TOB: Can you tell us a little about the company’s history? What differentiates Cusano from other cigar makers?
Mike Cusano: Dom Rey cigars began at the peak of the cigar boom in 1996. We started out as one of the 200 boutique manufacturers that were created by the boom. Only eight survive today; we are proud to be one of the successful ones. We have more than survived—we have prospered. One of the keys to our success has been our commitment to quality, consistency and our customers.
From the inception of the company one of our standards has been the use of exotic wrappers. The wrapper when used with balanced filler makes up 50 percent of the taste of the cigar. Our premium cigars all contain more than one wrapper leaf, we use wrapper in the filler creating tastes that stimulate the cigar smoker’s palate exponentially. This commitment to taste permeates all of the products that we make and distribute.
TOB: What are your most popular cigar products suitable for tobacco outlets?
Cusano: Our premium tray and refill bundle program has become the mainstay product in the outlet channel. An increasing number of tobacco outlets are carrying our premium boxed lines in addition to tray and refill program, and our flavored brand Dominican Sweets. Working with CTS Concepts, we developed the Perfect Cut product line, which fills the gap between domestic cigars and our tray and refill program (M1, P1, MC, and CC brands). Perfect Cut offers a beautiful Connecticut Shade wrapper with 100 percent natural leaf binder and filler tobacco at a cost slightly above domestics. Perfect Cut does not require humidification and offers a corona size in a tube and a “chubby” cigarillo packed in tins. Clearly the tobacco outlet channel has matured to the extent that an increasing variety of cigars are successfully being sold and smart retailers are enjoying the higher margins associated with these newer cigar brands.
TOB: What trends or preferences have you observed in the cigar category?
Cusano: In the premium market an increasing number of cigar makers are introducing cigars that make use of multiple wrappers in order to create exotic tastes for their cigars. This is something we have practiced since our inception. Our 91-rated Cusano 18’s and Cusano Corojo both contain more than one wrapper in their construction as do all of our premium cigars.
There is still a broad movement taking place towards small cigars for several reasons: smoking bans restrict the places cigars can be smoked, consumers who are curtailing their cigarette consumption, or looking for a good in-between small cigar that has a very unique taste profile.
TOB: What new products have you introduced recently and what product lines do you plan to expand in the next six months?
Cusano: We have recently taken on the exclusive U.S. distribution for Royal Agio’s Panter and Mehari line of cigarillos. Royal Agio has been making cigars for the world market since 1904 and currently sells 800 million cigars in 130 countries. The Panter and Mehari cigarillos use exotic wrappers to create a superior tasting product that fits perfectly into the expanding small cigar market.
Through our affiliate CTS Concepts, we are also bringing a 100 percent all-natural tobacco cigar, which needs no humidification, to the outlet and convenience store markets. The new cigar, called Perfect Cut, will be available in a corona tube and cigarillo tin. The custom-designed display provides an excellent home for both the corona tubes and cigarillo tins in less than one square foot of space. Both products are uniquely packaged to provide additional merchandising options on shelving within the tobacco department and margins that exceed domestic cigars offered.
TOB: Will you be offering any promotions geared toward outlet retailers?
Cusano: The specials that we offer at the Tobacco Plus trade show are available to all of our customers when they take on new lines. If a retailer is interested in expanding their offering of Dom Rey products we will work with them to make it happen so that it works to their advantage.
TOB: How does Cusano work with retailers to help them educate staff and customers about cigars?
Cusano: We have a dedicated Dom Rey team member who travels throughout the country to conduct cigar training sessions with staff to increase their cigar knowledge and sales capabilities. We also work with retailers to stage cigar events that promote the sale of DomRey products. Retailers can take advantage of this service by contacting their sales representative or our main office.
TOB: How does Cusano work with retailers on events? Can you describe an event at a tobacco outlet that you contributed to and what that retailer needed to do to prepare or have on hand at the event?
Cusano: We will work with any of our retailers to hold a cigar event. We provide the personnel and the cigars, and will work with the retailer to focus the goals of the event to maximize sales. Recently we held a very successful event with Tobacco Depot in Sarasota to introduce our new line of Cuvee Blanc cigars.
The major role of the retailer is to contact their customers and get them out to the event. We assist in this process by providing postcards and point of sale material to advertise the event. We co-op a special price so the consumers attending can have a strong purchase opportunity the night of the event.
In addition, we educate the customer about each cigar, get them excited, and assist with the selling of the event specials. We offer customers written instructions on “how to hold a successful cigar event” and make this available to all of our retailers.
TOB: What can merchants do to increase cigar sales? How wide of a variety do they need to offer? How important is display?
Cusano: Display is crucial to the successful sale of cigars. The success of our Premium Tray and Refill program is evidence that display and placement are very important. We are releasing a brand new set of point of sale material for all of our products that has been crafted specifically to increase consumer sales. Retailers need to offer a full range of cigars that covers consumers’ price and taste spectrum.
Constant employee training, consumer events, and regular in-store promotions (monthly and seasonal) are all very important to a retailer’s sales results. Selling an easy-to-explain product program like our tray and refills, with self explanatory labeling helps to break the ice when employees are afraid to approach a cigar consumer. Our products were designed specifically with tobacco outlets in mind. We have thought through the entire process until the product hits the checkout, by delivering our cigars complete with barcodes on every stick. Giving employees the training breeds confidence and helps turn clerks into salespeople.
TOB: There has been a great deal of controversy about regulation of cigars and tobacco by the FDA, as well as tax increases. What is your view of FDA regulation and how it will impact the industry and your business?
Cusano: Cigars and ancillary products are retailed in all 50 states. The American populace is more than capable of making an informed choice as regards their use of tobacco products. Adding FDA regulation to tobacco products overburdens a government agency that is already overwhelmed by the coverage of a widely diverse universe of products with no discernable benefit.
TOB: What do you see as the biggest challenges ahead for your company and the industry as a whole?
Cusano: Our industry, and our customers, must remain vigilant regarding the vocal anti-smoking establishment that is now seeking to achieve, through excessive taxation and regulation, what they cannot achieve through the legislative process. Presently, there are more than 50 million Americans who regularly use and enjoy tobacco products. There are several million more Americans who rely on the tobacco industry for their livelihoods whether in manufacturing, distribution, or retail. We cannot continue to think “it can’t happen here” in regards to losing our freedom of choice to use tobacco products.
As a company we need to challenge ourselves to continue our growth and still live by the values that have made us successful.
TOB: What are your goals for the business?
Cusano: Our goal is to continue to be partners with our retailers, vendors, and employees while striving to constantly exceed their expectations of “what a cigar should be.” •