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August
2003

Tabacalera Perdomo:
Thinking
BIG


Amidst memories of brash upstarts - those whose rise and fiery fall became synonymous with the cigar boom itself - Tabacalera Perdomo has kept its impressive growth under focused control, continually generating excitement in the marketplace and raising its own standards along the way.

by E. Edward Hoyt III

More than a decade after reviving a lost family tradition in cigar making, one that extends back into the heart of pre-Castro Cuba, Tabacalera Perdomo president and founder Nick Perdomo Jr. knows that tradition is a crucial building block, but to succeed in premium cigars, one must continually focus on the future.

"You've got to be a little bit different, but not for the sake of being different," says Perdomo in explaining the notoriety and marketplace success that his company has enjoyed during its steady rise over the past 12 years.

Few manufactured products are as demanding or require as much advance planning as handmade cigars; and if you try to truly stand out from the competition, the demands are even greater.

"It's not easy to work and develop something new in this business," says Perdomo. "Anytime we have an idea and put it in motion, we have to forecast years down the road. We're coming up with different things right now for RTDA in 2005."

It's also no place for the meek of heart. "There's over 2,000 steps for us to make a cigar," says Perdomo. "It's a lot of work. But I think what sets us apart is we have a lot of attention to detail about the things we do. You've got to have a passion for it."

That philosophy has resulted in a family of premium cigar products that have developed a distinct Perdomo personality over time, but one that is always evolving. From ubiquitous rosado wrappers to extreme box press and large ring gauge formats and laser-engraved packaging, Perdomo has consistently served up brands and programs the break out of the "me-too" mold. Likewise, Perdomo has never thought much of companies that toss out tons of new brands hoping one will succeed. He's too busy trying to get it right the first time.

While many producers have seen demand for their more expensive cigars crumble in favor of less-expensive, value-priced brands in recent years, Perdomo is burning up the shelves in the more profitable, costly segments. Perdomo's sales are heavily centered in the $6 to $12 cigar price range; his best selling brand, in fact, is the Perdomo Reserve, which retails for about $8 per cigar. "That cigar continuously sells like wildfire," Perdomo says. "We have a tough time keeping those cigars stocked," something he attributes to the considerable support it receives from retailers and the fact that, all pretense aside, it's not a cigar he can just crank up production for. "It's really hard for us to get the wrapper where we need it to be with that particular cigar," Perdomo explains. The comment reveals one of the ironies of cigar making: the more scrutiny used in selecting leaves, and the greater the care and time given to tobaccos in fermenting them precisely the way you want the fewer cigars you can expect to make.

Production: Continually Evolving
Three years ago, the Perdomos built an expansive new factory and box-making operation from scratch in Esteli, the bustling center of cigar making in Nicaragua. Since then, the company has continued to expand and broaden the scope of its operations there, with increasing focus on "pre-industry" activities: tobacco fermentation in a dedicated new building that came on-line last year, and now leaf curing in huge, Cuban-style curing barns located just behind the factory.

Much larger in capacity than typical area barns, each building can accommodate 46,000 "hands" of tobacco - long poles (cojes) typically bearing 25 small bundles of leaves. Like Perdomo's factory itself - a solidly built structure that far exceeds local building standards - the curing barns incorporate an upgrade rarely seen in the area: a sheathing of vapor-proof plastic applied prior to siding the barn to allow for greater precision in humidity control during tobacco curing. It is here that freshly harvested leaves are brought in from the fields to begin the first stage of a multi-year process that readies the leaf for cigar rolling. Like many cigar makers in town, Perdomo works with tobacco growers and fermenters throughout the region, but seeks to bring more of these processes in-house, under his direct control. This enables more frequent and precise monitoring of conditions, handling, and progress of the curing and fermentation processes.

Inside the factory, workflows are designed not only for efficiency - there is plenty of space to ensure free movement of people and materials - but also for guaranteeing that finished products meet or exceed the family's high standards.

"Our quality control is extremely stringent," stresses Perdomo, who's tapped the expertise of his uncle, Tony Perdomo, to ensure that all manufacturing procedures are strictly adhered to. As the factory's production manager, Tony oversees a team of supervisors who monitor groups of rollers, who are themselves rotated among rollers to maintain objectivity out on the rolling floor. The factory itself is run by Nick's father, Nick Perdomo Sr.

At six o'clock each morning, the factory's field bosses arrive to inspect the previous day's production - cigars that have been bunched but not yet wrapped. "We work a day ahead," explains Nick. "All of the bunches we're making today are for tomorrow." Each bunch is draw tested, then hand checked, then opened and inspected to ensure that the blends are correct - four precise checks at this stage alone. Once rollers finish the cigars by applying the wrapper and cap, an employee makes a complete visual of each cigar. To ensure proper construction, cigar rollers are only allowed to make 250 cigars per day - a capacity often exceeded in higher volume factories throughout the industry.

Techniques and procedures are constantly being fine-tuned: Perdomo has developed square molds for its "box-pressed" cigars that create a softer press effect but produce a better-constructed cigar. Roller's cutting blocks have been upgraded with stainless steel plates that allow much cleaner cuts, even if chavettas must be sharpened more often. Bundles are now sleeved in heavy cardboard prior to storage, rather than traditional newspaper, since stacked bundles have a tendency to press cigars out of shape over time. Perdomo is even having all currently aging cigars rebundled to take advantage of this improvement. In all, they are just examples of dozens of adjustments that are regularly pressed into service to ensure more efficient workflows or better, more consistent finished product.

Long before the daily allotments of leaf are distributed to each roller, Gonzalo Puente, Perdomo's tobacco engineer, has spent months and years overseeing the leaf from seed to final aging. A Cuban native who worked for Habanos S.A. and Cubatabacco for 25 years before defecting to Nicaragua years ago, Gonzalo is also an agronomist who tests and monitors soil conditions on all of Perdomo's own and contract farms. He constantly travels from Esteli out to the farms in Jalapa and Condega to oversee all leaf activities.

Products with a Twist
Earlier this year, Perdomo sponsored small groups of retailers for a series of three-day visits to Esteli so they could see first-hand the company's entire cigar-making process, and understand the family's dedication to high quality standards. Back home, the company released a new line of cigars that are only being distributed to retailers who participated in the tours. The brand, called Cantero, is a puro rolled entirely from Nicaraguan tobaccos - a style gaining increasing prominence in Perdomo's product line. To further differentiate the line at retail, the brand's five sizes are merchandised loose in personalized, laser-engraved Spanish cedar trays. Retail prices range from $3.50 to $4.90 per cigar. Consumers can also purchase 25-count boxes.

Perdomo Fresco, a similarly innovative new line, was spawned by Tabacalera Perdomo's in-store rolling events, where customers could buy fresh-rolled cigars right from the rolling table. Sold in factory-style wheels of 50, each includes a "Fresco Card" bearing the name, image, and short biography of the cigar roller who created the cigars in Nicaragua, as well as a "rolled on" date the cigars were actually crafted. It's a new twist on an old tradition that faded in the 1930s. Fresco (which translates as "fresh") is available in three sizes, retailing for $3.75 to $4.75 per cigar.

Perdomo has also recreated an old Cuban brand exclusively for retail members of the Tobacconists of Association of American (TAA) - Casamontez. Originally made by Cuesta y Cia's Padre Varela factory in Habana, the brand was popular in the late 1930s and early 1940s. Perdomo's version is a medium-bodied blend with an African Cameroon wrapper, box pressed.

The factory has also been a producer of well-known and highly acclaimed private label brands over the years, and also works directly with retailers to develop exclusive "house brands."

Also this year, Perdomo has launched a periodic newsletter called Perdomo Press, which features information on the company, brands, employees, featured retailers, and special events.

Exclusive New Launches
For 2003, Perdomo has turned to African Cameroon wrappers for two new line extensions - La Tradicion Perdomo Reserve Cameroon and Perdomo Estate Seleccion Cameroon.

The new La Tradicion Perdomo Reserve line uses all double-aged, Cuban-seed tobaccos grown on Perdomo's own Esteli farm, and delivers "complex flavors with sweet, tangy spices and a long earthy finish," says Albert Argenti, Tabacalera Perdomo's chief marketing officer. The line is launching with a commanding array of nine shapes, presented in compact Spanish cedar 8-9-8 boxes optimizing shelf and humidor space for retailers. Retail prices range from $5.75 to $8.40 per cigar.

For the Perdomo Estate Seleccion Cameroon line, meanwhile, Perdomo has taken a more exclusive route, sourcing a particularly scarce OVS1S grade wrapper. "It's the best Cameroon wrapper you can buy," says Perdomo. "It's very expensive, but it's an unforgettable smoking experience."

Since April, Perdomo has been offering his Estate accounts - only 200 retailers nationwide - one box of a shape per month, with boxes laser-engraved "Limit one per person" in a pre-release program. The response, says Perdomo, has been phenomenal. The filler and binder crop grown in Esteli have been aged for five years, and the finished cigars has received 400 days of box aging, which for this line consists of humidified royal mahogany boxes lined in Spanish cedar. Six sizes are offered, and retail prices range from $8.00 to $12.00

Perdomo is also adding two new shapes to its popular large ring gauge, all-Nicaraguan tobacco Cuban Parejo line - a Belicoso No. 1 (4 1/2 x 60) and Belicoso No. 2 (5 1/2 x 60). This is a rich, medium- to full-bodied line blended from five different types of filler leaf grown in each of Nicaragua's tobacco farming regions - Jalapa, Condega, Ocatal, and Esteli.

Perdomo's Inmenso line, the massive ring gauge series that was launched long before the current large-ring trend, has been given two new "slimmer" but still plenty heft shapes - a 7 1/2 x 60 quadruple corona and torpedo. Inmenso is made with a blend of Nicaraguan and Honduran tobaccos, a Nicaraguan binder, and a choice of Ecuadorian rosado or maduro wrappers.

But Perdomo's most exciting launch of the year is a very special project that also bears the company's most costly price tag ever. A very limited edition line that's named after Nick's late grandfather, Silvio Perdomo, the Perdomo Edici-n de Silvio traces its roots to a secretive tobacco blend that Perdomo says is confidential family information. Silvio, the family patriarch who had worked as a production manager for several of the top factories in Cuba, cultivated the strains into binder and filler crop, and the tobaccos have been aging since before his passing in 1996. More recently, the tobaccos have spent time in Spanish cedar and vintage oak barrels. Three standard Cuban sizes are being offered: robusto (5 1/2 x 54), double corona (7 5/8 x 50), and a No. 2 Torpedo (6 1/8 x54). Production will be limited to about 25,000 cigars, or only 500 boxes. Slide-top Spanish cedar cachés will be surrounded by Spanish cedar shavings within a "Spanish Galleon" storage chest. Retail price will be $17.50 to $25.00 per cigar.

"It's very expensive," notes Perdomo, "but we've invested a tremendous amount of money in this tobacco. We've been aging these fillers now for seven years. My father says they remind him of how 'real Cuban cigars' were made before 1959."

Branching Out
Perdomo has been increasing the company's activity in a number of foreign markets, most recently inking a deal with North American Tobacco, Inc. of Concord, Ontario to distribute its brands in 10 Canadian provinces and two territories. Also within the last three years, Tabacalera Perdomo has signed distribution agreements with partners in Croatia, Malta, Germany, Austria, Switzerland, Israel, Denmark, Sweden, and Italy, and has formed a partnership with Singapore-based Perdomo Asia to market its products throughout the Pacific Rim.

Now, that's thinking big.


SMOKESHOP - August, 2003