The Scoop With Coop – Episode 267

When it comes to Hurricane season, there always is a possibility for impacts to the cigar industry. The tobacco producing countries of the Dominican Republic, Cuba, Honduras, and Nicaragua are all prone to damage from hurricanes. This can impact everything from tobacco farms, to curing barns, and to warehouses. In the U.S., Florida is also the home to many cigar company distribution centers, as well as small factories, and now even a major tobacco farm.

Hurricane Irma, which recently ripped through the Caribbean, actually spared that region when it came to the cigar industry. On the other hand, when it came to the U.S. and Florida, while it was not a catastrophic blow on the cigar industry, there are still impacts that will be felt for weeks to come.

Dominican Republic

Rain and wind from Irma hit the north coast of the Dominican Republic on September 7th. The Santiago metropolitan area is located in the northern part of the country about 90 minutes from the northern coast – and this is where many Dominican cigar factories have their base of operations.  There are also several growing regions located in the northern part of the country.

Prior to the storm hitting, President Danilo Medina ordered businesses closed, and this included cigar factories. There were many reports of wind and rain to the northern part of the Dominican Republic, but there was significant damage reported to facilities and tobacco. The tobacco-growing season actually starts later this month, so there were no reports of impacts to crops or tobacco in the curing barns. There were also power outages throughout the region.

Tabacalera de Garcia, the factory for Altadis, is located in La Romana, in the southeastern part of the country. The storm did not have any notable impacts here.

Cuba

Like the Dominican Republic, the storm impacted the northern and eastern parts of the country. Cuba’s main growing region is located in Pinar del Rio, which is located in the western part of the country. The Hurricane did not have an effect on the growing region as it started its northern turn toward the U.S. Like the Dominican Republic, the growing season is still several weeks away from starting.

Cuba started feeling the effects of Irma throughout the weekend of September 9th. Havana took a hard hit from the storm. There were reports of widespread flooding and storm surge. There are several factories located in the Havana area. From initial contacts Cigar Coop has been able to make, there has been no significant damage to the factories, but Habano SA has yet to make an official comment.

Florida

While the Dominican Republic and Cuba avoided any significant impacts in terms of the cigar industry, when it came to Florida, it was a different story. Florida started feeling the effects of Irma on Sunday September 10th. United Parcel Service, the industry’s preferred U.S. shipping service had also suspended pickups and deliveries during this time.

Many cigar companies have their U.S. distribution based in the Miami Metropolitan area. A good chunk of the region was under an evacuation order. The storm hit over the weekend, but many cigar companies closed prior to the weekend, and remained closed following the storm.

The significant flooding occurred in downtown Miami. Many of the cigar companies are located west of downtown. There were reports of widespread wind damage and power outages in the area.

With the closings, this put a halt to processing many sales orders and shipping cigars out of Miami. La Flor Dominicana did report some damage to its U.S. headquarters in Coral Gables, Florida and said it would remain closed for the rest of the week.

Several industry personnel, including some from Drew Estate, Gurkha, and CLE Cigar Company, were in the Spokane, Washington area for the Little Smoke. Several of these industry people remained out of town for additional days.

The hurricane had a significant impact on the west coast of Florida. Rocky Patel Premium Cigars has its headquarters in Naples, Florida, which was in the crosshairs of the eye of the storm. The company reported its headquarters did not sustain flood damage. The warehouse is still without power, but has been able to maintain humidity control through backup generators.

Further north in the Tampa area, is where J.C. Newman, Arturo Fuente, and Davidoff of Geneva have their U.S. headquarters. There have been no reports on whether there were damage or impact to those companies.

West of Orlando, Florida is the town of Clermont. It is the place where Jeff Borysiewicz’s Florida Sun Grown tobacco farm is located. Prior to the storm, Borysiewicz took precautions and removed the tobacco from the barns and placed it in trucks for temporary offsite storage. Shortly after the storm, Borysiewicz reported on social media that the barns did not sustain damage. As for his Corona Cigar Company stores, there was some minor damage, and he was able to have all of his stores opened by Tuesday.

Corona Cigar Company wasn’t the only retailer to have shops closed. Many other retailers in Florida also closed up shop throughout the weekend when the storm hit and have only recently begun to open up.

Today the U.S. House of Representatives passed a twelve-bill spending package for the 2018 Fiscal year that includes the Agriculture Appropriations Bill that was approved by a subcommittee earlier this summer. This bill includes language that calls for a premium cigar exemption and predicate date change to August 8, 2016. The bill package now moves to the Senate.

The bill was passed with 211 votes in favor of the package versus 198 against it.

The central point of interest for cigar enthusiasts is that the proposed bill has language in it that says federal funding cannot be used to finalize, implement, administer, or enforce FDA regulations on premium cigars. The proposed bill also includes language to define what a premium cigar is.  The funding mechanism would be in place for the Fiscal Year 2018 that begins October 1st, 2017 and ends September 30, 2018.

The challenge will be on the Senate end. Currently, a premium cigar exemption is not a part of the Senate Bill. In order for the exemption and predicate dates to change, the same language must be a part of the Senate bill. However, passing today’s bill marks the first time an exemption or predicate date change has passed through one of the legislative branches.

Ken Neumann, President of IPCPR commented,  “This is a monumental step for the industry and for IPCPR’s retailers. For many years we’ve been pushing the ball forward in our efforts to roll back the FDA’s oversized and ill-suited regulatory regime on premium cigars. Because of this work and because there are Members of Congress like Congressmen Bob Aderholt, Bill Posey and Congresswoman Kathy Castor who fight every day for small businesses and the premium cigar retailers across the country, we’re now on the precipice of bringing true relief to our industry.”

It is expected that, in order to resolve the differences in the bill, both the House and the Senate will go through a Congressional committee where compromises will be made.

The Rafael Nodal era at Altadis U.S.A. has begun. Nodal’s first project within the Altadis portfolio is a resurrection of the Trinidad brand with the release of the Trinidad Santiago. While word of this project surfaced during this year’s IPCPR, details have recently now been released.

The Trinidad Santiago is slated to hit retail shelves by month’s end.

The name “Santiago” is key.  This is because most of Altadis’ production occurs in Santo Domingo at the Tabacalera de Garcia factory, located in the southern part of the Dominican Republic. The Trinidad Santiago is produced in Santiago at Jochy Blanco’s Tabacalera Palma, located in the northern part of the country. Tabacalera Palma is a factory Nodal is quite familiar with as many of his Boutique Blends lines come out of that factory.

According to Cigar Aficionado, the Trinidad Santiago contains 100% Dominican tobaccos grown by Blanco in the Cibao Valley of the Dominican Republic. It will be available in three sizes: Corona, Toro, and Belicoso – each packaged in 20-count boxes. Production will be limited, but on-going.

While this is the first cigar Nodal has done with Altadis, it is not the first time Nodal has collaborated with Altadis and Tabacalera Palma on a release. Back in 2015, the three parties collaborated with the Romeo by Romeo y Julieta Aging Room Small Batch F25, a limited release project. Earlier this year, Nodal turned over distribution of Boutique Blends to Altadis U.S.A. and concurrently took on a product innovation role with Altadis U.S.A. The F25 and the Trinidad Santiago are both Dominican puros released in the same size.

Meanwhile, the Trinidad Santiago is the first regular production release since 2012’s Trinidad Paradox. Since then there was a limited edition cigar under Trinidad called Trinidad Lost Blends that was released in 2015, but the brand has pretty much been quiet.

The Scoop With Coop – Episode 266

Davidoff has announced two major executive changes to its organization. Today the company announced the departure of Chief Executive Officer (CEO) Hans Kristian Hoejsgaard and Chairman Andreas Schmid. The Board of Directors has named former Oettinger Davidoff AG COO Beat Hauenstein as its new CEO, and Domenico Scala as its new Chairman.

Hoejsgaard had been CEO at Davidoff since 2011 and oversaw one of the most successful periods of growth for the premium cigar segment of the company. According to a press release by Oettinger Davidoff, Hoejsgaard is leaving the company to concentrate on his outside board and consultancy mandates.

Scala was responsible as CFO of Syngenta and CEO of Nobel Biocare. Until May 2016, he chaired the independent Audit & Compliance Committee of FIFA.

The moves are effective immediately.

Hong Kong businessman Sir David Tang, known to the cigar industry as the founder and chairman of Pacific Cigar Company, has died at age 63. Pacific Cigar Company is the exclusive distributor of Habanos products and the exclusive distributor of Habanos SA products in the Asia Pacific region. The company also offered cigar accessories branded “Siglo” and owned 60 retail stores in Asia Pacific, China, and Canada.

The Asia Times reported two weeks ago that Tang had been given a few weeks to live.

Tang was well-known outside the cigar industry. He was the grandson of Tang Shiu Kin, who founded the Kowloon Bus Company was also a businessman and philanthropist. Tang started working at his grandfather’s firm and eventually set out on his own. He founded several businesses, including the Shanghai Tang fashion stores. Shanghai Tang became a global presence in the fashion world. He would sell Shanghai Tang to Richemont in 1998.

One of the big stories of the t2017 Trade Show was the arrival of the Plasencia family as exhibitors with their own brand. One of the new cigars showcased was the Alma del Campo. It’s the second cigar blend in the series that makes up the company’s ultra-premium Alma line.

Alma del Campo is a Nicaraguan puro featuring tobaccos from the Plasencia farms. It is available in five sizes – each packaged in ten-count boxes. Like the Alma Fuerte, the Alma del Campo’s box doubles as an ashtray.

The Alma del Campo follows up the Alma Fuerte – which was Plasencia Cigars’ first company release.

CAO Cigars final installment of its Amazon Trilogy series, the CAO Amazon Anaconda is now arriving at retailers.

The CAO Amazon Basin was the first installment of the Amazon Trilogy. It is a cigar that quickly achieved a cult status. The Amazon Basin incorporates a rare-blend, low-yield tobacco grown in Brazil known as Braganca. Because of the low yields, the Amazon Basin has been quite limited and it took over two years until it would see its only other release.

Last month, CAO announced the second installment of the Amazon Trilogy with the CAO Fuma Em Corda, using a rare tobacco with sharing the same name as the cigar na,e

With CAO Amazon Anaconda, this blend not only incorporates both the Braganca and Fuma Em Corda, but adds another low yield Brazilian tobacco known as Bahiano Habano which is used as the wrapper. As the name indicates, the Bahiano Habano comes from the Bahia region of Brazil.

The CAO Amazon Anaconda is available in one size – a 6 x 52 Toro. It is available in 20-count boxes with pricing set at $10.49 per cigar.

The Scoop With Coop – Episode 265

At the 2017 IPCPR Trade Show, Asylum Cigars launched a new all Honduran Corojo offering known as Medulla Oblongata. It’s a cigar that is going to be available in four sizes – each in a parejo and box-pressed offering.

Medulla Oblongata is packaged in 50-count boxes featuring 25 parejo cigars (known as Medulla) and 25 box-pressed cigars (known as Oblongata). The cigars feature a refillable option for retailers. Pricing is in the $7.00 to $9.50 range. The blend itself is described as an offshoot of the Asylum 13 Authentic Corojo.

The rounded and box pressed formats are available in four sizes – 50 x 5, 52 x 6, 60 x 6, and 80 x 6

The La Aurora ADN Dominicano, a line that was unveiled at the ProCigar 2017 festival was officially launched at the 2017 IPCPR Trade Show. This is a release that contains Andullo tobacco.

ADN Dominicano stands for “Dominican DNA”.  While Andullo isn’t very common in a premium hand-made cigar, the use of Andullo tobacco is an old Dominican process and the company pays homage to that process with the ADN Dominicano release.

Andullo tobacco undergoes a very different curing process than traditional cigar tobacco leaves.  This involves putting tobacco leaves in palm seed pods.  The pods are then wrapped in rope causing the andullo tobacco to compress into a thick bar almost looking like a roll of salami.

The Andullo tobacco for the La Aurora ADN Dominicano is used in the filler with Pennsylvanian, Dominican, and Nicaraguan fillers. The cigars feature a Cameroon binder and a Dominican wrapper from the Cibao valley.

The cigar is available in four sizes packaged in 20 count boxes:

  • Robusto: 5 x 50 (SRP $7.25)
  • Toro: 5 3/4 x 54 (SRP $8.25)
  • Churchill: 7 x 47 (SRP $8.50)
  • Gran Toro: 6 x 58 (SP $9.25)

Five years ago, Oliva Cigar Company launched the Oliva Serie V Melanio, a line that paid homage to company patriarch Melanio Oliva. Now the company has an all new line that pays homage to Melanio’s grandson Gilberto. This year, Oliva Cigar Company launched the Gilberto Oliva line. Gilberto Oliva is intended to be a value priced line. It’s the first new line since the Melanio brand was launched. It’s also Oliva’s first new line under in the J. Cortès era.

There are two blends. being introduced under the Gilberto Oliva brand. The Gilberto Oliva Reserva features a Sumatra wrapper, Ecuadorian binder, and all-Nicaraguan filler. Meanwhile, the Gilberto Oliva Reserva Blanc features a Ecuadorian wrapper and binder over all-Nicaraguan fillers. Both blends are offered in five sizes (Corona, Robusto, Toro, Torpedo, Churchill). Pricing for the Gilberto Oliva Reserva Blanc ranges from $5.25 to $6.40 while the Gilberto Oliva Reserva ranges from $5.75 to $6.90.

Originally the Gilberto Oliva brand was planned to be released as the Facundo Oliva brand, but there was a trademark conflict. There actually was a Gilberto Oliva brand once before back in 1995.

Fabrica Oveja Negra, the factory best known as the production facility for Black Label Trading Company and Black Works Studio, is moving into a larger, freestanding facility in Estelí, Nicaragua. Today plans were announced for the factory move. It is anticipated construction of the new facility will be completed by October 1st.

The new factory will be at located at the South entrance of Estelí on the Pan-American highway. It will include a large production area, tobacco storage facility, state-of-the-art aging room, retail store, cigar lounge and exhibition space. Factory visits can be arranged by appointment. The growth has been rapid, as it was only early in 2015 that Black Label Trading Company announced it was moving into its own factory.

“The little factory that could, is the little factory that did! We are very excited about the expansion to a larger location. Our brands BLTC & BLK WKS have seen tremendous growth since we opened Oveja Negra in 2015 and its time to grow the factory accordingly. The new location will allow us to maintain and slowly increase our production to better serve our expanding customer base. We have always grown organically and kept true to our small batch philosophy, that will not change. The new location will allow us to increase our capacity with enough room to have creative spaces and continue to focus on incorporating our artistic abilities into our products.” stated James Brown, partner at Oveja Negra and Black Label Trading Co.

In addition, Fabrica Oveja Negra has taken on other clients including Veritas, Nomad, and Emilio Cigars.

“This is a tough industry for small companies. It’s hard to get the attention you need to create a premium product. Our goal is to help support other boutique brands and grow the premium-cigar market,” added Brown.

The Scoop With Coop – Episode 264

Operation Choke Point, an initiative started by the Department of Justice under the Obama Administration that targeted certain businesses such as the tobacco industry has ended. According to a letter sent by the Assistant Attorney General Stephen Boyd sent to House Judiciary Chairman Bob Goodlatte, the Department of Justice would no longer be pursuing this initiative.

Operation Choke Point was launched in 2013 and has targeted certain legally operating industries that have been deemed “high risk” by pressuring banks to deny financial services. Targeted businesses under this program have included tobacco businesses. In fact, several tobacco-based businesses (including IPCPR retailers) have already said they have been impacted by this program and denied financial services.

In the letter Boyd stated:”All of the Department’s bank investigations conducted as a part of Operation Chokepoint are now over, the initiative is no longer in effect, and it will not be undertaken again.”

U.S. Rep. Blaine Luetkemeyer (Missouri), a major opponent of Operation Chokepoint said he will continue to push legislation to prevent a future Administration from reinstituting the initiative

The U.S. District Court for the District of Columbia has ruled that it will defer a ruling on a motion by six public health organizations to intervene as defendants in the cigar industry’s lawsuit against the U.S. Food and Drug Administration (FDA). The ruling was made by Judge Amit P. Mehta.

This motion is of particular importance to the lawsuit as if such a motion is granted by the court, the health organizations will play a key role in the forthcoming litigation.

The court is asking for a Joint Status Report that is due on September 4th for an update n where things stand with the litigation.

The action by the court was taken for two reasons: 1)  “the parties’ ongoing efforts to narrow the issues in dispute, and the potential relief sought, is likely to materially influence the court’s intervention decision”; 2) the court stated that the Proposed Intervenors concerns that the Federal Defendants will bargain away aspects of the interpretation and enforcement of the Deeming Rule are purely speculative and no evidence has been demonstrated to substantiate that claim.

Alec Bradley’s 2017 TAA Exclusive release is now heading to retailers. This week, the company announced shipment of the Alec Bradley Black Market Illicit to Tobacconist Association of America (TAA) retailers.

While the Illicit is branded under Alec Bradley’s Black Market line, it is a different blend. The Illicit features a Nicaraguan wrapper, Honduran and Nicaraguan binders, and fillers described as “from small yield farms” in Nicaragua. Illicit will be offered in one size – a 6 x 50 Toro. The cigars will be packaged in 22-count boxes.

Pricing of the Illicit is set at $8.75 per cigar. The Black Market Illicit is also planned to be an on-going exclusive release for its member

Fans of Illusione’s Singularé series have a new installment to look forward to. At the 2017 IPCPR Trade Show, the company announced that the next installment will be a 7 1/2 x 50 vitola known as the Illusione Singularé 2018 Turin.

The new Illusione Singularé 2018 Turin will be packaged in 15-count boxes. The cigar features all-Nicaraguan tobaccos and includes the Nicaraguan Corojo ’99 Cafe Rosado (a.k.a. “Epernay” wrapper. The Turin is branded as the Illusione Singularé 2018. There will be no 2017 installment.

Singularé first made its debut in 2010, and with a couple of exceptions, this has been an annual limited edition release. It has become one of Illusione’s most popular lines. Last year, Illusione announced that the Illusione Singularé 2010 Phantom the Illusione Singularé 2014 Anunnaki, Illusione Singularé 2015 Miserere (6 3/4 x 48) and  Illusione Singularé Kadosh were becoming on-going releases.

It’s been three years since we have seen a nationwide launch out of Davidoff’s Zino brand, but at the 2017 IPCPR, the brand came back with a bang – introducing the Zino Platinum Z-Crown. This is the brand’s most super premium release to date.

The Zino Platinum Z-Crown consists of two blends, each available in a single, unique vitola. Both blends incorporate eight-year-old aged fillers. Once rolled, the cigars were rested another four years.  The Zino Platinum Z-Crown Stout is a 7 x 52 torpedo consisting of a Dominican Semilla 253 wrapper, Ecuadorian Connecticut binder, and filler from the Dominican Republic. Meanwhile, the Z-Platinum Z-Crown Chubby is a 4 15/16 x 54 perfecto consisting of a Semilla 702 wrapper, Ecuadorian Sumatra binder, and a combination fillers from Nicaragua and the Dominican Republic.

Each Zino Platinum Z-Crown cigar is packaged in an individual blue glossy coffin. The cigars are packaged in ten-count boxes that keep to the contemporary look of the band. As mentioned, these are super premium offerings. The Stout is priced at $75.00 per cigar while the Chubby comes in at $100.00. Both cigars are limited in production to 1,000 boxes.

Drew Estate has announced that Scandinavian Tobacco Group (STG) Canada will now handle distribution for its products in both the domestic and duty-free markets in Canada. Concurrently, this announcement ends Drew Estate’s relationship with House of Horvath, which had been handling Drew Estate’s distribution for the past three years. The new distribution agreement with STG Canada goes into effect August 28, 2017.

In a press release announcing the new partnership, Alex Goldman, Vice President of International Business Development at Drew Estate said, “We are excited about our partnership with STG Canada, and plan to build on the success that we have enjoyed in this tough market over the past few years.  I want to thank the House of Horvath team, and especially Colm and Cathy O’Shea for their passion and professionalism in building up the Drew Estate brand in Canada over the past 3 years.”

STG Canada is the Canadian subsidiary of Scandinavian Tobacco Group, the parent company of General Cigar Company..

The Scoop With Coop – Episode 263

Todos Las Dias, a new line Steve Saka’s Dunbarton Tobacco and Trust that was showcased at the 2017 IPCPR is now en-route to retailers.

Todos Las Dias is Dunbarton Tobacco and Trust’s first Nicaraguan puro cigar. It is produced at the Joya de Nicaragua factory in Nicaragua. The cigar is available in four sizes: Half Churchill, Robusto, Toro, and Double Wide Belicoso.

Each size is available in ten-count boxes. Pricing range from $10.45 to $12.45 per cigar.

Matt Booth’s comeback to the premium cigar industry is now in full swing. This week, Hit & Run, a collaboration Booth has worked on with Robert Caldwell has begun to ship to retailers.

A small batch of Hit & Run was shipped to select retailers prior to the Trade Show. The cigar is produced at Tabacalera William Ventura in the Dominican Republic. The blend consists of an Ecuadorian Habano wrapper, Indonesian binder, and Dominican filler. The cigar is being offered in five sizes: Corona, Almost Robusto, Piramide, Super Toro, and Perfecto (5 1/8 x 60). The cigars are packaged in ten-count boxes.
Booth and Caldwell also showcased a second collaboration at this year’s iPCPR Trade Show done in conjunction with AJ Fernandez. That release was originally called “The Truth” but the name is being changed due to trademark issues.  This second collaboration is expected to hit retailers this Fall.

Maine and Oregon Raise Tobacco Purchase Age to 21

The number of U.S. States that have a minimum age of 21 to purchase has gone up to five. Maine and Oregon now join Hawaii, California, and New Jersey as States where the minimum tobacco purchase age is now 21.

The raise to age 21 in Oregon occurred this past week when it was signed into law by Governor Kate Brown. Brown’s signature on the bill came as no surprise to many.

After the Maine legislature passed a bill to raise the tobacco age to 21, it was promptly vetoed by Governor Paul LePage. At the time of the veto, LePage said, “I’m not going to strap a gun to their shoulder and go fight a war if they can’t go buy cigarettes. I’ll tell you, this is just sinful, it is absolutely sinful, and I believe that at 18 they are mature enough to make a decision and I’m tired of living in a society where we social engineer our lives.”

About a week after LePage’s veto, the Maine legislature overrode the veto, thus raising the smoking age.

The new law in Maine goes into effect July 1, 2018. As for Oregon, the law has gone into place immediately.

For the fifth year in a row, L’Atelier Imports is releasing its Extension de la Racine line. This year’s edition known as ER17 is a throwback as L’Atelier brings back the same 5 7/8 x 52 Toro size. This is a cigar that as in the past was made available to only those retailers that attended the IPCPR Trade Show.

The Extension de la Racine series was launched in 2013. It is an annual limited production series by L’Atelier Imports that is done in a different size each year. In 2013, the ER13 was the first installment of the Extension de la Racine and it was released in a toro size.  

The name L’Atelier Extension de la Racine is French for “extension of the root”.  It is meant to be an off shoot of the original core L’Atelier line. The blend features a Nicaraguan Criollo wrapper, L’Atelier’s signature Sancti Spiritus binder, and Nicaraguan fillers.