Marvin R. Shanken interviews the man behind Hoyo de Monterrey and Punch.
Dan Blumenthal, the chairman of Villazon and Co.--manufacturer of Hoyo de Monterrey and Punch cigars in Honduras--has been in the cigar business most of his life. He started working in his father's retail cigar stores in 1939 in New York City when he was 14 years old. By the 1950s, he had his own cigar shop in Manhattan and had already begun to sell and distribute cigars that were made exclusively for him. He was a major purchaser of Cuban tobacco that went into Clear Havana cigars--cigars made in the United States with Cuban tobacco.
In the months before the Cuban embargo was imposed, Blumenthal and his business associate, Frank Llaneza, bought as much Cuban tobacco as they could find on the market. They continued to blend it into their brands until the mid-1970s. The two men also entered into a partnership to make cigars in Honduras, the first cigar makers to set up shop in that Central American country. In 1965, Blumenthal bought the rights to the Cuban trademarks Punch and Hoyo de Monterrey, manufacturing those cigars for the U.S. market. Today, Villazon produces nearly 26 million handmade cigars a year, plus another 45 to 55 million machine-made cigars manufactured in Tampa.
In a wide-ranging interview with Marvin R. Shanken, editor and publisher of Cigar Aficionado magazine, Blumenthal discussed his thoughts on the many changes he has seen, including his strategy when the Cuban trade embargo was imposed in 1962, and the current market for cigars.
Cigar Aficionado: I've been told you purchased as much Cuban tobacco as you could find in the months before the Cuban trade embargo was signed by President John F. Kennedy. Can you tell us the story?
Blumenthal: One of my hobbies is history. There had been this back and forth about the embargo between Eisenhower and Kennedy and Castro. And that's when talk about an embargo became widespread. I said to myself 'They're going to put on an embargo,' even though everyone else was pooh-poohing the idea. But I was even more sure after going to Cuba in 1960. I had an interview with the then minister of export. He told me in a fairly hostile way all that they were going to do to the United States. When I left Cuba, I went to Tampa to see Frank Llaneza, who was making the Francisco G. Bances cigar for me, and said I thought there was going to be an embargo. He went to Angel Oliva [a big tobacco grower], and he started buying tobacco for us.
At the time, we were already making a heavier style Cuban cigar--the Bances--that was selling well before the embargo. But when the embargo came, it was the only Cuban-style cigar on the market. People were buying it and saving their Cuban cigars. Of course, I also had three million Cuban cigars in my humidor that I bought from every refugee that came off the plane. I had a man down in Miami buying cigars.
C.A.: You were buying boxed cigars?
Blumenthal: Yes. Every brand. I started to sell them wholesale. I could hold three million cigars in my warehouse in those days, but it was a cash deal. In those days that was a lot of money. But once the embargo came along, Bances really took off too.
I also was very friendly with Fernando Palicio, who had been the owner of the Belinda and Hoyo de Monterrey factory in Havana. He came to see me about making a cigar that he could sell to his former customers here like Dunhill, Glazer Brothers, Faber. So we made a cigar called Flor de Palicio, which was all-Havana tobacco but machine-made. We sold it to Dunhill first.
C.A.: It was manufactured in Tampa?
Blumenthal: In Tampa.
C.A.: I take it you had bought many bales of tobacco?
Blumenthal: Yes, we had a lot of Cuban tobacco. We made Flor de Palicio for Dunhill, but it didn't go over very well. Then Palicio came to see me about making Belinda. Somebody had made him an offer for the Belinda label. But he came to me because I had done him some favors. I told him that I would buy the Belinda label, but I couldn't pay him on the spot. I'd pay him a royalty of so much per thousand. He agreed to that, so we started to make Belinda. We sold it to quite a few stores. It started to sell well, but it wasn't great.
The next thing that happened was that Palicio discovered he was dying. He was a lovely man, and he was worried about his wife and his children. Up to that point, he hadn't wanted to sell Hoyo de Monterrey because every day he had thought they were going back to Cuba tomorrow. But he called me, and I went down to see him in Hialeah where we made a deal on Hoyo and Punch. He got out of his bed to sign the deal. We started to make Hoyo De Monterrey and Punch in 1965. Hoyo de Monterrey took off right away.
C.A.: Did you make the cigars initially in Tampa?
Blumenthal: We had a handmade factory in Tampa, and we had cigar makers making the cigars in Tampa. But the rollers were pretty old. Since we had been working with Angel Oliva to supply our tobacco, and since Frank [Llaneza] happens to be one of the greatest experts about tobacco in the business, we started talking about other places. We thought about opening a factory in Honduras. At the time, there were no big factories in Honduras.
C.A.: What made you decide to go to Honduras?
Blumenthal: Our cigar makers were dying out.
C.A.: Weren't there were other options, however, like the Canary Islands and Jamaica?
Blumenthal: The Canary Islands were impossible. The cost of making cigars there was very expensive at that time. They were made by machine and Tabacalera controlled everything there. On top of that, it was too far away.
Blumenthal: Jamaica, we tried Jamaica. We had a small investment in a factory there, but we couldn't get anywhere.
C.A.: The Dominican Republic?
Blumenthal: The Dominican Republic was nothing at that time. It was really nothing.
C.A.: Did you decide later to try to put up a factory in the Dominican Republic?
Blumenthal: About 10 years ago, we were planning to put a factory up in the Dominican Republic. But we decided against it.
Blumenthal: That's a good question. Why didn't we do it? Frank decided he didn't want it.
C.A.: Going back to the '60s then, you didn't have a lot of other options?
Blumenthal: We were growing tobacco in Honduras and Nicaragua with the Olivas. That's the tobacco we were using, so logically we felt that that was the place to make the cigars. There was no sense transporting the tobacco from Honduras and Nicaragua to some other place, so, we started a factory there. But we still had to teach everybody to make cigars. We had some of our cigar makers and ex-Cuban cigar makers go down there to teach the people, and it worked.
C.A.: Did you spend a lot of time down in Honduras?
Blumenthal: No, no. I don't speak the language.
C.A.: Did Frank go down there a lot?
Blumenthal: Frank still goes down there. But at that time, Frank and I were not partners. In the 1960s, Danby-Palicio was a separate company. Villazon was a separate company. I had an option to buy 25 percent of Villazon and Co. So sometime around 1970 we decided to put the whole thing together. There were three of us: Frank's brother, Joe, myself and Frank. Each of us owned a third of the factory. We just combined the whole thing. For some reason, which I still don't know today, the combined business just opened up and boomed.
And even though in Honduras we had to teach everyone how to make cigars, it worked. It was funny at first, because we actually started the factory in Honduras. While we were teaching people, we didn't know what to do with the cigars. We put them in bundles. We were the first ones to put cigars in bundles. These were the cigars made by the students. They were our learner cigars, and we sold them very cheaply. They sold well.