Cigar Industry

Puffing Along

F.D. Grave & Son of New Haven, Connecticut, is behind the Muniemaker cigar brand.
| By Mark Vaughan | From Fidel Castro, Summer 94

Dorothy Grave Hoyt is something of an oddity in an industry geared principally to masculine tastes. Young, attractive and female, she is completely at ease in the world of fine tobacco and elegant cigars.

"People are usually pretty surprised when they findout what I do," admits the 32-year-old Hoyt. "But there was never any question in my mind. I've known since I was a little girl that I'd end up running the family business."

"I guess you could say that tobacco is in Dorothy's blood," adds her father, Frederick Grave III. "She's always been interested in cigars. She knows as much about running a cigar business as anybody."

The business is F. D. Grave & Son, Inc., Connecticut's lone surviving cigar maker. The company, an icon of the nineteenth-century American entrepreneurial spirit that helped forge a great nation, has been in the Grave family for four generations--surviving two world wars, the Great Depression, countless business cycles, changing trends and an anticigar onslaught that has been building for decades.

"It might seem odd that Dorothy's in the business because she's a woman," admits Frederick Grave, who with his brother Richard went to work at the company in 1950, the year they both graduated from Yale University. The brothers took control of the business in 1962, shortly before their father, Frederick Grave Jr., died in 1963. "But when Dick and I first started out, our friends thought we were crazy, too. They said, 'What kind of future is there in cigars? All your customers are old men.' Well, I figured there would always be old men around. The cigar industry by nature is kind of doom and gloom, but it's been good to us."

Indeed it has. Sales of F. D. Grave & Son's cigars have held steady at the 7 million mark for more than a decade. Though this is down from the company's mid-1960s peak of about 10 million, it is still a respectable number in today's antismoking market. Such success, claims Fred Grave, lies in dedication to quality and simple perseverance.

"We've managed to do well year in and year out," he says. "None of us have gotten superrich, but we're all pretty comfortable. Let's face it, I'd much rather have been in the cigar business over the past 10 years than in banking or real estate. And the other thing is that, unlike computers and VCRs, there is no bright guy in Japan dreaming up a better cigar."

On a breezy morning in early November, the Graves gather at the company's headquarters in New Haven. Constructed in 1901 by Frederick Grave Sr., the State Street building was said at the time to be one of the most "substantial, modern, and up-to-date cigar factories of this or any other country," according to a local-newspaper article published in 1905. Today, the graceful, four-story structure is a relic among its more youthful neighbors, its Victorian details and gold-lettered sign fading with age.

Inside, the rococo-paneled walls are covered with framed, original-edition, limestone-etched lithograph cigar labels and other memorabilia. A cigar-store Indian guards the inner-office desk that was once used by Frederick Grave Sr. himself, and is now under the command of great-granddaughter Hoyt. The 24,000 square-foot building is eerily quiet, and only a faint aroma of cured tobacco lingers in the air. Cigar production was shifted to a Pennsylvania subcontractor in 1986, explains Fred Grave, who, at 67, is still trim and energetic. Dressed casually in a worn sweater and open-neck shirt, he leans back in a simple, hardwood office chair and chews thoughtfully on one of his favorite cigars, an unlighted, six-inch Muniemaker Palma 100 Oscura.

Dick Grave, 65, dressed as casually as his brother, has just returned from an early-morning, bird-hunting foray in the Con-necticut coastal wetlands, a weekly autumn tradition. He admits to being a very light smoker, only one or two a week, compared with his brother's three or more a day.

"Fred is our walking tasting machine," says Dick, adding that he "got a couple of pheasants today." Then he launches into a discussion of last year's Connecticut broadleaf tobacco crop, from which F. D. Grave & Son will get its annual supply of wrapper and binder leaf.

For the Grave family, taste has always been the paramount factor in judging the quality of their cigars. During a three-hour conversation with them, the notion of taste comes up at least a dozen times. "We are known to have the blackest wrappers in the industry," says Hoyt. "But don't let that fool you. Our oscuras have an excellent, robust taste, sometimes referred to as a sweet-tasting smoke. They are not harsh whatsoever."

"We work on the premise that the big thing is taste," agrees Fred Graves. "It isn't so much looks; it isn't so much packaging. In the long run, it's the taste that counts." To illustrate his point, he finally lights the Palma 100. A wispy cloud of bluish smokes rises toward the high ceiling, casting a mild, pleasant fragrance throughout the room.

F. D. Grave & Son uses broadleaf, which is exposed to the elements during the growing cycle, rather than shade-grown tobacco, which is cultivated under tents and therefore protected. Variations in the wrappers' color, texture and general complexion are to be expected, explains Dick Grave. In fact, Dorothy Hoyt claims, these minor flaws are "what make our cigars beautiful. It's a question of character as opposed to some sort of subjective standard of perfection."

Does Hoyt smoke cigars? "Of course," she says with a laugh. "I'm not a frequent smoker, but I really enjoy our cigars. Sometimes I can even get my female friends to try them. I had my first one when I was 13."


The F. D. Grave & Son's cigar line once included 22 different cigars, many of which were dropped when the current Muniemaker flagship brand was introduced in 1916. Today the company markets 10 cigars, seven under the Muniemaker brand, including four oscuras, a dark and two lighter labels, ranging in size from 4 1/8 inches to 6 inches. One of their other three cigars, the 4 7/8 inch Cueto naturale cello, was introduced when F. D. Grave & Son acquired the brand along with the Lewis Osterweis & Sons cigar company in 1954. The two other brands, Bouquet Special and Judges Cave, are both long-running labels. Billed as "the millionaire's cigar at an average man's price," the 5 1/8 inch oscura Bouquet Special, which comes wrapped in cedar and packed in a glass tube, is the only cigar in the line with elaborate packaging.

The 4 1/8 inch Judges Cave, which dates to the company's 1884 founding, is the only original brand still in production. Frederick Grave Sr. took the name from a New Haven area landmark that is reputed to have served as refuge to two of the 59 judges who signed the death warrant for King Charles I in 1649 and were persecuted after the Restoration of the English monarchy in 1660. As the story goes, three of the fugitive judges escaped to the Colonies, and two eventually were forced to hide in a cave for several weeks while the search for them intensified.

One of the more distinguishing factors of F. D. Grave & Son's cigars is price, which ranges from about 60 cents for the Muniemaker Regular to about $1.50 for the Bouquet Special. According to Fred Grave, another important aspect of the company's continued success is the high value for price ratio they offer. "Our motto is: 'What this country has is a good 60-cent cigar,' " says Grave. And, he insists, "there is a demand out there for a good-tasting, moderately priced cigar. We have a lot of customers who can afford to smoke anything they want. But not everyone is comfortable spending five or more dollars on a cigar, especially if he is smoking four or five of them a day."

"Our cigars may not carry a hefty price tag," adds Hoyt. "But they are of the finest tobaccos and can match any cigar for flavor." Which brings the conversation back to taste. "The point is that people appreciate a good-tasting cigar. If that cigar costs $10, fine. But if you can deliver it at a moderate price, so much the better," she says.

In terms of price, F. D. Grave's biggest edge over its competition lies in the fact that all of its cigars are machine made, not hand rolled. From 1884 until the late 1930s, the company's cigars were made by hand; but with the introduction of rolling machines in 1938, the company began to phase out its hand-rolled lines. By 1956, when the last of its hand rollers had retired, the company had switched to its 100 percent machine-made brands. "It was a matter of efficiency and productivity," says Hoyt. "In 1905, there were 150 employees here producing about 100,000 cigars a week. In the 1960s, we were producing twice as many cigars with less than a third the number of people."

In 1986, the rolling machines at the State Street factory were switched off for the last time, and the two top floors of the building were rented out as artists' studio space. "We took a lot of blows in the '80s," explains Hoyt. "We had a hard time replacing workers who were retiring or leaving for more lucrative jobs in computer and high-tech industries, and the state was talking about implementing a 20 percent excise tax on cigar inventories, which it finally did in 1989."

"That tax really put an end to cigar making in Connecticut," adds Fred Grave. "New Haven used to be quite a cigar-producing city; there were a lot of cigar companies here. But all that's over now, and I doubt, even if the tax were repealed, that cigars will ever be made here again."

All of F. D. Grave's production is now subcontracted to the F. X. Smith Co., a long-established, family-owned cigar maker in McSherrystown, Pennsylvania. "We were kind of sad about it," says Fred Grave of the production move. "We had about 40 people working upstairs, some of whom had been here for over 50 years. But when F. X. Smith approached us, it seemed like the right thing to do. They could make good cigars, but they couldn't sell them. We could sell cigars, but how were we going to make them?"

So far, says Fred Grave, it's been a perfect relationship. "It has kept them in business and given us a supplier we could relate to, because we're both small, family-owned businesses. I'd say we make up about 80 percent of F. X. Smith's total production. And they make our cigars every bit as good as we made them ourselves."


For F. D. Grave & Son, there has always been only one tobacco suitable for binding and wrapping their cigars: Connecticut-grown broadleaf. In the old days under Frederick Grave Sr., relationships were established with growers along the Connecticut River Valley and with growers in the famed Pinar del Rio region of Cuba to en-sure adequate supplies of broadleaf wrapper and long filler tobacco. Cuban filler was used in the company's cigars until 1964, more than one year after the Cuban Embargo Act had taken effect. The company then switched to a blend of domestic and imported short filler tobacco.

In his day, Frederick Sr. was known as a local expert on tobacco growing and processing. He frequently traveled to Cuba to inspect tobacco crops and personally supervised the buying and sorting of his Connecticut supply each year. "Tobacco is the key to the whole operation," says Dick Grave, the company's current tobacco expert. "My grandfather thought so, and his dedication to getting the best available has been passed down through my father to us."

The company still takes pride in the fact that it gets its broadleaf supply directly from growers and not from the wholesale tobacco market. "We work with a variety of small, independent farmers," says Dick Grave. "And the curious thing is that we've never had anything in writing. We inspect the crop, and when it comes time to decide what we're going to pay, we go into the old farmhouse, have a cup of coffee and shake hands. That's it. No lawyer, no contract, nothing."

In recent years, according to Dick Grave, demand for Connecticut broadleaf has soared due to its increasing popularity with premium-cigar smokers. In the past, the entire broadleaf crop was consumed domestically, now more than half of each year's production is shipped overseas. At the same time, broadleaf production has steadily declined. In fact, the total acreage in Connecticut planted to wrapper leaf (both shade and broadleaf) has dropped from a midcentury peak of 20,000 acres to about 2,000 acres. "The price of broadleaf is being driven by demand from offshore," says a concerned Dick Grave, "and it's being driven out of this world."

According to Dick Grave, last year's broadleaf crop was a good one. Plentiful sunshine combined with other near perfect conditions combined to produce high-quality, robust leaves, the kind that make the best oscura wrappers. The crop will sell for about $3 a pound, a 50 percent increase over the $2 a pound that broadleaf brought in the late 1980s. But the real cost in wrapper tobacco lies in the special processing and handling it requires. By the time the Graves take possession of the leaf, it has been cut, cured in drying sheds and bundled. It is then shipped to a sorting shed, where it is graded into one of six different categories, packed in wooden crates, "sweated" for six weeks in a humidity-and-heat-controlled environment, then aged in a warehouse for up to two years.

"Cigar making is a very capital-intensive business because you've always got a two-year supply of tobacco on hand," says Fred Grave, adding: "Look at it this way, we have to buy and process a lot of leaf to make 7 million cigars every year."


As with many old, family-run companies, tradition plays as big a role as anything in formulating policy at F. D. Grave & Son. Take product packaging and presentation, for example. The company still packs its cigars in boxes of only 25 or 50 and refuses to use cellophane wrappers, except on a very limited portion of its production. "We have always felt that boxed cigars make the best presentation," explains Fred Grave. "And the reason we don't use cellophane is that my father wanted the cigars to touch each other in the box. He said that a 'marriage' of the tobaccos in the cigars took place, that being together made them taste better. Now it's a tradition with us."

Despite the importance they place on tradition, the family actually knows very little about the man who founded the company.What is known is that Frederick Grave Sr. was born in Osnabrück, Germany, in 1849 and immigrated to the United States with his parents in 1861, arriving in Baltimore in the early days of the Civil War. He was apprenticed to a Cincinnati cigar maker at age 14, and seven years later moved to New York to work as a cigar packer at the Defiance Cigar Factory. In 1873, at age 24, he accepted a foreman's position with the Osterweis cigar company (which his grandsons later bought) and, in 1884, left Osterweis to form his own company and began making and marketing cigars under the Judges Cave brand. By 1900, Frederick Grave Sr. had made enough money to build the State Street factory and a huge home on a parklike setting in Whitneyville.

"My grandfather made a lot of money in the cigar business," says Fred Grave, "mostly before World War I, when cigars were really big and there was no income tax. He had a flair for marketing. When he launched the Muniemaker brand, he had billboards put up with just the name on them, so that pretty soon everyone wanted to know what a Muniemaker was. Then a couple of months later he came out with the cigar, and I guess from the start it was a big hit."

Frederick Grave Jr. was born in New Haven in 1889 and joined the family business after he graduated from Yale in 1911. He served as a sergeant in the chemical-warfare service during the First World War, went back to making cigars when he came home and finally took over the business when his father died in 1924. Grave Jr. ran the business for 38 years until 1962.

According to Fred Grave, he and his brother got involved in their father's business more out of ambivalence than by design. "We'd graduated from Yale; it was summer, and we really didn't know what we were going to do with ourselves. I came down to the office one day and asked my father if he had a job for me and he said, 'sure, go out and sell cigars.' I've been selling them ever since."

Hoyt's interest in the company, on the other hand, started long before she graduated from Boston University in 1983 and went to work for her father and uncle. "When I was a school kid, I'd ask my father to bring home work from the office for me. My dream has always been to own the company and to buy back the family mansion," she says, referring to the Whitneyville estate, where her father and uncle were raised, but which her grandparents sold in the late 1950s because it was too big for them to maintain. There is now a fifth generation in training, Hoyt's six-month-old son, Charlie, who spends his days in a playroom that until recently was his grandfather's office.

"I used to have flow charts in there," jokes Fred Grave. "Now there are Barney posters."


In the early 1900s, F. D. Grave sold about half of its annual production of 5 million cigars in Connecticut and the other half via mail order throughout the United States. By midcentury, that market had shifted, and nearly all of the production was sold in the company's home state. "When Dick and I first came on board we were selling all our cigars out of the back of cars," recalls Fred Grave. "We had 16 salesmen, and every day they'd fill up the trunks of their cars and head out to service their accounts. Imagine selling 7 million cigars out of the back of a car."

But as times change, observes Fred Grave, so do markets. By the mid-1980s, the company's survival depended upon expanding its reach. "We found a niche for ourselves in the upscale cigar stores that began popping up in malls all across the country," says Grave. "They had the expensive brands, and they had the cheap brands, but there was really nothing in between."

Today the company's major markets include California, Ohio, Washington D.C. and the state of Washington as well as Connecticut. The last salesman retired in 1990, and now, apart from the few direct orders they receive in their New Haven headquarters, all F. D. Grave & Son cigars are sold through independent distributors. But personal contact remains an important element of the company's marketing strategy. "Dorothy, Dick and I still make courtesy calls on all of our accounts," says Fred Grave. "We try to visit every store that handles our cigars at least once every two years. And you know, they're always happy to see us."

Neither Fred nor Dick have any plans to retire. "Dad worked here until the day he died," says Dick Grave. Adds his brother, "This is sort of our home away from home, and as long as our health holds out, we'll probably hang in here. Anyway, the numbers don't mean much; there's no law that says you have to quit working when you turn 70."

What about the company's future? "Who knows? Dorothy is committed, and little Charlie seems to be literally growing up in the business," says Fred Grave. "There will always be cigar smokers, and there will always be a market niche for a good, moderately priced cigar."

"Anyway," he adds with a laugh, "they say nothing dies slower than a family cigar business. It just seems to puff along."

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