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Written by Jamz

Saturday, 27 December 2003

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Top 25 Cigar had the chance to ask a few questions of Nick Perdomo, the president of Tabacalera Perdomo.

Nick Perdomo of Tabacalera Perdomo

Tabacalera Perdomo is home to some of the hottest cigar brands in the industry.  One would expect to find a bunch of folk who take themselves pretty seriously and focus on the marketing aspect of their successful business.  Nothing could be farther from the truth.  Top 25 Cigar had the chance to ask a few questions of Nick Perdomo, the president of Tabacalera Perdomo.  We think you'll find as we did, a great bunch of folks led by a someone with a true passion for cigars. Top 25 Cigar wants to thank Nick Perdomo from Tabacalera Perdomo for taking the time to answer our questions.


TOP 25 CIGAR: Your company history has been well documented in other interviews.  Tell us about your company today.  What are your goals for the company in the today’s cigar industry?

NICK PERDOMO: I’m proud to say that our company has consistently focused on controlled growth.  We have become vertically integrated as we now grow over 75% of our own tobacco and manufacture our own cigar boxes, cellophane tubes and other items vital to the packaging process.  We know that to survive in this business you have to control your own destiny and we’ve succeeded at that.

TOP 25 CIGAR: What motivates you and your company?

NICK PERDOMO: I don’t know if you can classify this as a motivation but it’s certainly an obsession and that is to manufacture a quality cigar through and through.  All the emails, letters and phone calls praising our brands motivates me, but what motivates me most is when someone is smoking a Perdomo cigar and you can see the enjoyment on their face.  When I see that, I want to run through a wall for my customers.

TOP 25 CIGAR: What are your greatest concerns?

NICK PERDOMO: Taxes and legislation.  What we need today is less government and more places to relax and enjoy a great cigar.

TOP 25 CIGAR: Do you market your cigars outside the US?  Where?  How successful have you been marketing cigars outside the US?

NICK PERDOMO: Yes, we’ve been marketing our cigars outside the U.S. for five years now.  We’re widely available throughout most countries in Western Europe.  We’re making tremendous progress into markets in Eastern Europe and the Russian Federation.  We’re also sold in select countries in Central and South America as well as the Pacific Rim countries and Australia/New Zealand.  We are blessed our international business has blossomed every year and it now represents about 20% of our overall revenues.

TOP 25 CIGAR: Europe is a stronghold for cigars made with Cuban tobacco.  Do you think the Europeans will acquire a taste for Nicaraguan, Honduran, Brazilian, and Ecuadorian tobacco as the US market did?

NICK PERDOMO: Well, I can only speak with regard to Nicaraguan tobacco.  Many people who I’ve spoken to in Europe who smoke Cuban cigars feel that Nicaraguan cigars not only rival Cuban cigars for flavor and craftsmanship, but in many cases and classifications exceed them.  I agree with that assessment.

Nick Perdomo in the ageing room.

TOP 25 CIGAR: Do you think the premium cigar business is expanding, steady, or declining today?

NICK PERDOMO: I think the industry is slowly expanding again.  But the quality-driven cigar makers in this business like Tabacalera Perdomo will continue to witness growth above the overall market rate.

TOP 25 CIGAR: What do you think the industry will look like in the longer term, say 5-10 years from now?

NICK PERDOMO: That’s a very good question and difficult to answer.  Despite all of this ridiculous anti-cigar legislation, I believe the outlook for the industry remains vibrant.  Another important factor depends on how long Castro remains in power and how the market shakes out after that.  But our situation is unique since we have many family members and friends still on the island.  I believe we will be making cigars in Cuba within that time frame and I truly hope my Dad will see that special day!

TOP 25 CIGAR: Do you see the rise or fall of tobacco production in important tobacco producing areas at this time?

NICK PERDOMO: Nicaragua is not only substantially increasing its cigar tobacco production but its growing operations as well.  Many of the other cigar producing countries are experiencing quite the opposite.

TOP 25 CIGAR: From a competitive standpoint, do you think the premium cigar business is playing on a level field today?

NICK PERDOMO: I think there are areas where the large tobacco conglomerates have advantages such as leveraging popular brands to get a tobacconist to carry an underperforming brand.  And there are areas companies like ours have a distinct advantage because we’re able to move and shift gears light years faster than the large corporations.  So overall, I guess we’re on a level playing field.  I wish I had the budget these large tobacco companies have.  But when I look back 12 years ago when I made 9,000 cigars a year out of a small room and now with a staff of over 800 people, I feel very proud of our hard work and accomplishments and I just thank my customers every day for their loyalty and support through the years.

TOP 25 CIGAR: We have heard that General Cigar (Swedish Match) and Altadis no longer have tobacco research departments to breed, test, evaluate, and recommend tobacco to the growers.  What will be the impact on their business and their suppliers?  Will there be an impact on the industry overall?

NICK PERDOMO: We have a tremendous amount of respect for those two companies and I really don’t know what the impact will be.  Our company grows most of its own tobacco and we conduct our own tests to evaluate seed strains, soil and other growing matters, so it has no impact on Tabacalera Perdomo or our growing operations.

TOP 25 CIGAR: We have heard that the premium cigar business is only 5% of the US cigar market.  The other 95% are machine made cigars.  Is the machine made cigar business profitable?  Do you feel these numbers are accurate?

NICK PERDOMO: We only manufacture handmade premium cigars, so I’m really not in a position to answer to the profitability of the machine made cigar business.  As for the industry numbers, you would really have to talk to my marketing department about that.  But instinctively, I would believe that the premium cigar business is higher than 5% of the overall market.  A lot higher.

Nick Perdomo in the humidor at Tabacalera Perdomo.

TOP 25 CIGAR: Do you think a company must own or control manufacturing in order to survive and be successful in the premium cigar business?

NICK PERDOMO: Yes I do.  That’s why we started to become vertically integrated over 6 years ago.  The quality issue is the most important aspect of this.  Our customers deserve the very best.  The ability to control your destiny provides just that.

TOP 25 CIGAR: How is Tabacalera Perdomo different from other companies that became established because of the cigar boom in the 90’s?

NICK PERDOMO: We are one of the few that’s still standing but we were in the industry well before the cigar boom came along.  To be honest, the cigar boom wasn’t a prosperous time for our company.  We were still making premium cigars in the U.S. and our production costs were sky-high.  Thank God, things are much better now and our mantra of quality continues to take us to higher levels.

TOP 25 CIGAR: You have obviously been successful competing against the larger players in the premium cigar industry.  What is the secret to your success?

NICK PERDOMO: First of all, I have a tremendous amount of respect for all of the cigar manufacturers.  And I have to believe that they respect us for what we’ve accomplished so far.  I don’t know if we have a standard formula for success, but I do know that our focus hasn’t changed since we started out – we want to revolutionize the cigar business through innovation and quality.  From highly distinctive shapes that my family made in Cuba to outstanding packaging and cigar presentations to the impeccable quality, strength and flavor of our tobaccos, they are all reminiscent of the Cuban cigars of yesteryear.  Retailers ask me, “Nick, you need to use Connecticut shade wrapper with light fillers.”  I resisted because I believed and still believe the market is highly receptive to more flavorful, complex cigars with Cuban seed tobaccos.  People are always looking for a great tasting cigar with flavor and superior quality and that’s what we provide.  That’s our secret, I guess.

TOP 25 CIGAR: Perdomo has been a leader in the trend towards stronger cigars for the last few years.  What trends do you forecast for the next few years?

NICK PERDOMO: I don’t know if “stronger” is the right word for it.  I believe our cigars are more flavorful and complex.  I have tasted light-bodied cigars that I found to have a strong, harsh and bitter taste.  That’s because they are virtually flavorless.  That’s why I’m obsessive about strictly overseeing our fermentation and quality control processes.  That’s where the heart of the matter is.  I believe the future trend is for us to stay the course we’ve already set and continue to provide the customer with the best cigars possible.

TOP 25 CIGAR: Tabacalera Perdomo is successful by most business measurements.  That being said, if you had it to do all over again, is there anything you would have done differently?

NICK PERDOMO: I don’t think so.  Although we struggled in the beginning like any other business starting up, we worked harder and persevered through it all.  I believe the true strength and spirit of our company comes from those very tough days and it had made us a better company.  We are so blessed.  God had been so good to Tabacalera Perdomo.  I am fortunate to have the best workers in the business who are dedicated to propelling us forward and striving to be the very best.  Our workers are direct extensions of my family.

Account Manager Phil Labondano, Chief Marketing Officer Al Argenti, International Sales Director William "Billy" Perdomo, Nick Perdomo, Sales Manager Arthur Kemper, Account Manager Steven Hernandez.

TOP 25 CIGAR: What Perdomo cigar is your personal favorite?  What non-Perdomo cigar is your favorite?

NICK PERDOMO: My favorite Perdomo is my favorite?  That’s easy.  In the morning, a Perdomo2 Rhombus or a Perdomo Reserve “X”.  At lunchtime I enjoy any Estate Seleccion and to the top of the evening, Edicion de Silvio can’t be beat.  To answer your second question, to be honest, I really view cigars in terms of tobacco origin and not manufacturers.  That being said, I find Nicaraguan tobacco to be of superior quality and flavor to any tobacco producing country.

TOP 25 CIGAR: Since you smoke cigars for a living, do you still get enjoyment from smoking a cigar?  How many cigars do you smoke a day?

NICK PERDOMO: Cigars are my passion and not much brings more enjoyment to me than an exceptionally fine cigar.  I smoke 5 to 6 cigars a day.

TOP 25 CIGAR: IF YOU COULD SMOKE ONLY ONE CIGAR, IN ANY ONE PLACE, WITH ANY ONE PERSON, WHAT CIGAR WOULD IT BE, WHERE WOULD YOU SMOKE IT , AND WHOM WOULD YOU SMOKE IT WITH?

NICK PERDOMO: I would definitely love to have an Edicion de Silvio at our old home in Havana, sitting on the outside deck with mi abuelo (my grandfather) Silvio Perdomo if he were still with us today.  That would be so great.




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