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Q&A with Director of Operations

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I just started here and I was considered an "insider" because of my position. I am Director of Operations for Cremo Premium Cigars.

The reason I have started this thread is so people can ask questions. Now, they have a section about humidification and storage. If it revolves around that, ask in that area. I love letting people know how things work. While I have business info, some things I will not give away (like a trade secret) but will still attempt to answer the question in best possible form.

So, what do you want to know? I am a busy guy, but I will try to answer as many questions as possible.

- Josh
 

MoJo

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Thanks for the thread!

couple questions that I've been curious about:

-What are ways you suggest for someone to "get into the cigar industry"?
-Online vendors vs B&Ms; From Cremo business perspective, do you prefer one over the other?
-Lastly, favorite cigars?
 
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Thanks for answering some questions. Recently I've been thinking about "boutiques":

How do you define “boutique”? Is it based off number of cigars produced, a mindset, something else, etc? And on the topic of boutiques, there seems to be a lot of brands and lines out on the market now. Do you think the current industry pace of new releases is sustainable?
 
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I would be interested in learning about the different levels of cigar rollers and how one earns that status.
 
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Time to answer questions. Sorry for the delay, but I am prepping for a night out this New Years (I hope you all have a great one by the way).

Lets start with the first ones:

-What are ways you suggest for someone to "get into the cigar industry"?
-Online vendors vs B&Ms; From Cremo business perspective, do you prefer one over the other?
-Lastly, favorite cigars?

Ways to get into the industry. Well, many start as a sales rep and when they sell a lot, a lot of perks come into play, such as events, and managing a team. I started as a reviewer and this company was new, so it was easier to find another position outside of a sales rep. This industry is a difficult one to gain in at times. But I have seen sales reps make a lot of money, get recognition, and some even get salary since their accounts produce so much.

Online to B&M... B&M is my preference. We have an online store because some people cannot get the smokes since it is not sold near them, or they live 2-3 hours from the closest shop. To help the stores though we price accordingly as to not undercut the B&Ms.

Favorite cigar... tough one. I would say Cremo (it is, the Intrepidus Classic is why I joined this company and I love it) but I won't put that since I work for them. Hard to say though. I love the Cain F double toro, but also a Fuente 858 Natural (first cigar I ever had) and the Oliva Serie V torpedo. Too many to name which I think about it.

Is Cremo based in Minnesota?

No, we are based out of Miami, FL. We are made at El Titan de Bronze, which is located in Miami, and have some of the best rollers in the world.

How do you define “boutique”? Is it based off number of cigars produced, a mindset, something else, etc? And on the topic of boutiques, there seems to be a lot of brands and lines out on the market now. Do you think the current industry pace of new releases is sustainable?

That is so subjective on many levels. The word means "shop." I think it is a matter of how it is produced (some rollers can only make so many a day) and the oversight (quality control). I would not say the total production matters since I can have a very large factory with every roller making 100. Well, 50 rollers will produce 5,000 sticks a day. It is how they are setup that I think makes a difference, and how many names you have. Like you can have a lot of lines, but after 15 years, that is bound to happen. Whereas, if you have lots of lines, and brands (think Altadis), it becomes more of a conglomerate and you lose focus on the specializing. You are not just ready to make a new blend for one line, but a new blend, each, for 25 lines. You cannot focus or concentrate as much on each stick.

I would be interested in learning about the different levels of cigar rollers and how one earns that status.

That one is a tough one. I do not deal with that as much, but I will do my best to answer. The higher the level, the better. Nine is the highest. Now, it is experience and time that makes that increase. Some brands that might be lower end, they overlook some mistakes. As they see your skill increase, you go up a level and might roll for a different line or brand. It takes a lot of work. Also, these rollers treat it for what it is: an art form. They hate seeing failures, but they learn from them. That also helps increase skill.

Keep those questions coming!
 
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Thank you for the insight. Rick, you asked my question already. The rollers are "highly skilled" labor in my opinion. I am not surprised that so many rollers are women. They have smaller, and presumably, more dexterous hands, which probably increases their ability to make the fine adjustments needed when fitting tobacco. But that's just my hunch. Very interesting thread. Thanks again.
 

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Thanks for the thread Josh! It is always great when people in the industry, especially those working for a specific manufacturer, are willing to put themselves and their company out there and open up. Kudos


Sent from my iPad using Tapatalk HD
 

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Thank you for taking the time to post. Nice thread.
I forgot to ask my question... LOL. What's your take on why cigar companies don't post generic blends?

I don't think it would be wrong to mention general primings along with the country of origin. For instance, wrapper is a "Ecuadorian Habano VISO," binder is a "Ecuadorian Connecticut SECO," and filler is blah, blah, blah... obviously listing all of the various fillers and primings. As a consumer that would actually be informative. Saying how many leaves (even partial, like half or quarter) would be great also... I guess I'm not sure if there is any harm publishing this information. It's not like you're listing the region of the farm with the various countries of origin. That said, knowing if it's a Nicaraguan Jalapa or Esteli (for example) would be great too. Sorry for the length of my question, but I'm interested in your perspective.
 
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"The rollers are "highly skilled" labor in my opinion. I am not surprised that so many rollers are women."

This is a misconception. There are many men and women rollers. Some factories have more men, some women. When rollers came here from Cuba during the war (around 100 years ago), majority were men. A lot of women did it because it was labor they could do as well.

What's your take on why cigar companies don't post generic blends?

Some of that is just a matter of how much people want to read (some want more, others the basics) and trade secrets. If you have a big brand it is easier to make a knock off. Some companies do though (even inside the box). I have seem some where they tell you that, and how old the leaves are. In the end, it is majority of market. Some do not like technical data. I give a car as an example. When a transmission has a hard shift, a mechanic can just say the internal parts were sticking due to dirty fluid, and the customer is happy, whereas if they go about mentioning an solenoid is not engaging properly due to pad debris and improperly maintained transmission, the hydraulic function is not engaging with proper timing causing it to shift hard. Once you say solenoid, they are lost or bored. Same thing, believe it or not, happens with cigar smokers. For us personally, it is a matter of trade secret. We will say what it is made of, but not specific enough where you could make your own.

Loving the questions! Keep them coming!
 

orangedog

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Josh - thanks for taking the time - very generous idea to answer questions.

Curious if you could elaborate on what is the most challenging operational aspect of being a director of operations in the cigar industry, and how you go about finding a solution. (IE determining the pricing for a new cigar that is coming to market, forecasting demand to guide production, deciding when to expand a line of cigars, securing tobacco and/or packaging material for future production, etc.)
 
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No problem. I love letting people know what goes on. The reason is because it helps people appreciate their cigar more.

The big picture is the hardest aspect at times. You need to make the whole sequence work. It is easy to focus on one aspect.

Forecasting is not too difficult. Basically you find out how many are talking about it and make a certain percentage more. While it is not likely that everyone talking about it will buy at a shop or order, it is possible. Social media outlets, review boards, forums, and blogs help with this a lot. My boss and I both do that since no one person can catch everything.

With pricing, some of it is out of our control. Tobacco costs a certain amout, same with bands (most people do not realize something that small factors in), boxes, seals (yes, even that one sticker), the factory and so on. After that is done, you figure out how much it is a stick. What I do to predict (at least online) is find a state tax (usually higher than average) and add that, plus a markup a store would at the price we feel is the appropriate amount of profit margin to sell wholesale. Determining wholesale is to pay us, expand the company, and replenish. The reason I add the other things to the online store is the fact that we want people smoking in stores and we do not want to undercut those stores. On top of that the extra money used goes into marketing and production as a means of getting into more stores so people can go to a local B&M.

If one has a single line (like a name, for instance Romeo y Julieta) and wants to produce a new blend, it is usually done yearly or every other year. Sometimes it is not for some established brands that sell no matter what. That takes years to get to though and rarely does one get that. Also, some (myself included) look for something that has what the other is missing. Like I love the Cremo Classic, but I am a huge maduro fan, so I want some of those elements (same with my boss), so we look into that. We see what people want. That is the biggest factor. Do people want a maduro? If not, then what?

Getting tobaccos can be easy depending on what source you use, and what they know. Sometimes... it can be a royal pain in the ass. Factories want a minimum order usually. That is if it is in production though. Though some sellers will not just sell a half a bail, but a minimum of ten. Then you have to figure out how to use that. Many are nice though if you are starting a new blend since they want their tobacco in it. During the blending process, many things are not set in stone. You can use many different tobaccos. After that, they want their minimum. Some are picky though.

Packaging material for future production, and everything else, is factored into the price of the cigar. We also budget. While we can have a much nicer box at the current margin, and take a smaller margin to help it sell, that money might come from a previous line. If that starts waning, then there are problems, so you can never assume that will keep you afloat. Some of the money is saved for future ventures too. So, if we have $10,000 to spend on a new cigar, we won't spend the whole amount. We get everything we can for each dollar.

Now, making all of this work might sound like a headache (and it can be), but usually once you know what people want, you let the math do its own job. The cost of production determines more than a paycheck. That is key on that end (for monetary aspects). In the end though, it is the cigar. I would rather have a customer pay an extra dollar or two for a fantastic cigar, than a little less for crap while I pocket it. Because while with one you might not buy too often, the other you will only buy once. Though when making an economical stick you do not make as much per stick, try to provide the best (they have a better chance of a flaw) and have quantity. With high end ones, quality is key. At the end I (and my boss) ask "would we pay this much for this stick" and if the answer is no, we see where we can lower prices in the future as to avoid that again. Though we will change boxes, bands, or whatever before lowering the quality of that cigar. At Cremo though, we like giving the whole package.

Some people have different methods (myself included), but this is a general idea.
 
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No problem. That is one of the reasons I started this thread. Many people know certain things about cigars, like that they are aged, have a wrapper, binder and filler, and knowledge like that. All of that is good to know, but there are aspects one does not see. While this is not bad, I find many wondering. If you, or anyone you know, has any questions then send them here and I will answer them as best I can and in a timely manner.
 
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