Bryan Ott: Padron’s 50th Anniversary has been the talk of the cigar industry, can you tell us a little bit about how the company got started fifty years ago?
Jorge Padron: Basically my father started this company 50 years ago with one goal – to make the best cigar he possibly could. At that time many Cuban immigrants were coming to the United States and Miami had a huge influx of Cubans. One of the things that was missing for them was their homeland, but he didn’t want them to miss their cigars, and that was kind of the mentality. He saw a need, and he decided to go into it and make cigars that were comparable to Cuba. From day one it’s been a focus on quality and not quantity of cigars produced.
BO: When did you know that you would follow your father into the cigar industry and was it a difficult decision?
JP: I started working full time with my father in 1990, just around the time the embargo was lifted. At that time, the business was not what it is today. We did have the most important thing – a brand that people respected. And I understood that. The challenges were how to make that brand more recognized. How could we take it national? How could I build on what my dad has done? Or, how do I help him continue to build? How do I add value to the company? That was the thought process. My father had done a lot of work. This was right after I graduated college. I had my Bachelor’s from Florida State, and it was in between my Bachelor’s and my MBA, and that year I worked full time in the company. Then I pursued my MBA full time, came back, and started working full time again.
BO: What is it like working with family?
JP: Family businesses are challenging at times. It’s important to have a central figure who has the authority to make decisions. That person has to understand the responsibility that comes from making those decisions. We’ve been fortunate to have a person like my father who was very clear in his mission and his philosophy, and he never wavered from that. He put us in a position where he allowed us to reach out, to do things to try and help him build the business, which doesn’t always happen. When you have a central figure like the founder of the company and then all of the sudden you get a new generation of his kids coming in and they obviously have ideas, sometimes the founder doesn’t necessarily want to listen to these ideas because they’re not consistent with what he’s done... My dad wasn’t like that. My dad was somebody who listened, and he gave us the opportunity to give him our ideas and to prove to him that they would work, and taking slow steps, he would reach out and branch out and do some of these things, even if it’s on a limited basis, until he was convinced, he would let us go forward. That was very helpful for us. In our business now we have a lot of family members who work. I have my brother here, I have my sister Elizabeth, my brother Orlando, I have my nephews, my cousins, my mother... everybody is here every day, and they’re understanding what it takes to keep this thing going, and what it is that’s important to maintain the level of product and the level of quality that we’ve come to be known for.
BO: Your blends are the most highly rated in the world, what is it that sets Padron cigars apart from the rest?
JP: First of all, it’s taken 50 years. This is not a company that was an overnight success. This is something that’s taken a lot of years, a lot of sacrifice. We’ve never taken advantage of our position, and we’ve been respectful of our customers and the loyalty that they’ve given to us, and we’ve always been loyal to them. I think that when you’re conscious about your products and the quality, the consistency, the messaging... all of those things help lead into a company where people respect the brand, respect the products, they respect and trust us because they know we’re not going to take advantage of our position. We don’t lose focus. Our focus is the product, and the quality of the product. Everything else is second. Sometimes in business, people put other things ahead of the product, marketing, etc. We never want to lose sight of the product. That’s what’s allowed us to establish our loyal customer base – the product. The day that we make bad cigars, we won’t have loyal customers anymore. It’s as simple as that. We don’t take anything for granted here.
BO: Padron was one of the original pioneers of Nicaraguan tobacco, what brought you to the country?
JP: In some ways it was a little bit of luck, a lot of expertise. My father was exposed to tobacco, he had an opportunity to taste it. He was invited to Nicaragua by president Samosa to evaluate some operations and some tobacco that they were growing there, which was very difficult for him to sell. They weren’t quite sure that the quality of the tobacco up to par. Then my father had an opportunity to taste it and his first thought was that this was the second coming of Cuba. And that’s basically how it all started, in ’67. They had a lot of tobacco to sell but he couldn’t buy it because he didn’t have any money! So he brought the first shipment of Nicaraguan tobacco to the United States, a small shipment, but nevertheless he brought it, he started using it, and he also helped sell to other people in Miami that needed some tobacco. The main goal was to help Nicaragua. It’s been a great thing – he’s one of the pioneers of Nicaraguan tobacco, I think. He’s always cared very much about Nicaragua – the people. He’s very grateful for all the opportunities he’s been given there, and the people have always treated him with a lot of respect. The employees love him, they respect him, they see him as a father. For him, Nicaragua is home.
BO: You’re releasing two new cigars in commemoration of your 50th Anniversary, can you tell us about them?
JP: We have come out with two different cigars – one of them is part of our Family Reserve line, which is Family Reserve 50. It’s in line with the Family Reserve cigars- full-bodied, very balanced, it’s sold in boxes of 10 and it’s going to be a regular production item, very limited, but nevertheless we will continue to make that cigar. And then in addition to that we’re also doing a one time release of another cigar, 6.5"x52, which is going to be sold in humidors that are all numbered. We’re doing 1,000 humidors with 50 cigars each. Both the humidor and the cigars are numbered, so if you have humidor #1, you have cigars 1 – 50.
BO: Surely fifty years in the business didn’t come without challenges. What has your company had to overcome to get to where you are today?
JP: The first challenge is starting a business from scratch without any money. Obviously, that is the biggest issue right there – getting things started. It’s something that requires perseverance and commitment.
Of course, the civil war in Nicaragua caused instability in the 70s, and that created issues, which we were also able to overcome. We continued to manufacture cigars in Nicaragua even after the revolution. Then in 1985, President Reagan declared an economic embargo on Nicaragua, so we weren’t able to ship cigars from Nicaragua and we had to close the factory. By that time we had opened up another factory in Honduras, so we just shifted the production to Honduras and started importing directly from Honduras. The problem there is that we didn’t have the raw material to sustain a long time period. In 1985 when they instituted the embargo, my dad was selling close to 5 million cigars per year. Fast forward to 1990 when the embargo was lifted, and production was down to 1.5 million.
It was a major commitment on his part to focus again on the quality of his product. He didn’t want to look for alternative sources of tobacco because he felt that over the years he had built such a loyal customer base based on a particular product and a taste profile. He felt that if he would change that, it would hurt his business long term. Rather than looking for alternative sources of tobacco, he decided to stick it out and hope for the best, and that led to the decrease in production and the decrease in sales. That was a major sacrifice financially, but long term it proved to be a very wise decision because he was able to keep the customers that he had, and eventually we were able to go back to Nicaragua and build the business back up. When we went back to Nicaragua in 1990, it was basically like starting from scratch. We had to restart the factory, the land was a problem...but we overcame all those problems. It just took a lot of time to do it.
BO: A Padron wouldn’t be a Padron if it wasn’t box-pressed. What is your take on box-pressing? Does it change the flavor or overall experience?
JP: That was one of the considerations when we were developing 1964 Anniversary Series. My dad was of the strong belief that he wanted to make cigars similar to the one he smoked back in Cuba in the 40s and 50s. And in those days, a lot of the Cuban cigars were box-pressed. When we brought that to the market in 1994, there were no box-pressed cigars. We were the only ones doing it. Obviously that has changed over the years, and now there are a lot of brands that make box-pressed cigars.
But I tell people all the time, the secret to our cigars is not the shape – it’s what’s in the cigar. It’s the tobacco. You can make a cigar square, triangular... whatever you want. If it doesn’t have good tobacco inside, people aren’t going to buy it. Over the years, many people have come out with these box-pressed cigars and they think that they’re going to smoke better, but it really doesn’t affect the flavor of the cigar, it’s simply a matter of packaging. For us, it’s something that we did based on the traditional types of cigars that my dad smoked, and now it’s become representative of our cigars.
BO: All of your cigars are made in Natural and Maduro. How do you define the difference, and what can our customers expect from each?
JP: That’s a very subjective thing. Flavor is hard to describe for me. Some people it comes easy to, that they’re able to say it tastes like this or that. To me it tastes like tobacco, and it’s either good or it’s bad. Obviously some blends are going to be more full-bodied than others, the wrapper obviously affects this, based on whether it’s a sun grown tobacco, and the aging and all that. More than anything, it’s just a flavor difference. When people ask me what the difference is, believe it or not, that’s a hard question to answer. I can sit with my father and smoke, and he’ll ask me how it is, and I’ll say it’s good, great... and that’s it. It’s not like we’re saying it tastes like this or like that. Is it good, or is it not good? That’s basically what it boils down to. Is it full-bodied, is it not full-bodied, is it spicy or not... we do not want spicy cigars in our blends. We are looking for balance, and when people classify cigars as peppery, for us that’s a negative. We don’t want our cigars to be peppery. Some people may like that, but that’s not the Padron customer. We want well-fermented tobacco where the blend is balanced. It doesn’t do you any good to make a strong cigar that’s one-dimensional, and [in the industry] that happens a lot.
BO: Is there a blend or size you enjoy most or are most proud of?
JP: We don’t put out any cigars out that we don’t like to smoke. We don’t really introduce a whole lot of new cigars. We do new products when there’s a specific event, like anniversaries or those types of things. But we’re not a company that’s constantly trying to reinvent the wheel. So I’m very proud of all the products that we make. We make products at every price point, and all of them are quality products. If you want a $5 cigar, you can get a Padron for that price. If you can spend more, if you can spend $15, then you got one. $25, you got it. We’ve got the full range. And as a manufacturer, that’s what we strive for. We want to have consistency throughout the products we make. I don’t think we have any dogs in our line. Obviously there are some sizes that may sell better than others, but that’s not due to a lack of quality. It’s just the nature of the market.
BO: What’s on the horizon for Padron? Where do you hope to be in the next five to ten years?
JP: Our long term plan is to continue doing what we’re doing and to have patience. For us, success is not measured by the volume of cigars that we sell. We need to stay true to our philosophy, which is that of quality, and we can’t go crazy with things that happen in the marketplace. We need to focus on our own thing, and sometimes what’s happening in the market isn’t good for Padron. We’re not a company that needs to show growth every year. We’ve never had a down year in the last 25 or 30 years, but the growth has been slow and steady. That’s the goal. Reaching a certain level is difficult, and then maintaining that level is also difficult. But you don’t want to lose sight of who you are.
BO: Before we end, is there anything else you’d like to say to our customers?
JP: What I’d like to say is thank you. Thank you for always trusting in us, and for staying loyal to our brand. We don’t take that lightly. For me and for my family, that’s a huge responsibility, which we plan to always take seriously, to make sure that we do things the right way. My dad has worked very hard to build this company, and we need to make sure that we don’t lose sight of those principles that helped him get to where he is today.