Unraveling the Truth

Alex_Svenson

I spend a lot of time poking around the internet, reading what people say about certain things and listening to comments about blends etc. A lot of times I get some great ideas for new products and projects but a lot of times I also read some stuff that kind of gets my blood pressure up, especially when I think people are being unfair. That said, I understand how many online cigar communities work and therefore try not to insert myself places I may not be welcome. The truth is that there is a great deal of bad/ false information floating around cycber space, and while I cant stop it or even control it by any means, I have decided that I would at least use our forum to bring some truth to things for those who are interested in learning. Hopefully this will become a regular thing.

I just read a post on another forum where someone posted some information about cigar factories making too many lines. the author was very critical of some of the cheaper lines associated with this factory despite the fact that the factory makes some amazing premium cigars (which the author also admitted).

For a brand owner who does not own a factory, it is very easy to get exactly what you want. You contract with any number of factories and work within a budget and make a premium blend. However, the factory has a very different set of circumstances. When they purchase tobacco from a farmer or when they grow it themselves, everything is done in proportions. For example, if you want to buy a pound of ligero, you have to buy 3 pounds of viso and 6 pounds of seco. If you want to buy 1 pound of grade A, you may have to buy 5 pounds of lower grade grade tobacco. This process or method allows for some price stabilization. Otherwise, everyone would want to buy just grade A ligero and no one would want any low grade seco and laws of supply and demand would sku pricing.

So, lets say someone goes to a factory to contract the production of a very premium cigar. The factory is going to have to also find use for all of the tobacco they get stuck with in order to make a cigar to their customers specifications. As you can imagine, materials management is a full time job. So if you look at most premium brands and factories, most make a full array of inexpensive cigars which you may not even realize. Some factories who make cheap cigars dont care if people know who makes what but others try to hide the inexpensive stuff they make to maintain a reputation for their premium lines. Take Fuente, they have Montesino but do some inexpensive bundles for certain clients. Davidoff (arguably the most premium brand) makes Private Stock and 3 x 3 as well as a multitude of inexpensive bundles which many consumers may not even realize. It is a reality of doing business at that level.

While all factories make inexpensive cigars, like I said, some do a better job of hiding this knowledge. I would encourage consumers to understand that this is a necessary cost of doing business and rather than penalize any factory for an inexpensive cigar, instead look to their premium production. The way a blender works with his premium tobacco is the true mark of his abilities. the cheap cigars he makes are more or less a means to an end. That said, some of these cheap cigars can be a great value and not something that should be overlooked when looking for good everyday smoke.

For example, why the Davidoff Millenium may be testament to the true blending talents of Hendrik Kelner, the private stock line is not a bad smoke at an everyday price. Even consider someone like AJ Fernandez. Truly the San Lotano Habano, Ruination or Diesel is a testament to his abilities. That said, the Cuban Legacy line he makes for Gurkha that sells at $2 a cigar is a tremendous value but it isnt necessarily a cigar I would use to evaluate AJ's blending abilities. There are lots of examples just like this. Pick any factory really.

Just food for thought.

Alex_Svenson

Ohhh just to reiterate, this was spawned from a post I read elsewhere, not on this forum. This was not at all in relation to the AJ post from earlier today which was a great post by the way and I really enjoyed reading. the post I read that got me thinking about this was someone going on about some B level cigars from a very reputable factory. Thought it was bush that the author did not give credit to the blender of the factory who makes some very remarkable products.

Krieg

Thanks for the info Alex, I always wondered how someone like Rocky Patel could have so many "private" blends for retailers, but this makes perfect sense. I love some of the cheaper, bargain cigars too...like the Ccom Red Labels, those are great smokes.

Russ55

I love posts like this. I always learn something new. Thanks for that.

Hayblet

I love Private Stock, great everyday smoke that is real nicely priced, same with The Griffens when you can find them on sale, I agree with all that you said and sometimes we may never know that to get the Ligero needed for CAIN F Olivia needs to buy X amount of Seco I think you called it so that goes into Oliveros Gigante's or whatever those huge sticks are called, so if anything Alex thanks for sharing what some of us may never know... well until now. AJ makes a ton of great blends and the Cuban Legacy is great with some age on it, not sure what else to say other than thanks for letting us know more about the biz.

Goldy

So would it be right to say there is no middle man sorter who can sell you **** pounds of ligero so you need to sort them out inhouse which is why they need the various lines to utalize their various assortment of leaf quality?

Alex_Svenson

Krieg:

Thanks for the info Alex, I always wondered how someone like Rocky Patel could have so many "private" blends for retailers, but this makes perfect sense. I love some of the cheaper, bargain cigars too...like the Ccom Red Labels, those are great smokes.

Krieg, Rocky is a great example. The man makes some great cigars but I always see people kind of dumping on him for having so many lines or doing so much private label work. Rocky is a major cigar maker and as such as to commit to tobacco much like a factory. Being able to make a wide array of lines and labels allows him to use all of the materials he has to and really turn out some top notch premium stuff at the same time. The Sun Grown has always been a real favorite of mine and a cigar I would say Rocky can hang his hat on in terms of showing off what he is capable of, but the bundles he puts out are a great value!! Ill say that it takes great tallent to make good, inexpensive cigars.

Alex_Svenson

Hayblet:

I love Private Stock, great everyday smoke that is real nicely priced, same with The Griffens when you can find them on sale, I agree with all that you said and sometimes we may never know that to get the Ligero needed for CAIN F Olivia needs to buy X amount of Seco I think you called it so that goes into Oliveros Gigante's or whatever those huge sticks are called, so if anything Alex thanks for sharing what some of us may never know... well until now. AJ makes a ton of great blends and the Cuban Legacy is great with some age on it, not sure what else to say other than thanks for letting us know more about the biz.

Wow, this is probably the best example and one I did not think of when writing the article. Oliva makes great premium cigars but they grow a lot of leaf and have to have uses for the lower grade or priming stuff and they do a tremedous business on their flor de oliva bundles.

bigharpoon

I never thought of it this way. It goes to show how talented these blenders really are, more or less being forced to cover the entire spectrum of leaves and produce cigars they can be proud of. Great info. Alex, thanks for the post(s).

Hayblet

I knew they had Oliva in the name just couldn't recall, love the Flor De Oliva lines, need to restock on those

kuzi16

i can see how the situation would cause many factories to roll the cheaper cigars.

its makes good business sense.
i dont even mind if they come out and say that they do so.
in fact, i would like it if they did explain this and market many of the "extra" blends as such. people would get a great deal and they would know what they are getting into. I dont like it when "2nd rate" or unused tobacco is passed off as new in blends that are sold at first rate prices.
granted, i dont see that happening too much, but im sure it does.

again, this is why i like ccom. i dont feel that they will sell blends that are trying to pull the wool over my eyes.

xIcedGuardianx

Thanks for the insight into the business aspects. Please keep this going cause it really helps boost appreciation for all that is involved. Thanks Alex!

stephen_hannibal

Hmmm do factories ever resell the lower grade tobaccos they have?
And in terms of branding, Davidoff only seems to attach their name to Davidoff and Zino. So would it be safe to say while under the same roof it is not in fact the same brand.
As a matter of fact the only time I see the other brands associated with Davidoff are from retailers.

kuzi16

stephen_hannibal:

Hmmm do factories ever resell the lower grade tobaccos they have?
And in terms of branding, Davidoff only seems to attach their name to Davidoff and Zino. So would it be safe to say while under the same roof it is not in fact the same brand.
As a matter of fact the only time I see the other brands associated with Davidoff are from retailers.

davidoff also attaches their name to a few other lines. Avo and Winston Churchill come to mind.

Alex_Svenson

Goldy:

So would it be right to say there is no middle man sorter who can sell you **** pounds of ligero so you need to sort them out inhouse which is why they need the various lines to utalize their various assortment of leaf quality?

Anything and everything is both possible and happens in the industry. There are some factories that really dont make super premium smokes but rather have a real nitch business in bargain and bundle products. Chances are you have not heard of such factories but they can make a fair amount of money by buying from different factories and purchasing lower priming or lower quality tobaccos at a cut rate price, especially if the original owner of the tobacco cant find a use for it. Conversely, one of these factories may buy a lot of tobacco that has some ligero, viso and seco and they only want the seco, they may sell off their ligero (which there is a huge market for) If there is a way to make money in the cigar/ tobacco industry, I promise you someone is doing it.

stephen_hannibal

kuzi16:

stephen_hannibal:

Hmmm do factories ever resell the lower grade tobaccos they have?
And in terms of branding, Davidoff only seems to attach their name to Davidoff and Zino. So would it be safe to say while under the same roof it is not in fact the same brand.
As a matter of fact the only time I see the other brands associated with Davidoff are from retailers.

davidoff also attaches their name to a few other lines. Avo and Winston Churchill come to mind.

Ahhhh forgot about those.

sightunseen

That's an aspect of the cigar industry I've not heard about before. Upon hearing it, it makes a lot of sense.

ShotgunJohn

Thanks Alex this provides clarity to the reasoning behind a wide variety of brands and product lines from different factories.
Good post.

Amos_Umwhat

Thanks for this post. It's always nice to have some idea of how things work. Also nice that talented people are involved in making cigars that are affordable for everyday smoking situations. I like to smoke on my way to and from work, but a Gurka Titan or Armada etc. would be a waste, Blue Label B-2 or Cuban Legacy etc. fill the bill just fine. Enjoyable, but I don't feel I've wasted something if I have to put it out, or can't take time to truly savor the depth of the experience. A time and place for everything.

On that line of thought, one thing I've appreciated about all the folks here is that we accept that people have different tastes. I never see comments ( or almost never ) like "You wuss, you smoke Connecticuts? Man up!" To each his own. Personnally, I like different strengths at different times. Keep up the great work Alex, it is appreciated.

SmokySuit

This is why I love this forum. That's some great info on the industry. It helps put things in perspective, I've always wondered why brands that have made a name for themselves bother making cheaper lines. Thank you Alex!

cabinetmaker

Never really knew that, but it's good informnation to keep in mind. I actually like the flor de olivas, and some of (most of) AJ's bargain stuff.

docbp87

stephen_hannibal:

kuzi16:

stephen_hannibal:

Hmmm do factories ever resell the lower grade tobaccos they have?
And in terms of branding, Davidoff only seems to attach their name to Davidoff and Zino. So would it be safe to say while under the same roof it is not in fact the same brand.
As a matter of fact the only time I see the other brands associated with Davidoff are from retailers.

davidoff also attaches their name to a few other lines. Avo and Winston Churchill come to mind.

Ahhhh forgot about those.

And The Griffins.

Thanks for the info Alex. This is exactly the kind of transparency that the cigar industry needs more of. It is one reason why I love the twitter cigar community, because people like Guillermo Leon and Jose Blanco are always online, and completely open with their customers (which results in amazing things like the 107 Lancero/Twitter cigar). Jon Drew is another guy that comes to mind, who is completely forthright about how his company works, and how his cigars come to be. I think being accessible to the consumer makes for a much better experience in the end.

xmacro

Alex Svenson:

Goldy:

So would it be right to say there is no middle man sorter who can sell you **** pounds of ligero so you need to sort them out inhouse which is why they need the various lines to utalize their various assortment of leaf quality?

Anything and everything is both possible and happens in the industry. There are some factories that really dont make super premium smokes but rather have a real nitch business in bargain and bundle products. Chances are you have not heard of such factories but they can make a fair amount of money by buying from different factories and purchasing lower priming or lower quality tobaccos at a cut rate price, especially if the original owner of the tobacco cant find a use for it. Conversely, one of these factories may buy a lot of tobacco that has some ligero, viso and seco and they only want the seco, they may sell off their ligero (which there is a huge market for) If there is a way to make money in the cigar/ tobacco industry, I promise you someone is doing it.

Wait . . . I'm a bit confused. You said before that the entire reason that a factory is forced to buy tobacco they don't want is to prevent a skewed market, that if a factory could buy just grade A ligero and not bargain tobacco, they'd do so and it would throw prices out.

Now you're saying there's a thriving market for lower grade tobacco, as well as factories that make comfortable margins with it.

So why, if there's a market for the tobacco that a factory doesn't want, are they being forced to buy it? If there's a market for the bargain tobacco, or leaves that some factories don't want, why are other factories being force to buy it on the premise that "if we didn't force you to buy it, the market would be thrown up"?

fla-gypsy

I openly admit that I am a bargain shopper and love some of the lesser known lines that come from these factories. Ultimately the only thing I care about in my cigar is that it taste good to me. Of course I love smoking the super premiums also but I cannot often afford these and I do most of my cigar smoking during the day while at work so I prefer to smoke a great tasting $2 stick rather than chancing having to waste a $12 stick because something comes up and I have to put it down. Thanks for the insight Alex.

Alex_Svenson

If you want to buy just ligero, you will pay a MAJOR premium. It can be done. If a factory were willing to just go this route, cigars would be $12+ at retail. That is why most will buy the way I described and move out their low grade in cheaper cigars. Sorry. I was trying to make it black and white in my first post for sake of ease. Hope this still makes sense.

YankeeMan

I like to try different cigars. I've found some "off brands" that were inexpensive, but turned out to be great smokes.

When you order by phone from ccom, pick their brains. Kelly and Andrew have made some great inexpensive suggestions for me. Andrew turned me on to the ccom Sungrown and it's a really good cigar and I just ordered another box today.

JCizzle

Great info, thanks for sharing.

gmill880

great insight ... thanks Alex

xmacro

Alex Svenson:

If you want to buy just ligero, you will pay a MAJOR premium. It can be done. If a factory were willing to just go this route, cigars would be $12+ at retail. That is why most will buy the way I described and move out their low grade in cheaper cigars. Sorry. I was trying to make it black and white in my first post for sake of ease. Hope this still makes sense.

Ah, I get it; they could sell it themselves to the bargain cigar factories, but since grade-A ligero is in demand, they hitch the bargain stuff with the premium stuff to make sure they can move it and cut the grade-A price to entice a bundle buy, rather than take a chance on a bargain shopper that may not come along, so it just shoves the potential problem of the bargain stuff from the seller to the buyer who either take a chance and try to resell it or just blend/market it themselves. That makes more sense - thanks!

Alex_Svenson

xmacro:

Alex Svenson:

If you want to buy just ligero, you will pay a MAJOR premium. It can be done. If a factory were willing to just go this route, cigars would be $12+ at retail. That is why most will buy the way I described and move out their low grade in cheaper cigars. Sorry. I was trying to make it black and white in my first post for sake of ease. Hope this still makes sense.

Ah, I get it; they could sell it themselves to the bargain cigar factories, but since grade-A ligero is in demand, they hitch the bargain stuff with the premium stuff to make sure they can move it and cut the grade-A price to entice a bundle buy, rather than take a chance on a bargain shopper that may not come along, so it just shoves the potential problem of the bargain stuff from the seller to the buyer who either take a chance and try to resell it or just blend/market it themselves. That makes more sense - thanks!

Yes. There is even another side to it which is the personal relationship side. Some buyers nay get more favorable pricing or better proportions etc from a broker for any number of reasons including being family, paying on time, reputation, years in business etc. Lots of hand shakes.

Jdorais

This makes some much sense, and has given me another great insight to our hobby and it's behind the scenes practices. Plus it make total business sense. I can make a fortune if I can figure out what to do with the "left overs" in my business.