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Written by Kevin Godbee

Monday, 21 January 2008

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Eddie Ortega, co-owner of EO Brands, (makers of 601, Vibe and REO cigars), just days away from an important trip to Nicaragua for a top-secret new endeavor, took time out for a nice Cuban lunch, cigars and a chat with Cigar-Review.com owner, Kevin Godbee.

We talked about his current success with the line of 601 Cigars, his start in the industry at Puros Indios, politics in Latin America and the US (he's a stout Republican), and a new line of accessories and hints of more new cigars to come. Also, unbeknownst to many, Eddie was one of the creators of the well-known 5 Vegas Cigar.

After having a nice lunch at the Cuban restaurant near his office, we sat down and smoked my favorite cigar in the 601 line, the green label Oscuro Corona. Here's what we talked about.

Kevin: You seem to have reached a certain level of success with the 601 line and also Vibe and REO. Can you give us a brief background on your history in the cigar business?

Eddie: I started back in the late-90’s – in 1997. I actually come from the computer industry, but back then I was married to the daughter of Rolando Reyes from Puros Indios and in 1996 – 97 when there was a big boom he started nagging me about about coming to work for him. They were busy and he needed some help running the company, so I went over to work for him at Puros Indios.

From there I got divorced. I started my own company World Cigars with some other friends and created the 5 Vegas (pronounced Cinco Vegas) Cigar line. (Editor’s note: The 5 Vegas Cigar line and trademark is now owned by Cigars International.)

After World Cigars, I was managing Reel Smokers in Deerfield Beach (Florida). They are good friends of mine. Then I met up with Eric Espinosa who is my partner here at United Tobacco (EO Brands). We decided that instead of working for somebody else and not making any money that we would try to make our own money with our own brands. That’s where were at right now. (United Tobacco / EO Brands was founded in 2003.)


How is business right now and what is your outlook for the coming year with continued smoking bans and a likely recession and possible inflation?

Right now we are doing great. Our 601 line, which is our main line, is doing outstanding. The sales are doing very well for 601, and this year we expect to be even better than last year.

In terms of the recession, the economy and everything else, this industry, which is just like anything else, like any other business out there, is basically a consumer oriented business where the money in the economy drives sales.

However, even during a recession or a slow economy, the worst thing that can happen is that sales might drop some, but basically if you smoke, you’re gong to continue to smoke.

Look at all the taxes on this industry. Last year, cigar imports were up about 7% from the previous year so it’s a solid industry. Right now, it’s basically better than it was 5, 6 and even 10 years ago. It was over-inflated back then. Right now it is solid, it’s got steady growth and it’s been doing well all these past years and keeps getting better and better.


When we spoke earlier at lunch, I think you were saying that sales might shift to lower retail price items?

Again, it comes back to the money in the economy, loss of jobs, but worse come to worse, somebody might switch from buying a $20 cigar to a $5, 6 or $7 cigar, but we don’t have a problem with that because our cigars are not over-priced.

When there is a recession, everybody gets affected by it to a certain extent.


Politics seem to have an effect on the cigar business here in the US and in Latin America. Here in the US there has been the ongoing anti-smoking zealots, which ironically seem to have helped the cigar business on a national level, (as you said, sales on a national level have gone up), but perhaps hurting it on a local level.

Local establishments have either lost business or closed entirely because of smoking bans, while at the same time, overall demand for cigars has increased, perhaps because the more you tell people they can’t have something, the more they want it.

Do you agree with this assessment, and what examples come to mind either way?

What we’re seeing now-a-days, doing so many events supporting the brand is that everywhere we go, the local stores are switching from being a local retailer where you walk in and walk out, to being a store where people hang out. Everybody’s putting in lounges. Everybody’s expanding creating a place where the crew can hang out.

What you have is that nation-wide, everywhere you go there’s bigger and bigger stores, not super-centers, but stores that you go in and on any one particular day and time that you go in there, you’ll see 4, 5, 6 to ten guys hanging out just sitting on the sofa watching TV or just hanging out, which is actually good for the business.

It’s not somebody coming in grabbing a cigar and leaving. It’s a very friendly environment where everybody hangs out and shares a nice time of relaxing and having a cigar.


In Latin America, there has been a resurgence of elected leaders on the political left, such as; Daniel Ortega in Nicaragua, Rafael Correa in Ecuador, Evo Morales in Bolivia, not to mention Hugo Chavez of Venezuela.

Do you anticipate any negative ramifications on cigar production, or at least anything you need to keep an eye on in this political climate? Where is your production?

I get that question a lot. Everybody asks about Daniel Ortega taking over Nicaragua. Bottom line is that there are no problems in Latin America. Our problem right now is not in Latin America. Our problem is here. Daniel Ortega hasn’t done anything to stop the tobacco (business).

First of all, it’s a big business. Nicaragua doesn’t want any problems with the tobacco industry because it employs thousands and thousands of people. (The) Dominican (Republic) doesn’t want any problems … So Latin America in reality … we’ve got bigger problems here in the US than we do in Latin America.

Regardless of what happens over there, tobacco is such a big part of the economy that they are not going to do anything to damage that. All the harm is being done here.

We’ve got to get rid of the Democrats and get some Republicans up there. (Laughter on both sides). No? Should I say that? (More laughter). So vote Republican! Even though you might like Hilary, don’t vote for her! (Continued laughter). Don’t elect a Democrat.


Getting back to EO Brands, do different cigars in your line target different types of smoker’s or smoker tastes? Do you have a favorite?

Actually, the one we are smoking right now is my favorite. The Oscuro Corona (the green label). Basically, what we have right now, we were disappointed with REO and Vibe … they actually did very well out in the market, but in terms of manufacturing consistency, we didn’t do as well as we expected.

The 601 is completely the opposite. Now it’s going on its’ second year and we sell all we get. You were back in the humidor, and you could see that we are out of stock on just about everything right now.

601 is available is four flavors. It’s all Nicaraguan, made by Pepin Garcia, who is a very big name now-a-days. The full line covers all your tastes from medium with the Connecticut, lots of flavor with the box-pressed Maduro to a really strong flavor like the Oscuro – we cover the whole spectrum.


What are your recommendations in the 601 line for a mild, medium and full-bodied tastes out there?

I wish I could, but we don’t have any mild cigars. Maybe in the future, but out of the 601 line, the times we do events and people ask what they can smoke, I give someone a Connecticut and they come back choking later (laughter) and it’s not that it’s that strong, but when you think of a Connecticut wrapper, most people think of a mild cigar, like a Macanudo.

Starting at medium, we’ve got you covered. If you like Macanudo, we might be a little strong for you.


What’s a good medium cigar to try?

Medium being our mildest, the Connecticut. If you like lots of flavor, lots of flavor, the box-pressed maduro. If you want a little more spicy, the Oscuro, the green (label), and if you really want a kick – our strongest cigar is the Red (label).
It’s all subject to (individual) tastes. We get a lot of consumers that think the green is stronger, it’s all subjective.


Are there some new products on the horizon?

Yes, we have some new stuff coming out. We are actually working on a big project right now with Rocky (Patel). That’s why I am going down (to Nicaragua) on Tuesday. And hopefully we’ll get it going.

Is there anything you can tip your hand on, or is it a secret?

I don’t even want to say the name yet. (Smiles) I don’t want somebody cursing me.

I can tell you that we are also working on a new line of accessories. We are very good friends with a Cuban painter that does beautiful paintings that we are going to put on lacquered humidors and ashtrays.


When will we see that coming out?

Hopefully a couple of months before the RTDA (the industry trade show in July 2008) we should have that ready.

Anything else you would like our readers to know?

EO (EO Brands, the umbrella brand over the 601, Vibe and REO lines) stands for Espinosa and Ortega. (Laughter). (Editor’s note: Eric Espinosa and Eddie Ortega are the co-owners of EO Brands.)

A lot of times, people are referring to our cigars as the Pepin 601, but it is the EO 601. This year we are going to focus more on that … Espinosa / Ortega – get the “EO” out there.


Check out Untied Tobacco’s web site and if you haven't tried the 601 line, we recommend adding it to your shopping list next time you buy cigars.

See the review of the 601 Red Label here.

 

 

Kevin Godbee & Eddie Ortega

 

 

 

 

 

 

 

 

 

 




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