Once well on its way to flying high during the boom, La Luna Cigars was battered by unfortunate business deals during a volatile era in the industry. Humbly starting over, the brand and the company has bravely retrenched and finally rebounded, a testament to its founder, a dedicated staff, and a core following of consumers.
by Dale Scott
I like the little cigar companies. In 1970, I discovered the many buckeye cigar factories in Little Havana, Miami's Cuban district. At most, they were storefronts. Some were cottage affairs, with tabaqueros rolling puros in kitchens. Until the boom, I mail-ordered these straight-ahead, bargain priced cigars from a number of these family-owned businesses: perfectos, pyramids, gigantes, even culebras - back when culebras were unknown. On business trips to the East Coast I'd sneak away and prowl the shops, reveling in their gritty, heady ambience.
The boom swept away most of these little marques. They couldn't compete, and either sold out or just folded. Historical plaques should have been placed on these Little Havana storefronts, to memorialize a fading tradition.
But, little cigar companies still abound. Like delicate seedlings, they are vulnerable to being choked out by industry megaliths, who crowd them off retailers' shelves when they can. Nonetheless, the lore, the tradition, and the passion still seize the few, and they will sacrifice everything for the puro. Everything? Yes - consider Gael de Courtivron, founder La Luna Cigars.
"I went from being a millionaire to the point where we ate beans and rice almost daily," Gael admits, describing how his cigar company hit bottom in 1999. He chronicles the events preceding this slide.
"I come from a French wine family," he says, "and perhaps that's where I learned to develop my palate." In earlier years - he's a young-looking 51 now - Gael discovered and loved premium cigars - powerful, full-flavored ones. Living in Europe, he played drums for several internationally-known British rock bands. Leaving the music industry in 1982, he turned his hobby of collecting Coca Cola artwork and memorabilia into a successful business, selling over a million Coca Cola-licensed brand products and restored '50s Coke machines. His Sarasota, Florida-based studio, Gaelart, Inc., designed for prestigious accounts like Harley-Davidson, Budweiser, and Elvis Presley Enterprises.
On trips to Miami, he frequented many of the same little cigar factories I did. Over time, he befriended a third-generation Cuban tabaquero and master blender, learning enough from this informal, but in-depth, mentoring to begin selecting his own leaf, blending, and rolling. In the beginning, it was a lark. Friends elsewhere would ask him to send name-brand cigars from Miami. Gael would toss in a couple of his unbanded cigars in the package, to which his friends would respond with favorable curiosity.
After sharing some of his generic cigars with the owner of California's Geyser Peak Winery, the vintner asked for another box for a friend. The friend, George Hamilton, loved them. Word came back that the cigars were marketable if formally packaged. Gael's graphics and printing background facilitated this, and being a Cancer, he settled on the moon theme of "La Luna."
"Everyone likes the sound and mental picture of 'La Luna,'" Gael opines. He sent Hamilton samples of his self-created bands, box labels, etc., for approval. The answer was a startling, "Well, could you make us a few for starters - maybe 6,000 boxes a month?" Stunned by the challenges of this potential new business venture, Gael scurried off to Little Havana, rented a shop on Calle Ocho, and engaged the supervisorial services of his Cuban tabaquero friend.
The first purchase order arrived in early 1996 from Southern Wine & Spirits. Hamilton had formed Hubbard Imports, a California cigar distributor, in partnership with the father and son who owned Southern. Hamilton needed more than his own brand to survive, adding La Luna cigars and others to Hubbard's catalog.
|Gael de Courtivron, founder La Luna Cigars, and master roller Marta Perez.
A one-year, million-cigar relationship ensued, with Gael and master roller Marta Perez appearing nationwide with Hamilton. But, Gael's premonitions about his one-customer vulnerability proved correct. At the RTDA 1998 trade show, Southern abandoned the cigar business. Overnight, every one of La Luna's thousands of accounts evaporated, being wholly dependent upon Southern's sales efforts. Worse, while Gael was trying to negotiate with Southern to buy back his inventory, Southern dumped the entire remaining 18,000 boxes of cigars at distress-sale prices. Gael now had to compete with these La Luna blow-outs. Friends said to quit.
"I don't know where it came from," says Gael, "but something within me said 'no,' I really love the cigar business. Just like music, it feeds my creative side. Like music, I even decided to apply a principle of the music business - a fan club!" In 1999, Gael put his other businesses on hold and created a new company, Gaeluna International.
During the boom, Gael had employed approximately 70 rollers/bunchers, and he was struggling to find qualified rollers. One of his Honduran workers mentioned Marta Perez, a star soon to appear in the heavens near Gael's moon. A thirty-year veteran of the cigar industry, she started at age 11, in Danli, Honduras. Under the tutelage of Estelo Padron, she became one of Padron's top master rollers. When Padron moved his factory to Santa Rosa de Copan, Perez stayed with her family in Danli and worked for several years at Consolidated Cigar. Gael traced her to Texas, to where she had recently moved, contacted her, and she joined the company. She was so good, Gael made her a supervisor within two months. They traveled together to events, where they supported Hamilton, and a more serious relationship evolved. Gael credits her with saving La Luna.
"When Southern departed," he sighs, "I had to lay off every worker. Only Marta remained. Her encouragement and support made La Luna's resurrection possible." Gael had 3,000 boxes worth of cigars left over from 1996 production - lucky, because they were a different blend than the heavily discounted La Lunas. "We called them the La Luna Reserva '96, and in late '98 and '99, they paid the rent and phone bills - but no salary." Alone, Marta and Gael banded, sorted, cellophaned, boxed, and sold them, against tremendous market apathy for La Luna. "Ironically," laughs Gael, "people are now scrambling for the La Luna Reserva '96, because it's a 5-year aged, very fine cigar." They sold other cigars in limited runs: La Luna Full Moon Series, Cameroon, Java, and Maduro lines.
A New Business Plan
|In late 2000, Gael moved production to Latin Cigars of Honduras, owned by Carlos Torano
Gael knew, though, that he simply could no longer sell cigars with the quality he wanted at reasonable prices while making them in Miami. "Marta urged me to explore Honduras," he says.
While wrestling with his options one day, Conrado Plasencia - Nestor Plasencia's cousin - walked into the Calle Ocho factory. He had heard Gael was looking for wrapper, but by the discussion's conclusion, La Luna had a new manufacturer - Plasencia's factory in Danli, Honduras.
"Visiting Plasencia's facility, I saw potential like never before," he says, "not one, but maybe 30 Nicaraguan leaves to choose from. Fifteen maduros. Different primings, Panamanian and Costa Rican leaf. I was like a kid in a candy store! I blended and sampled for months, finally settling in on one I really liked - it became the La Luna Maduro Fuerte."
The first production came out of the factory in February 2000, and Plasencia continued to make the cigars for several months. The Maduro Fuerte scored immediate coups in the ratings: four straight marks of 4.0 or higher in Smoke magazine. In late 2000, Gael moved to a different Danli factory that he thought could better fill his need for limited, more meticulous production - Latin Cigars of Honduras, owned by Carlos Torano.
Fortunately for Gael, Torano enjoyed a 30-year, special relationship with Savino Portillo, the leaf merchant. Portillo is the sole source for the Cameroon wrapper Gael had determined was perfect for the second cigar of his Fuerte Trilogy, the just-released African Fuerte. This cigar, in the perfecto shape, just earned an enviable 4.4 in the Smoke ratings. La Luna was back, in force.
To gain marketing momentum, Gael appointed La Luna's first national sales manager, Jim Tisack, a graduate electrical engineer who previously handled sales and marketing for his family's business. Gael says Tisack's forte, negotiating and establishing new accounts, has proven invaluable to launching La Luna nationwide. The company has also signed seasoned representatives in half of the states, including the major markets. La Luna currently handles the Southeast direct from the factory, through retail cigar veteran Mike Banks.
Gael's idea of a fan club became the "Lunatics," a hard-core cadre of La Luna lovers, that has grown from a dozen members in 1999 to 300 presently. "It's far more effective to have regular, respected customers come in to tobacconists and say, 'Try this,' than for me to call them and send out samples," says Gael. He attributes a significant number of La Luna's exploding retailer base to proselytizing Lunatics. "Smokeshops are calling us," he says, "thanks to Lunatics. That's sweet!" At RTDA 2000, La Luna wrote 86 orders, over 10% of the 800 attendees. The team is pleased to have signed up some prestigious smokeshops: S.J. Peretti, Georgetown Tobacco, Edward's Pipe and Tobacco (the franchise headquarters), and Affiliated Cigar.
"No La Luna cigar retails for more than $5.00," reports Gael. "The ratings, the market acceptance, and the Internet buzz tell us we have an exceptional cigar at a great price. Just today, we saw rave postings on Alt Smokers Cigars, Cigar Weekly, and Internet Cigar Group boards. Our cigars are being promoted the best way of all: by word of mouth, putting cigars in people's mouths. We send extra African Fuertes to retailers to hand out to their best customers. We refer smokers to La Luna retailers on our Web site. We sell bundles of our Fuertes at lower cost than boxes, so retailers can refill the emptied chests - also saving shipping costs. I'm designing shelf talkers and other point-of-purchase material, and ads for Smoke magazine."
The final cigar in La Luna's full-bodied Fuerte Trilogy will be the Naturale Fuerte. As "Fuerte" implies, the cigars are powerful and flavor-rich. The chart shows sizes and blends.
"Our struggle is over," says Gael. "Now we're entering the excitement phase of business growth. We've demonstrated we have what it takes to build this business: tenacity, dedication, and sacrifice."
Now you see why I like the little cigar companies.
Gaeluna International, 1638 S.W. 8th Street, Miami, Fl. 33135, Tel: (305) 644-0444, Toll-free: (877) 952-5862, Web: www.lalunacigars.com
SMOKESHOP - April/May 2000