An Interview with Christian Eiroa
Thirty-three-year-old Christian Eiroa is the heir apparent to the Camacho cigar brand. His family grows Cuban-seed tobacco in the Jamastran Valley of Honduras, where Eiroa was born, and makes 14 million Camacho, Baccarat and other cigars in a factory in Danlí called Tabacos Rancho Jamastran. Eiroa, a straight talker with a rebellious nature, leads the family's sales and marketing efforts in Miami as president of Caribe Imported Cigars Inc.
In June, senior editor David Savona met with Eiroa in Miami to discuss his reluctant entrance into the family business, his company's struggles to recover from production and inventory problems and his quest to bring Camacho Corojo back to the forefront of full-flavored smokes.
David Savona: Your father, Julio, is the patriarch of the company. When did you decide to get into the family business?
Christian Eiroa: I got my master's in '95. Then I was working for a friend of my father's in the finance business, and that company was sold. I never wanted to work for my father. June 28, 1995, I went there for what I thought was going to be six months.
Q: You went to Honduras?
A: Yeah, to be involved in production, the factory. I figured my father and I weren't going to get along very well. So what I ended up realizing was that something was happening in the business. One of the first arguments my father and I got into was trying to locate tobacco. He had the same two sources he always had, and we had our farms, but I then started looking.
Q: He was short on tobacco?
A: Everybody was. You couldn't get tobacco anywhere. So eventually we start finding tobacco, and then I realized that I liked it. Because there were things that he could do, and that I could do, and we didn't necessarily need to cross paths.
Q: Why didn't you want to work with your father?
A: Family businesses are always hard. It's never easy. And my brother tried to work with my father, and that didn't work out very well.
Q: What happened there?
A: Just father-son stuff. They couldn't get along. Too many arguments.
Q: Your brother is…
A: Justo. My older brother. He's currently in the bottled water business.
Q: So based upon his problems, you were leery about working with Dad.
A: Yeah, and I didn't know if I wanted to be in Danlí [Honduras]. I had been in Miami for six years. One of the biggest concerns that I had was making a name for myself in this business so I wasn't just the old man's son. Trying to get respect. So I began to focus heavily on purchasing tobacco. I traveled to places all over the world.
Q: Tell me which places.
A: Mexico. Indonesia. I almost ended up going to Bangladesh to buy tobacco. Italy. This couple shows up to my office and they bring this one little leaf wrapped in a piece of notebook paper. And they open up the leaf. It's black. It's beautiful. And I said, "Where did you get this?" They said, "Oh, Panama. Are you interested in this kind of tobacco?" I'm saying, "Oh, you know, tobacco from Panama…." Meantime, I call the secretary, say, "Book me on a flight to Panama with these people." So I show up in Panama, we contract out the tobacco, and I end up flying there about six months later with a cashier's check for a quarter million dollars. I started buying tobacco like crazy. Then of course, we ran into 1998, when we didn't need tobacco from anybody.
Q: Were you caught with big inventories?
A: Yeah, we were caught with some containers in transit. We were able to get out of those.
Q: Take me back to the beginning of Caribe.
A: '89 is when my father takes over the company called Fumas Tobacco and starts Caribe Imported Cigars.
Q: What brands did Caribe have in 1989?
A: I think it was just Baccarat and National Brand. Then we started one brand in Miami called Don Felo. It's a cafeteria cigar, a cheap cigar, it [sold for 20 cents then, today it] sells from a quarter to 33 cents. And that was about it. Then Sal [Fontana] comes back in [in 1992] and starts La Fontana. And the boom's happening. The aspect of the business changed. I remember my father saying that if he was making two or three million cigars a year, he was happy. Then all of a sudden we get our production up to 17, 18 million cigars in '97. I think in 1989 Caribe had $120,000 in sales. I think we capped out in '97, which was the best year, at $17 million.
The growth wasn't a very controlled growth, it was just growth. We weren't focusing too much on the little things. We tried to organize as best we could, but at that rate of growth you're thinking, I have to satisfy these customers or someone else is going to take care of them. Of course, with my inexperience, I never imagined it would come to an end.
Q: What was it like as a youngster growing up in Honduras?
A: I was born in Honduras. My mother's father, my grandfather, was the local landlord there in Danlí, a wealthy Arab guy. I was born when we moved to Jamastran, where the farm is. We eventually moved to Danlí. Diagonally across from my house is Estelo Padrón's place [who works for Villazon], and Plasencia lived there. So I grew up with [cigar makers], and to me this business was always second nature. My father was more in the leaf business then than cigars.
Q: How did your father get into tobacco farming?
A: He gets a job working at Perfecto Garcia [in Tampa, Florida, around 1963]. And that's when [Angel] Oliva said, "This embargo thing is really screwing things up. Do you want to go to Honduras and help process tobacco?" So my father goes down to Honduras, and I think the second or third year he split off from Oliva and starts doing it himself. His big partner then was Corral Wodiska [the company that owned] Bering. But [one of the principals, Jimmy] Corral kept trying to squeeze my father for prices, and he kept switching suppliers to government-owned farms. So my father bought farms from the government, and he starts taking bigger risks, and UST gets him to grow a lot of tobacco. And that's when things go real well. He had a joint venture, they had a great relationship for almost 10 years, until my father had the accident in 1977, and he had to semi-retire.
Q: Tell me about that. He was flying the plane himself when he crashed.
A: That road from Tegucigalpa to Danlí was a dirt road before. So it was a four-hour drive, but a 15-minute flight. So it made sense to fly. And you would fly more than you would drive at that time. Fuel was about five bucks a gallon. And just like you have a car, you don't check the oil. He had water in the fuel and he took off and the plane crashed. The engine shut off as it was taking off.
Q: So he was taking off from Tegucigalpa Airport?
A: It was an area where there weren't that many openings, a lot of trees. I was five. I remember listening to it on the radio.
Q: And what happened after the crash?
A: We moved to Tampa. He bought Perfecto Garcia in Tampa. We were there for a few years, and in '83, '84 we moved to Honduras again. In '87, I came back to the United States. I went to military school, Riverside Military Academy.
Q: Where is that?
A: Gainesville, Georgia.
Q: That's probably pretty tough.
A: Yeah, it was terrible. It was a good time, but I hated the place.
Q: Now what made you end up there? Were you a wild kid?
A: When you grow up in these Latin countries and you have some means, you become somewhat of an untouchable. So eventually one of my friends got in trouble, real bad trouble.
Q: When did you start selling cigars?
A: I moved to Miami in '98. It was a terrible year for us. We had the bank notes, the business was cut almost in half. We had a huge drop. But of course, when you have tobacco in the fields, when you have everything going, you can't just shut off a switch. On top of that we had union problems.
Q: In Honduras? The factory was unionized?
A: Yeah, it was terrible. The union gave us a hard time and they locked us out of our own factory in '98.
Q: What was keeping the company going?
A: Baccarat. Baccarat is huge. It's still our No. 1 seller. In 1998, the business didn't die. I hit the road. I think I was on the road 40 weeks.
Q: Is that the first time you started selling?
A: Yeah. I didn't know how to sell. Sal hated me -- a young kid, cocky, coming in. Sal wrote a letter of resignation and everything, but he didn't do it. [Sal Fontana and Eiroa are now an unlikely pair that bicker in comedic style. Eiroa refers to the 80-year-old Fontana as his consigliere.] It was a terrible year. I got ulcers and everything. I hated the road.
Q: How old were you at this point?
A: Twenty-six, twenty-seven. Didn't know a lick about selling. But I ended up getting the simple joys of sales -- even if it was a one-box order. Most of all, I started really understanding the business. Around July or August, my father surprised me with the corojo leaf they had been growing. I didn't know anything about that. He surprised me. It was good, it was nice and strong. And we had a group of retailers down, and they liked it.
Q: At that point you were growing Connecticut and other seeds in Honduras.
A: Yes, Connecticut, Mexican -- my father loves to experiment.
Q: OK, before you came out with Camacho Corojo in 2000, what was the state of the Camacho brand?
A: I think we bought Camacho from Simon Camacho's family in 1995. We launched it just to throw a brand out there. It had Connecticut wrappers, some had Indonesian wrappers. Then we came out with the corojo leaf.
Q: And how big did it get?
A: I think it hit two million cigars.
Q: Which primings do you use for Camacho Corojo?
A: It's third and fourth priming. Second priming goes for binder. And the corona priming, the fifth priming, goes for the Camacho Diploma. Next year, I think we're going to grow around 400 acres.
Q: Can you grow more?
A: We could, but we don't want to grow the factory and the farms anymore. Looking at Fuente, it's very admirable the way they've disciplined themselves to maintain their production at a certain level. Currently our production is 14 million sticks. We'll be happy if we can keep that many sticks and maintain the consistency of each brand.
Q: Take us through your company's brands.
A: We have Camacho Corojo. We have Camacho SLR and SLR Maduro, which is doing very well. We just extended the line. We have the Camacho Liberty, which will come out every so often. We have Baccarat and La Fontana. We have Don Felo. And another one I'm real proud of is National Brand, a bundle cigar we pulled out of the market during the boom. The retail price is about two, two and a half bucks. During the boom, people were coming in, buying them and rebanding them. So we pulled it from the market. And we came back with it in '97, '98, and last year we hit the million-cigar mark. We have a couple of smaller brands. So Camacho sets off, in my opinion, makes the whole full-bodied cigar thing explode. Camacho comes up against 17, 20 brands competing for the full-bodied cigar smoker. And maybe four, five of those brands stick. And unfortunately, as our competition gets heavy, our quality dips.
Q: What happened?
A: The demand was so high. When we grow and come up with a brand, we try to keep at least two years of tobacco. And we ate up all the gravy, we ate up all the good stuff. To keep production as the next crop came in, we used second primings, the light ones. It was too much production.
Q: Was that a mistake?
A: A huge mistake. We paid the price for it. So finally we said, Let's nip this in the bud, stop production. We froze it from November, December . January we started producing the new stuff, and didn't ship Corojo again until March, April. We established a limit. A cigar can't just be strength -- and that's something corojo delivers. Corojo is one of the only leaves that you can blend 100 percent of itself and it's going to taste good.
Q: So the Camacho Corojo blend is all corojo?
A: It's all corojo.
Q: Filler, binder, wrapper?
Q: Now was there ever a temptation to make the cigar stronger?
A: The Diploma. We did the Diploma that way. [It's stronger] because it's made with the corona leaf. Diplomas are what I smoke. I had them made for myself. So when guys came down to Honduras, I gifted these to them at [the Retail Tobacco Dealers of America trade show]. People showed up and said, "What is this, my diploma for going down to Honduras?" And that's where we got the name for the cigar. Diploma did very well. It's always limited-production. The corona leaves get the most punishment, breakage, the wind, the rain and the sun.
Q: You make your cigars in Honduras. What do you think of the typical consumer's reaction to cigars made in Honduras as opposed to those made in other countries?
A: I think people expect a full-bodied cigar out of Honduras. No bells, no whistles. A hard-core cigar. I think the image was probably damaged a lot in the '80s, when a lot of cheap cigars came out of Honduras.
Q: Last year, you came out with two brands not made at Tabacos Rancho Jamastran, not made in Honduras. What happened?
A: Jericho [made in Nicaragua] and Baccarat Dominican. I think my salespeople didn't trust the other factories. I think it could have been that my people weren't excited about the product. The blends were good. The launching was no problem -- it was the sell-through. And Baccarat Dominican didn't do anything. I'm not saying it was a mistake, it just didn't stick.
Q: Still, was last year a good year for you?
A: Last year was a very good year. The products are better, we're more organized, all the companies are more organized.
Q: Do people know how much you have going on in Honduras? The factory -- big factory -- a big farm, you grow your own tobacco. Do people know the whole story?
A: No. We have not been very successful in delivering that message. My father and I, we don't like to brag. We're not a big company.
Q: You're not small.
A: For this industry, no. In size, in premiums, we're probably number five or six. I think the growth has been in better quality products. There are better cigars out there. I think consumers want quality. They're willing to pay for quality. If you want stuff to mow your lawn with, there are people you go to for that. If you want something good, you're going to pay a price. You look to pay a price.
Photo by Gary John Norman