After more than two decades in the business, entrepreneur Eduardo Fernández has become a major player in Nicaragua’s cigar industry. His agricultural operation, Aganorsa, makes him one of the largest growers of premium cigar tobacco in all of Nicaragua.
While the country’s tobacco business is in the middle of an economic boom that’s showing no signs of slowing, Fernandéz controls a vast quantity of valuable acreage, but he isn’t just a leaf man. The Aganorsa Leaf factory in Estelí is responsible for some of Nicaragua’s hottest cigar brands.
Fernández came to Cigar Aficionado headquarters in New York City and sat down with managing editor Greg Mottola for an enlightening talk about growing tobacco, producing cigars and managing the many facets of vertical integration.
Cigar Aficionado: When did you enter the tobacco business?
Fernández: In 1998. I was looking at agricultural projects and I found that tobacco is a worldwide product. I met with Nestor Plasencia and he explained the business in Nicaragua. He even told me where to grow and what to do. It was at the end of the cigar boom. Tobacco gives you immediate worldwide exposure.
Q: Why Nicaragua?
A: I went there with an open mind, and was deciding between Costa Rica and Nicaragua. I was taken aback by the friendliness and the opportunities of Nicaragua. On top of that, when you don’t inherit land and have to buy it, it’s expensive. Nicaragua was still in a post-revolution era, so the land was more available in Nicaragua than it was in Costa Rica.
Q: Where in Nicaragua do you grow tobacco?
A: The three traditional areas: Jalapa, Condega and Estelí.
Q: How many acres of tobacco do you grow there?
A: About 1,200 acres. We expanded 20 percent last year in terms of land and we’ll probably continue to grow 10 to 20 percent this year.
Q: Across all three regions?
Q: Do you grow many different seed varietals?
A: We grow primarily two, traditional Criollo ’98 and Corojo ’99. This year, I have a new seed from Cuba called Corojo 2012. It’s very much within our range of flavors. We started growing it now for trial purposes. We’ll have a cigar in late 2020 with this tobacco.
Q: What do you mean by your range of flavors?
A: At Aganorsa, we have a profile that fits into our blends. It’s a refined, unique flavor that’s a touch soft.
Q: Can you describe the flavor?
A: I think in terms of strength and sweetness. I don’t get more sophisticated than that. I leave that to you writers [laughs].
Q: You said the new Corojo 2012 is from Cuba, but Cuba doesn’t sell its seeds. How did you get it?
A: I got it in the States. Can’t reveal any more than that. There are a lot of hybrids that come about. I’m not partial to those.
Q: You sell tobacco to a lot of the industry, don’t you?
A: Yes. About 80 percent of our tobacco is sold, because of how much we grow.
Q: How do you determine what to sell and what to keep?
A: We have our own profile and we know what we like. We look for specific flavor profiles in tobacco that can be repeated year in and year out. It has a lot to do with the origin of the tobacco.
Q: What about the highest grades of tobacco?
A: The tobacco we choose goes to a warehouse. From there comes the different brands. We don’t monopolize it just for ourselves. It becomes part of the blends that we formulate, so it all comes from the same basic stock.
Q: When did you open the TABSA factory?
A: In 2002 originally. Then I closed it down. We reopened it about five or six years ago. For a time, we made cigars in Raices Cubanas [Honduras] with our tobacco and our own blends.
Q: You recently renamed the TABSA factory Aganorsa Leaf. Why?
A: It was a decision made by Terence Reilly [vice president of sales and marketing] and Max [Fernández, Eduardo’s son and factory manager]. Our leaf best defines who we are and why our tobacco is different. We wanted it all to be under one name. We’re very proud and might be the only ones who gave a trademark to our leaf. It’s very unique. It smokes different and taste different. It’s from the soils of Nicaragua and basic Cuban seeds, but our process makes it unique to us.
Q: You have a factory in Miami. Doral. Has that been renamed Aganorsa Leaf as well?
A: Everything is officially named Aganorsa to carry the same message.
Q: How many cigars does the Aganorsa Leaf factory produce each year?
A: Over seven million a year.
Q: Would it be fair to say that the Illusione brand is what put you on the map? Sort of a star client?
A: Most definitely so. Dion [Giolito] has an excellent palate and is totally involved. He took us to a higher level. Every time he visits he really gets involved in the nuts and bolts of production.
Q: How much of your production consists of third-party, contract brands?
A: Half are third-party, half are ours.
Q: Do you like working with third parties?
A: Yes. There is nothing I like more than someone using my tobacco and finding his own expression. Anyone who has his own vision and does something interesting with it gives me great pleasure. I’m very proud of our leaf. A different expression is like art. They’re all artists in their own way. It doesn’t have to be done by me. It’s their expression with my leaf.
Q: Arsenio Ramos passed away last year. Was he a major contributor to the operation?
A: Absolutely. Arsenio taught me most of what I know about tobacco. He was a great teacher and super knowledgeable. Arsenio put his full effort and knowledge into our tobacco. He farmed and taught us about our leaf.
Q: Who’s the factory manager?
A: Max is our factory manager and basically does our blends.
Q: Now that the harvest is over, how many pounds of tobacco leaf did Aganorsa produce this year?
A: Let’s see, what’s 15,000 times 100? 1.5 million pounds.
Q: What percentage of that is wrapper?
A: Very little. About five percent. But we don’t sell any wrapper. We use that only for ourselves or for clients of the factory. If our third parties make the cigar in our factories, they can use it.
Q: With Estelí being the center of Nicaragua’s cigar industry, how has it changed in the last 10 years?
A: It’s grown with all the factories and with the fame of Nicaragua tobacco. Everybody wants Nicaraguan tobacco. Fields have grown especially in Estelí and Condega. More and more cigarmakers are coming and requesting Nicaraguan tobacco in their blends. We can’t keep it in stock. It’s scary.
Q: So you sell or use everything you grow?
A: Everything. We have a problem supplying customers, so we keep growing. I have certain very important customers we have to grow for.
Q: How much more expensive has the price of land in Nicaragua become?
A: In Estelí, it now costs about $30,000 a manzana, which would be close to $50,000 per acre. In the 90s, it cost about $800 per acre.
Q: That’s a huge difference in 20 years.
A: It’s an explosion. And every little piece of land is taken.
Q: You have a Nicaraguan maduro wrapper now. Let’s talk about that.
A: All our wrapper is Corojo ’99 tobacco, and it’s all shade-grown. It adds a special sweetness to the cigar. At first, our land wasn’t able to produce a good shade-grown maduro. It took 20 years to get the land up to the job. First, we used the right fertilizers, secondly we increased the PH level in Jalapa by using magnesium and calcium. On the industrial side, it’s just pure fermentation, taking the leaf to that color with the right burn and right sheen on the leaf. We’re very careful with the water and the humidity.
Q: Do you ever steam the wrappers to achieve maduro color?
A: No. We don’t cut corners. You lose a lot of the flavor by using steam.
Q: On which brands can we find this shade-grown Corojo ’99 maduro?
A: You’ll find it on the Aganorsa Leaf Signature Selection Maduro, the JFR Lunatic Loco series and the Guardian of the Farm Nightwatch.
Q: All the same priming wrapper on all the brands?
A: Yes. Higher primings. All shade grown. All our wrappers in Nicaragua are shade grown and all wrappers are grown in Jalapa.
Q: How many rollers do you have in the Aganorsa Leaf factory in Nicaragua?
A: There are 90 rollers who work in pairs. In Miami, it’s more Cuban style where every roller works alone, doing both bunching and wrapping. There, it’s four rollers.
Q: Are you growing in terms of U.S. distribution?
A: We recently started distributing cigars in California. We started our own distribution company there. It will allow us to participate more in that territory. Before, we were limited to working with only one or two distributors who had a license.
Q: How important is it to be vertically integrated?
A: In the end, it’s very important. The leaf is everything. It’s the end result. With the three growing regions and seeds, we can do unbelievable things.