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Q&A: An Interview With Jorge Padrón

The president of Padrón Cigars Inc. speaks about his Nicaraguan cigar brand.

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David Savona: How did you get your start in the family business?
Jorge Padrón: In our family, we were not forced to enter this business. It just sort of happens. I remember when I was young, in high school, I'd spend the whole summer working in the factory. I used to call that the tobacco tan. All my friends would go to the beach, and I was going to the factory in Miami.
Q: Would you also do this after school?
A: No, school was school, but in the summers I would spend most of the time working in the factory. Before I drove, my dad would wake me up at 6:30 in the morning to go to the office. Early in the morning he would come into my room, turn on the lights and start shaking my feet so I would get out of the bed.
Q: I'm sure you loved that.
A: Well, at first, you kind of resisted, but after a while you would just expect it.
Q: About what age did that start?
A: I must have been 13, 14. I came to Nicaragua in 1976 for the first time, when I was eight.
Q: Do you have memories of that trip?
A: Yes, that was in the old factory. We had the apartment right upstairs, right on top of the factory; we would go down the stairs and the factory was right there. I was running around the factory, in the pilones [editor's note: bulks of fermenting tobacco.]
Q: When did your family's company start making cigars here in Nicaragua?
A: 1970. Before that, we made cigars in Miami. In 1977, because
of the problems [with political unrest] in Nicaragua, my father opened up a factory in Honduras. For several years, both factories were operating side by side. In the '80s, during the civil war, I never came to Nicaragua, but I did go to Honduras on many occasions. Then in 1985, [President Ronald] Reagan placed the embargo on Nicaragua, and at that point we shifted all our production to Honduras. For five years there, all the production we had came out of Honduras.
Q: Was that difficult? It's a small factory, isn't it?
A: Yes, it was very difficult, but at the time we were taking advantage of every possible space in that factory. That factory was full. We had a lot of tobacco and raw material that we were able to salvage in years earlier, and that's what really helped us get along and get through. It wasn't until 1990 that we actually came back to Nicaragua for the first time and started the factory again.
Q: Wasn't your father living at the Honduran factory at that time?
A: He was living inside the factory. We both—when I was there—lived inside the factory. As we did for many years in Nicaragua.
Q: How were the accommodations?
A: Let's just say it was one room.
Q: One room for you and your father?
A: Those were good times. It was rough, but at the same time it was very practical. Don't forget, it wasn't very safe. There were a lot of kidnappings. We were in our little shell inside the factory.
Q: Kidnappings of local businessmen?
A: Yeah. There was a plot to kidnap my father in Honduras. They were found with plans of the factory, the layout, where his room was. Those times were very rough times, particularly in Nicaragua; and [in] Danlí, Honduras, being very close to the border, there was a lot of military activity.
Q: It must have been very challenging to run a business in that environment. How old were you?
A: 20 years old, 17, 18, 19. And at the time I was, more than anything, just accompanying my father, but in all of those trips you learned something. Even if it was not about tobacco, you learned something else. So I can tell you that, in all the years that I spent next to my dad, I think I learned more than I did all the years I spent in school.
Q: Tell us about your education.
A: I graduated from a Jesuit high school in Miami, and from there I went to Florida State University and got a bachelor's degree in marketing. After I graduated there in 1990, I worked in the family business for a year, in Miami, and then I went to the University of Miami and got my master's degree.
Q: When you got your MBA, what were you thinking in terms of a career path?
A: All my friends were interviewing for jobs with different companies, and I told them I was going into the cigar business and they thought I was crazy.
Q: When was that?
A: That was the tail end of '92. For me, all the family members had seen the hardships that my dad had gone through, so we felt an obligation. At that time, I always felt that what my father had created was something special, but that it could be taken to another level or taken advantage of in a way that we weren't doing at the time.
Q: Describe Padrón Cigars at that time. What products were you making, and where were you selling them?
A: The philosophy of the company has been the same since day one: to produce quality products, and to concentrate on the quality of our products, rather than the quantity that we produced. The only changes that we've made have been in the type of cigars that we make and in the areas that we sell. For many years, my father concentrated mostly on the Miami market, to the local Cuban communities in the area—and most of the consumers who smoked the cigars were Cubans—and some mail-order business that we had across the country, direct to individuals. We made the decision to expand our distribution and to go into the national market. Luckily, my father had enough confidence in me to allow me to try to get that done.
Q: That was your job?
A: Yes. At that time we had a lot of customers who were mainly older Cubans. When I kept seeing all these older people coming in, I said in 10 years, 20 years we're not going to have a market left. And that's when we went to our first trade show, in 1993.
Q: What type of reaction did you get to your product?
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