about our tobacco. It is fantastic.
CA: Are you growing wrapper or just binder and filler?