All in the FamilyTop to Top: J.C.Newman - July/August 2007 |
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An interview with Bobby Newman, executive vice president of J.C. Newman |
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TOB: J.C. Newman has a venerable history in the cigar business. Can you tell us a little about how the company got started? Bobby Newman: J.C. Newman was stated by our grandfather in 1895. He came to America from Hungary in the 1880s along with millions of other immigrants. He had three brothers and two sisters and they settled in Cleveland, Ohio, where his mother made every son learn a trade. One became a tailor, one became an insurance expert, and so on. My grandfather, J.C. Newman was told, “You will become a cigar maker.” His mother paid $3 a week for him be an apprentice cigar maker in 1892. Three years later he became a union cigar roller and went to work in a cigar factory. Later, when the union went on strike and he lost his job, he started rolling cigars in the basement of his home. He borrowed $50, which was a lot of money back then, bought tobacco, and put together a rolling table. Back then everyone would go to the store every day since there was no refrigeration. So his mother told the owner of the grocery where she shopped that her son was going into the cigar business and she would like him to buy his cigars. The man bought 50 cigars and then another 50. Soon he was buying 10 boxes or 500 cigars and my grandfather was on his way. That was the beginning of J.C. Newman. We are now in our 112th year, and we are the oldest family-owned cigar company in America. TOB: How involved were the previous generations of Newman’s over the years? Newman: My grandfather and father stayed in the business their whole lives. My grandfather wrote a book called Smoke Dreams when he was 82 years old. He died in 1958; he smoked 15 cigars a day, which shows you cigars are relaxing. His son was Stanford, my dad, who died last year at 90 in his office. It was awful, but he was sharp and coming to work every day right up until that day. I worked side by side with him for 32 years. Today, I’m executive vice president and my brother, Eric, is president. TOB: What is it like being part of a family-owned business? Newman: It’s great. My brother is my best friend and vice versa. With our father we bought out the other family members with a leveraged buyout in 1986. Interestingly, at the time of the buyout the cigar industry was faltering so we felt they got the mine and we got the shaft, but six years later the cigar boom hit. Today, unlike a large corporation, we can make decisions very quickly. We can have a meeting in the hallway in passing. We don’t have layers of bureaucracy. TOB: How did you decide who would be president? Newman: My bother was two and a half years older so after we bought out the other family members we decided he should be president. TOB: What changes did you make after the LBO? Newman: It was a very difficult time. We got together with a small manufacturer named Carlos Fuente who was closing his Tampa factory and focusing on manufacturing cigars in the Dominican Republic. He started making a brand for us called La Unica, which became the No. 1 selling bundled Dominican handmade cigar in market within six months. We converted our Cuesta-Rey brand to handmade in 1988. Then for our 100th anniversary in 1995 my father wanted to come out with the best cigar made. We developed the 54-ring Diamond Crown cigar, a super premium at prices ranging from $9 to $19 per cigar. We brought that out with a double fermented wrapper that gives the cigar a smooth, rich flavor. TOB: What other events have been important milestones for the company? Newman: We launched our export business, based in London and run by John Bodycombe, in 1995. We export to 81 countries around the globe. Some of our best markets are Germany, Holland, the Middle East, Russia, and Asia. TOB: How did your web site and the Cigar Family Foundation come about? Newman: In 1995 my nephew came to his father and me and said we need a web site. We said, “That’s a great idea. What’s a web site?” We started the Cigar Family web site. We don’t sell cigars from it; it’s just away to give information to passionate cigar smokers. In 2001, my brother was in the Dominican Republic and observed the situation—a lot of children there grow up in extreme poverty. At school, first graders to sixth graders all crowded into one room, weren’t getting nutritious meals, and had to carry water home every day. We formed and funded a 501c3 charity. One of the ways we raised money was by with a book my wrote a called Cigar Family, which we sold at Barnes & Noble and Borders with all the profits going to the Cigar Family Charitable Foundation. The foundation has spent $4.5 million building a school for kids from kindergarten to 12th grade, as well as a baseball diamond and organic farm growing corn and soybeans. For the 406 children who attend, the school is where they get their only hot meal of the day. TOB: Looking at the cigar market today, what trends or preferences have you observed in cigars? Newman: People seem to enjoy fuller flavored cigars and thicker cigars. We have an 18-person sales force we work with and talk to all the time to monitor trends and that’s what we’re hearing from them. |
TOB: Which of your cigars performs best in tobacco outlets? Newman: Quorum, Alcazar, Cuesta-Rey all sell well in the outlets, as does NEOS, a cigarillo that comes in flavors like cappuccino, cherry, and vanilla. Rigoletto Black Jack and Number 59 Factory Throwouts are other hot selling brands from our factory in Tampa. These are made with Ecuadorian sun-grown wrappers—leaves from the top of the plant—that are off color. It usually retails for $13.99 for a bundle of 20, so they sell very well.
TOB: With cigarette margins continually being squeezed, many outlets are looking to expand cigar sales. What, in your view, can outlet merchants do to build a cigar business? Newman: Display cigars in a walk-in or wall humidor and start out with the best brands in the market. Don’t go wild with 500 facings, just put the best sellers from top manufacturers. Maybe go with half dozen to 10 sizes of the best sellers. Display is very important, so be sure your humidor is clean and kept properly humidified.
TOB: How important is firsthand knowledge of the cigars stocked? Newman: Retailers do need to be educated so they can recommend brands and explain how the cigar is made and how it will smoke. Cigar makers will help them get up to speed. We have a written program that explains the ABCs of cigars. And our representatives will sit down with retailers and employees and explain the history of cigars, how they are made, why each is different. TOB: What do you see as the biggest challenges ahead for your company and the industry as a whole? Newman: The biggest challenge we see is local, state, and federal regulation of cigars. We are very concerned about that. We are on the board of the Cigar Association of America and it looks like that within two to three years you won’t be able to smoke indoors anywhere anymore. We are also very concerned about FDA regulation. TOB: As a third generation Newman family member, what are your goals for the business? Newman: To continue to expand our brands, to continue to develop the relationships we have with retailers, and to continue to develop shapes sizes and tastes to keep up or stay ahead of the market. We feel very blessed. We have had a great run and that’s why we have the charitable foundation—to give back. • |
