Sunday, February 01 2009
General Cigar announced that as of March 15,
Ernesto Perez-Carrillo will leave the company to begin a new cigar venture with his family.
"Stepping down from my position as president and cigar master of El Credito was not an easy decision to make," he said in a statement. "I have benefitted greatly from having had the opportunity to work with the largest premium sales force in the country, and have enjoyed dedicated marketing support that has ultimately generated international demand, as well as unwavering retail and consumer support for my brands."
General purchased the El Credito brands, inventory and factories in Miami and in the Dominican Republic in 1999 for an undisclosed sum, but one which provides Perez-Carrillo with the capital necessary to start a new venture. General will continue to maintain ownership and market El Credito's brands, which include El Credito, El Rico Habano, Flor de Lis, La Gloria Cubana, La Gloria Cubana Serie R, La Gloria Cubana Artesanos de Miami and Los Statos De Luxe.
Lennart Freeman, the president of General's parent company, Swedish Match, noted that "Ernesto has been a teacher, transferring his knowledge and sharing his insights with the artisans who will continue provide the products that premium cigar consumers so richly enjoy. We look forward to maintaining our relationship with Ernesto and wish him great success in his new venture."
General's response to Perez-Carrillo's departure will be interesting to watch. Although the company maintains an enormous factory in Santiago, Dominican Republic, that produces Cohiba, Macanudo, Partagas and many other brands, it does not produce any of the El Credito brands, which are made at the Villa Gonzalez facility that Perez-Carrillo opened when the popularity of his brands exploded in the mid-1990s. Will the El Credito factory close and its workers move to General Cigar Dominicana? And what of the El Credito factory in Miami on 8th Street in Little Havana, whose dozen or so rollers are now concentrating exclusively on the boutique La Gloria Cubana Artesanos de Miami brand, introduced last summer?
However, in addition to building an enormous following for his La Gloria Cubana brand, Perez-Carrillo has a considerable personal following and the El Credito brands are closely identified with him by many smokers. He'll be using that as the springboard for his new efforts, as he submitted two brand names for U.S. trademark registration recently: "Ernesto Perez-Carrillo" on December 2, 2008, and "EPC" on December 15, 2008.
>> When Zino Davidoff introduced his Dominican-made line in late 1990, there were four styles: the Classic, the Thousand Series, Grand Cru and Special. And for many years, that was it.
Not any more!. At its company-wide sales meeting held in the Dominican Republic in mid-January, Davidoff unveiled a brand new line to be called the Davidoff Puro d'Oro ("pure gold"), the company's first all-Dominican cigar. It will feature a special wrapper grown specially for this line and it will be fully introduced later this year.
It's the third addition to the Davidoff line since 1990. The popular Millennium Series debuted in 2001 and the Davidoff Maduro line was introduced last year. Now comes the Puro d'Oro, giving Davidoff lovers seven choices of blends wearing the familiar white label.
Also on tap is the 2009 Avo limited edition cigar, to be called the "Companeros," the ninth limited-edition blends offered annually since 2001. Edward Simon, the Avo brand manager for Davidoff U.S.A., noted that "I can't unveil too much yet. Just that it is going to be a Toro shape cigar, 6 inches by 50 [ ring gauge] with five different filler tobaccos [that] all underwent several special fermentations.
"It is going to be a stronger, very complex cigar, just in the tradition of past-year limited editions from Avo."
>> John Middleton, Inc.'s parent company, Altria, reported its full-year and fourth-quarter earnings on Thursday, and while its cigarette sales are down, sales of Middleton's cigars are up
Middleton shipped 1.3 billion cigars in calendar 2008, up 6.2% over 2007, when it was an independent company. Middleton's brands, primarily Black & Mild, benefitted from being distributed by the Altria sales force. In the fourth quarter of 2008, shipping volume was up 3.4% over the same period in 2007.
For the year, Middleton saw revenues (excluding excise taxes) of $326 million U.S., with operating income of $164 million (slightly more than 50% margin!), which included a charge of $18 million for integration costs. Wow!
To show just how remarkable that figure is, consider that for all of 2007, Swedish Match's total cigar sales – from all of its machine-made brands and premium lines from General Cigar – was only 27% more at $414.2 million (converted from Swedish kronor). And Swedish's profit from cigars in all of 2007 was barely more than half of Middleton's income in 2008 at $89.5 million!
As large as these number are, however, they pale against the Altria's cigarette sales. Altria announced that while domestic shipments were down 3.2% for the year, they still moved 169.4 billion cigarettes, 83.5% of which were Marlboros. That's 130.3 times as many cigarettes as cigars.
- Rich Perelman in Los Angeles
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Reprinted by permission. "Heard in the Humidor" is a publication of Perelman, Pioneer & Company. Copyright 2009; All rights reserved.
