Q&A: Juan Martínez, Executive President of Joya de Nicaragua
- December 6, 2017 |
- By Andrew Nagy
In 1968, Joya de Nicaragua, S.A. began rolling Nicaragua’s first premium cigars in a rural town called Estelí, sparking the establishment of the cigar industry in the small Central American country. The company prepares to celebrate its 50th anniversary as Nicaragua’s oldest cigar brand next year. For about a decade, Juan Martínez has worked in some capacity in the family business, starting fresh out of college in a support role to now overseeing key aspects of the business as the executive president, a position he’s held since 2013.
Martínez recently spoke with associate editor Andrew Nagy via email about Joya de Nicaragua’s history, its storied brands, as well as its future.
Nagy: How did you get into the industry?
Martínez: From a very young age our parents always taught us to aspire to do things that have a positive impact on people and on the world. And they always inspired us to do our things and follow our own paths. My sister became a doctor and my brother, a cinematographer. I decided to study economics, which later turned into business.
Q: And when did you officially begin working for Joya de Nicaragua?
A: After I graduated I started doing some consulting work and slowly started helping my father in the family business, Joya de Nicaragua. At first it was on small things in the administration, or financial or legal aspects of the business. But slowly, I started to get more and more involved, and started getting to know the people, our team, their families, our clients and customers, our partners and distributors. I started to smoke more and I started to understand more and more about tobacco and cigars and started falling in love with all the aspects of the business. This was around 2007-2008, and by 2011, I was almost all-in, head deep in the business. It went from doing a “support job” to a passion and almost a mission.
Q: Do you remember your first cigar?
A: Of course, I think your first cigar is one that you always remember. I was 15 and I took (stole) a Joya de Nicaragua Clasico No. 6 from my father’s humidor that I took to the backyard and lit with a box of cheap matches. I remember having a rough time trying to figure out how to smoke and how to enjoy it. I was trying to imitate my father but failed. It was very peppery and spicy. It was not the best cigar memory I have!
Q: Your father, Alejandro Martínez Cuenca, purchased Joya de Nicaragua back in 1994, correct?
A: My father began working with the factory in 1992, initially under a sort of lease-arrangement. The workers, who back then were also the owners, had come to him asking for support to find investors who would be willing to invest in or acquire the factory. But the search was not successful, so my father thought “Let’s try it out. Let’s risk it.”
He began working with them providing some access to capital and tobacco and building some relationships with customers. By 1994, he was able to obtain some financing and some investors to join him to acquire the property of the factory. Remember, my father is an economist. He was an academic who later went into and out of government, so he wasn’t a cigarmaker. We didn’t grow up under the shade of a tobacco plant like many of our friends in the industry. He was just a cigar smoker.
So for him it was a great challenge that could only be met with the support and full involvement of all those people that had the knowledge, the experience, the heritage. We are proud to say that almost all of them remained in the company after my father acquired it, and some of them even continue to lead our teams today.
Q: Was the factory still feeling the effects of the U.S. embargo on Nicaragua when your family took over?
A: Of course, but not only of the embargo, but most importantly the effects of the civil war that happened between 1983 and 1990; a conflict that occurred primarily in the northern part of Nicaragua, where the army was fighting the Contra revolutionaries who were based in Honduras. Jalapa and the other tobacco growing regions and the border with Honduras experienced the harshest part of the war.
This war cost the lives of almost 50,000 countrymen and women, affecting almost all Nicaraguan families. Between the embargo and the civil war, the country was devastated.
So after 1990, when peace finally came to Nicaragua and the embargo was lifted, a reconstruction process began; one that wasn’t easy. Imagine a war-torn country, with very limited resources, intervened by international financial organizations that morally and socially devastated. The Nicaraguan families were hurting and also the businesses were struggling to survive. That’s when the factory owners, a cooperative of 69 historical workers, knocked on my father’s door and asked for support. And so began the process that proved the world that Nicaraguans, but specially Estelianos, are resilient and committed people.
Q: 2018 marks the 50th anniversary of Joya de Nicaragua. What does the company plan to do to honor the occasion?
A: Next year represents a monumental achievement not only for Joya de Nicaragua, but for the whole Nicaraguan tobacco industry. Remember, if it wasn’t for those brave pioneers that decided to risk it and start rolling the first Nicaraguan cigars in a small galera near the central square of Estelí in '68, the cigar world wouldn’t be close to what it is today. That’s why 2018 will be a year in which we pay tribute and homage to all those people who have been part of this effort of making the best cigars in the world. We will be paying tribute not to one person, or one family, or one company, but to the collective that for five decades has been relentlessly and resiliently crafting cigars, and we will try to bring this tribute to as many places we can around the world, working hand in hand with our partners with events, merchandise and even a special cigar to commemorate this milestone and celebrate together with all of them.
Q: Joya de Nicaragua was once the official cigar of the White House and certainly has a storied reputation. Do you feel pressure to honor the name and create products that live up the expectations that follow Joya de Nicaragua?
A: We do. We feel it and we live it every day. Not as much for its history but for the present. Remember that our brand carries the name of our country, so in many places when you think about Nicaraguan cigars, the immediate association is Joya de Nicaragua. Therefore, we have a great responsibility with our country and with our people.
But most importantly, we have a great responsibility with our smokers, our partners around the world. In order to keep growing and expanding, we need to continue delivering great quality product at great price points. But this is not something unique to us; I believe all of us in this business, who are trusted with someone else’s money, have a big responsibility to deliver the quality and the value that they expect. And that’s especially true in our industry, where there is a notion of overpricing some cigars. And that’s especially important in our industry in which the inherent nature of our product forces us to be extremely careful with our quality. In the end, every single cigar is hand crafted, and we need to maintain the balance between craft and quality.
Q: What’s Joya de Nicaragua’s best-selling cigar?
A: It depends on the market. We’re currently selling in more than 50 countries around the world, and preferences change. I can tell you that Antaño is by far the best seller in the U.S. while Joya de Nicaragua Clasico is the best performing one in Europe and Latin America.
Q: How many Joya de Nicaragua cigars does the factory produce per year? What about contract cigars for other companies?
A: Our current production is 5.5 million premium cigars per year. Most of our production falls under the Joya de Nicaragua brand that includes Antaño, Joya, Cuatro Cinco, Rosalones and some others, but we have a few extraordinary partners and good friends that we have the privilege of making cigars for like Dunbarton Tobacco & Co. and Fratello, both in the U.S. We also make cigars for some European companies like Villiger and Bentley in Germany, and Robert Graham in the United Kingdom.
Q: Joya de Nicaragua is known for creating some strong cigars with its Nicaraguan tobacco. It seems, though, that you have been slowly rounding out the Joya de Nicaragua portfolio to hit a broader range of strengths. What was the impetus behind this decision?
A: As we evolve as a company, we continue to organize our portfolio of products better. Each product and each family of products needs to have a reason of being. We try not to make cigars for the sake of having another brand out there, because we already have many great brands in the humidors. We make cigars so that they satisfy a purpose for us and for cigar lovers. We try to have cigars for all types of consumers in terms of profile and in terms of price.
That’s why our brands are organized into families of brands. We have the traditional family—the Antaños, the Clásico, Cuatro Cinco—that basically is a group of fuller bodied, very Nicaraguan cigars, very traditional and classic in their look and message. And then we have the Joya family, whose objective is to bring to the consumer friendlier and more diverse alternatives, in terms of profile, flavor, strength and price. The Joya family includes Red, Black and Cabinetta and it has been designed for the contemporary and younger cigar smoker. More importantly, while the traditional family focuses specifically in the use of Nicaraguan tobacco, the Joya family allows us to experiment and allow us to experiment with blends using tobaccos from different origins.
The Joya family will continue to grow and by 2019, we will have five or six members of that family, each cigar accompanying the contemporary smoker in their journey of cigar enjoyment, from a mild smoke like Joya Cabinetta, to a medium one with Joya Red to a more sophisticated, complex and intense one with Joya Black and so on with the rest of the future members.
Q: This year, Joya de Nicaragua brought back an old favorite: Joya de Nicaragua Añtano Gran Reserva. It’s now a regular-production cigar, and the filler is includes some vintage tobaccos. Can you elaborate on the blend?
A: The original Antaño was introduced in 2001, and one of the first limited editions to have come from our factory was the Antaño Gran Reserva in 2005 to commemorate those successful initial years of the brand. In 2016, after focusing a lot in the new brands like the Joyas and Cuatro Cinco, we felt that we needed to give some love back to the jewel of our crown, while at the same time exploiting some of the old tobaccos that we have in stock and a brand that is grandfathered for FDA purposes.
Q: Also, Joya Black marked the first time Joya de Nicaragua used a San Andrés wrapper from Mexico. How did that blend come about?
A: The whole concept of the Joya family was developed in 2013, and since the very beginning, we had clarity on where we wanted to go and what type of cigars would make up this family. However, we decided to introduce them gradually so that we can actually accompany the contemporary cigar smoker throughout their cigar journey, because we expect everybody’s palate to evolve and change over time.
Joya Black was a little bit easier because we intended to build upon the experience of Joya Red in all aspects; that is, to have Red as a benchmark and then grow up in experience, in profile and in message. And that’s what we did. We also had the blend ready for a few years before launching it. However, we delayed it because we wanted to respect Drew Estate, our U.S. distributor who was coming to market with Norteño, a blend using the same wrapper as used in Black, which is Mexican San Andrés Negro (hence the name, Joya Black).
The San Andrés wrapper is one that we love at the factory but we hadn’t had the chance to work with it in our blends. Around 2012, our team visited the tobacco plantations in Mexico and immediately we said we need to work more with this tobacco. It’s a great complement to our Nicaraguan fillers, adding just the needed sweetness to complement the fullness of our criollo to make it a complex and truly interesting smoke. And that’s what we did.
Q: Is Joya de Nicaragua still expanding into other markets aside from the U.S.? If so, how is the brand performing in those markets? In particular, Europe.
A: For historical reasons, our brand has had a good international (meaning outside of the U.S.) presence for many decades now. In the 1980s, due to the embargo the brand couldn’t be sold in the U.S., so the company opened many markets where today it has a solid footing. Unlike most Nicaraguan cigarmakers for whom the U.S. represents 80 percent to 90 percent of their sales, for us the rest of the world is as or more important than the U.S. Five out of 10 cigars that we export go to the international market.
Today you can find Joya de Nicaragua in 53 countries around the world. Of course, the U.S. is the single biggest market for us, but we have a great market position in Spain, Holland, Germany, Switzerland and almost all of Europe.
Q: Drew Estate has been distributing Joya de Nicaragua cigars since 2008. How has this relationship helped expose the Joya de Nicaragua brands to Drew Estate smokers, and vice versa?
A: We started working together in late 2007 and formal distribution began in 2008. Since the very beginning we’ve been humbled and blessed to have been received with open arms not only by Drew Estate, but by Drew Estate smokers, too. We call ourselves two sides of the same coin: Drew Estate with a young, urban and very American style and Joya de Nicaragua with a very Nicaraguan, traditional and classic experience. We complement each other very nicely, and so do our cigars. We are grateful to be able to reach the number and quality of smokers that Drew Estate has opened its doors to through the events, promotions and sales initiatives. Many people think we are one same company—that’s how well we work together!
Q: When I visited the Joya de Nicaragua factory back in January, I saw that some technological innovations have been added to an otherwise traditional cigar rolling process. Can you elaborate on the different computer systems Joya de Nicaragua is using?
A: Our industry, although very traditional and artisanal, is being forced to adapt in dramatic ways. We have greater and more intense competition that forces us to continue being efficient while producing a superior quality product. On the other hand, regulations force us to have our house in order to be able to comply with many requirements, to register all information, like tobacco components and ingredients, and eventually to track and trace our products from field to retail, like they are currently discussing in Europe.
That means that in our future we can only survive by taking advantage of the tools that technology offers us, from a highly sophisticated material requirements planning system to manage our supply chain, our inventories and our production, to customer relation management system, to facial recognition employee clocks that work quicker and more securely than traditional clocks.
Now, all of this sounds great but it’s not easy, especially in a well-established, 50-year-old company where, due to the inherent nature of the product, change takes time, slowly and step by step. Some of the changes have been hard, some even we’ve had to revert, but most of them have been quite successful. It has been possible only thanks to our team who has been not only motivated but also excited to be part of the change and appropriate the new technologies in their daily work life.
Q: The FDA. How is Joya de Nicaragua handling the new regulations? What rule, in particular, has been the most difficult to follow to the letter of the law?
A: To this date we’ve been on time with the requirements. But the most difficult part of handling the regulation has been the lack of clarity and information available on how things are to be done. In other words, understanding what that letter of the law actually means. I’m honestly very disappointed in the U.S. because, to this date, we are still navigating in the dark in many aspects.
You see the Europeans with their Tobacco Products Directive, and they were clear from the beginning. They have a well-functioning system and they respond and clarify all our questions in less than 48 hours. We’ve had to spend zero Euros in European compliance because we’ve done it all ourselves with clear guidelines.
In the U.S., you have many legal and non-legal opinions, and no certainty—everybody is sort of doing their own thing. We are not afraid of the regulation as long as the rules are clear; when they are not, then we don’t know how to plan and navigate and how to work, and it leads to a lot of speculation and unnecessary energy and money wasting on our part. So the biggest challenge thus far is to plan for the next few years in terms of costs and how those can affect our business. One final point: We don’t oppose regulation. We are, however, against regulation that generates unnecessary economic burden on businesses that push us out of the market.
Q: Where do you see the industry in three to five years?
A: It’s hard to say. I think it will all depend on how the regulation evolves, but we all expect to continue growing at a more conservative pace and that the rhythm of new brands into the market will slow down. However, I don’t see the shape of our industry being altered dramatically beyond changes at company level, some being sold and others being closed down. I don’t see many new people coming into the industry.
I see Joya de Nicaragua evolving to 55 years and eventually to 100 years. Even when I don’t see our markets growing too much, as the possibility of enjoying cigars and promoting our brands is limited more and more every day, I don’t think cigar lovers will stop smoking cigars anytime soon. What we do doesn’t allow for much change before being considered something radically different.
Q: Do you see the Nicaraguan industry ever losing ground in the near future, or is the cigar industry there going to keep on growing?
A: It’s funny because last Monday we got the exact same question from the Head of Economic System in the Nicaraguan government, and it’s not an easy question to answer. Of course, where we are today is the result of many decades of hard work and what we have built as an industry has some solid bases: our brands, our buildings and organizations, our capacities, our tobacco plantations, our reputation. Importantly, our success as an industry has been the result of cigarmakers’ drive combined with great labor relationship, economic and political stability in Nicaragua and many other factors.
But, maintaining the momentum we currently have will depend first on our companies making better and better brands, being in the top every year and respecting the price/quality ratio that has been instrumental in getting us to where we are. We can’t lose sight of how we got here. Second, on our country providing the stability and favorable working conditions for our industry to continue thriving. Finally, and most importantly, it will depend on the international regulatory framework and on the success of our efforts to withstand and resist the intention to regulate our industry in the U.S., Europe, Asia and Latin America.
This article first appeared in the December 5, 2017 issue of Cigar Insider.