Back Like Kotter

On September 15, 2008, I wrote an Open Letter to Our Customers in which I shared what I was feeling the night before I drove into Galveston, Texas to find out how Hurricane Ike had impacted our business. I remember that as I sat in my room writing the letter, I was hoping for the best, but expecting the worst. Being unsure of what I would find, my mind drifted from contemplation of the possible loss to a deeper reflection on how the business came to be and on the significance it had on my life over the prior three years.

I drove to Galveston the next day, but it took me almost a week to compose my thoughts on what I found there. After The Storm is the raw account of my first few hours on the island. It was written, almost entirely, on the back of a mud-stained piece of trash as I sat under a generator-powered drop light in Texas City after 20 hours of the most filthy, exhausting and emotionally draining labor you can imagine.

Almost a month later, after a period of frenetic recovery efforts I posted Don't Call It a Comeback to update our customers on our status and to answer the frequently asked question: "Are you going to re-open." At the time, the answer was 'indefinite'. In this update, I mentioned that one of our key considerations was the economic environment on the island after the storm.

After five months of further consideration and analysis, we answered the question in our post One Chapter Closes and Another Opens. The political and economic realities of post-Ike Galveston made any hope of a short-term recovery almost impossible. Even though my prior partner ultimately made the decision to pursue a separate venture almost a year later, I believe that, as difficult as the decision not to return to Galveston was to make, it was the prudent course.

The fifteen months that followed Hurricane Ike have been tough for the entire industry. As I wrote in Hold Manufacturers and Tobacconists Accountable, Parenting 101 vs. The Nanny State, Village Idiot Proofing Your Right to Smoke and Points of Differentiation and the Future of the Cigar Industry I shared my perspective on the phalanx of anti-tobacco jihadists and other challenges that have made the business environment almost too risky to pursue a recovery, even outside of Galveston.

However, as the song says, "...the names have all changed since you hung around, but those dreams have remained and they're turned around." As I wrote in February, I have found The Brotherhood of the Leaf to be as strong and viable as ever and despite looming smoking bans and state tobacco tax increases, Texas is still one of the two best states for the cigar business. So...beginning in January 2010, Hava Cigar is back in business. Don't call it a comeback, because we've been here for years!

...more to follow.

The Chief

Chief Hava's Top Cigars of 2009

Every blog on the web and most mainstream publications will publish one type of list, or another, over the next few weeks. Each will be a compilation of their take on the year’s best and worst and every one of them will have one thing in common…people will inevitably disagree with them.

These lists will include selections, or exclude them, and readers will lambast the author for it. So, I’m going to make this simple. This is MY list. I’ve put a lot of thought into it, but it has only one purpose....to share a list of the ten cigars I have most enjoyed in 2009. Here they are:

#10. La Flor Dominicana Double Ligero Natural DL-660 (4 ¾ x 60)

#9. Tatuaje Pork Chop (4 x 46)

#8. Nestor Miranda Special Selection Ruky (5 5/8 x 48 x 52)

#7. Oliva Serie V Double Robusto (5 x 54)

#6. Don Pepin Garcia My Father Le Bijou 1922 Petit Robusto (4 ½ x 50)

#5. Camacho Cajones Liga 3-1 (5 x 56)

#4. Zino Crown Series Emperor Edition 2009 (5 x 58)

#3. illusione ~mj12~ (6 x 54)

#2. Nestor Miranda 20th Anniversary Danno Oscuro (7 x 56)

#1. Padron Family Reserve No. 45 Maduro (6 x52)

Honorable Mention

-Ashton Aged Maduro No. 56 (6 x 56)

-La Flor Dominicana Habano Perfecto (5 5/8 x 54)
-Padilla Dominus Double Robusto (5 x 54)

-Man O’ War Ruination Robusto No. 1 (5 x 54)

Honorable Mentions (Afterthoughts and Peer Pressured)

-AJ Fernandez San Materno (6 x 52?)

-Gran Habano San Andreas Maduro (6 x 52?)

-Hoya de Monterrey Petite Robusto (102 x 19.84 mm)

-Montecristo Edmundo (135 x 20.69mm)

Notes: While I have smoked copious amounts of cigars this year, there may be a few cigars of note that I have not tried. The Zino Embassy Selection Perfecto is a good example of this. That said, I smoked every cigar on this list at least three times, and in a few cases sampled over a hundred (just to make sure). No cigar was excluded from consideration. Why no Cubans? Well, most just aren't in my 'wheelhouse' from a quality, flavor and size perspective.

So, there you have it. If you haven't tried these cigars, I would encourage you to do so. Every cigar on this list is 'box worthy', in my opinion. Disagree? Leave a comment. Did I miss one of your favorites? Leave a comment.

...and here is to discovering what the Top 10 cigars of 2010 are going to be.

The Chief

Points of Differentiation and the Future of the Cigar Industry

The success of Hava Cigar Shop and Lounge, natural disasters notwithstanding, is almost entirely attributable to the development of relationships with customers and the delivery of an unparalleled customer experience to customers, new and old alike.

I imagine that this pattern holds in almost any customer-facing business endeavor, but it is most certainly true in a retail environment where the product you sell is widely available and is either commoditized or is an elastic luxury good. Personally, I use customer service as a choice determinant in almost every consumer decision.

Having established this, I find myself in a state of continuous amazement when it comes to the generally poor level of customer service to be found in many of the brick-and-mortar cigar stores.

It is appropriate, at this point, to make at least one disclaimer: most cigar stores do a fairly good job of delivering an acceptable experience to established, and well known, ‘regular’ customers. However, for me, this is not an appropriate standard by which to evaluate service. While the retention of established customers is critical to the success of any business, growth and profitability depend on the acquisition and development of new customers. In fact, while the online and catalog businesses are growing and thriving in this digital age, the entire premium cigar business may well depend, in the long run, on a profitable and service-focused network of local tobacconists for its survival.

While the regulatory environment is certainly a risk that all tobacco related businesses share, the greatest risks to the local brick-and-mortar cigar shop are poor service and strategic dissonance.

My evaluation of the poor state of service, while based largely on my own experiences, has been continuously supported by discussions with fellow Brothers of the Leaf. There are general themes: insufficient lounge space, high membership fees, limited product selection and price, but the most common, and unforgiveable, complaints are in regard to inattentive and disinterested staff who do not possess, or are unwilling to share, product knowledge.

With a few exceptions, I have found two kinds of cigar shops where this is a pervasive issue. The most common are those shops that that are owned by a burned-out, and/or dispassionate, retailer (often a second-generation family owner), but also those shops that are owned by wealthy an absentee cigar enthusiast who leaves the day-to-day operation to under-paid, under-trained employees with no stake in the long-term success of the business.

On the point of strategic dissonance, I find that many established cigar shops are stuck in an old, tired and dysfunctional model that is failing to meet the needs of today’s premium cigar consumer.

Arthur Zaretzky, founder of Famous Smoke Shop, said as much in a recent interview with CigarCyclopedia.com, ‘There will be a raison d’etre for cigar stores to stay in existence and the cigar store of the future, I think, is going to be more of a club/hang-out environment, and much of the revenue is going to be derived from membership fees and the smart retailers will survive and many other retailers will not survive.’

In the CigarCyclopedia.com interview, Roundtable: The Future of Stores, Keith Meyer, of Cigars International, shared a similar sentiment, ‘…the brick-and-mortar retailer has a real advantage, though, in making his place a destination.…you’re competing on ambiance, you’re creating an atmosphere that draws people into your store, you create points of differentiation and we’re a retailer, too, and I know this.’

In my experience, most of the established stores are doing little, if anything, to create these ‘points of differentiation’. Instead, what most premium cigar consumers will frequently find in their local markets are one-of-two types of business models.

Most commonly, you will find the outdated ‘mall model’ store. This is often a well-established chain of stores that, at one time, began in a shopping mall, and have since moved into multiple ‘strip mall’ locations. However, while the location has changed, the approach has not. These stores are dominated by multiple displays of various gifts ranging from backgammon sets to the Hummels, those cute little porcelain figurines that your grand-mother has collected since 1935.

If you are lucky, you will find, tucked into the back of these stores, a small, cramped and poorly ventilated smoking area that features a few leather chairs and an ashtray. These stores have clearly ‘missed the boat’ in terms of providing the atmosphere and environment that Zaretzky and Meyer were referring to in their interview.

In larger markets, you may also find a fancy-shmancy ‘country club model’ store. This type of store is characterized by the humongous humidor filled with every $25 cigar on the market, glass displays filled with $1,000 Gucci-Fachi gifts and accessories and well appointed lounges, sparsely occupied by your local Rockefeller and Trump types who were willing to pay $1,500/year to ash on the $5,000 imported Oriental rug. Unless you live in New York City, Chicago or Los Angeles…these stores have priced the majority of their customer base out of most of their ‘points of differentiation’.

Most certainly, a few retailers will read this entry and recognize their own business. These retailers may choose to dismiss my observations as the rant of an impossibly-hard-to-please customer and choose to ‘stay the course’.

It is my sincere hope, however, that these retailers will choose instead to re-evaluate opportunities to deliver more ‘points of differentiation’ by improving their customer experience, and making the investments necessary to evolve their business model.

The future of the premium cigar industry depends on it.

The Tobacconist Handbook

The Tobacconist Handbook, is finally here.

Jorge L. Armenteros, CMT, founder and President of Tobacconist University, and his team, have completed their multi-year effort to compile and publish the academic curriculum from TobacconistUniversity.org.

TU, the 'ultimate educational and certification organization for the luxury tobacco industry', has made great progress in their effort to set standards, educate and certify tobacco consumers, retailers and the industry's sales forces in the last few years. Publishing the Tobacconist Handbook will surely accelerate that effort, and its benefits to the industry, by publishing this source reference document. To my knowledge, it is the most thorough and rounded publication of its type on the subject.

Be sure to pick up your copy from Amazon.com, where it is currently available for purchase ($48.49).

Desperately Seeking Cigars?

It happens every year.

I make my annual pilgrimage to the Mecca of cigars, the International Premium Cigar and Pipe Retailers (IPCPR) Trade Show and Convention, and despite coming back with enough cigars to fill two humidors, I am left wanting more.

While, this year, many of the vendors chose to release their new blends/brands before the show, there were still a number of exciting new releases to be found on the convention floor. Among them, was the new My Father Le Bijou 1922 from Garcia y Garcia. This cigar was one of the samples I picked up on the first day of the show, and I spent the remainder of the week wishing I had more.

I imagine that many of my fellow Brothers of the Leaf are finding themselves in the same position having spent hours, during and since the show, following Twitter updates from the floor, reading daily blog summaries and recaps and watching video coverage of the manufacturers talking about the dozens of new, rare and limited cigars. So, instead of attempting yet another re-cap, I wanted to let you know about one of the most unique and useful pieces of knowledge that I took away from the show: a new site called ISOCigars.com (http://isocigars.com/).

ISOCigars.com, or In Search of Cigars, is the simple, but brilliant back-of-the-envelope brain child of Jason English, Louis Maione and Stephen Lahti. I met these guys at the Twitter Brother of the Leaf Cocktail Hour, and within a few minutes they had described how it works.

The concept is simple: Register, add ISO cigars to your private account and then sit-back and wait for participating retailers to respond with an offer to fill your order for a Single, a 3 Pack, a 5 Pack or a Box of your ISO cigar. You can accept, or reject, the offer in search of the best deal. Simple.

As a retailer, I think this is a great way for brick and mortar stores to broaden their customer base and mail order business without having to build and manage an entire web presence. As a consumer, I like the idea of being able to support the little guy, while being able to find cigars not available at my local tobacconist.

I still have a few questions, however. I am not sure if I can simply reject an offer, or make a counter-offer. I'm not sure how the order is fulfilled, direct with the B&M or through the site. I see the Hot Deals! section getting a little crowded out by unsolicited offer-spam, which seems to me to be in opposition to the core idea of the model.

I'll be sure to update this entry with the answers to these questions, and provide additional insight when I am sitting in the Man Cave enjoying my next My Father Le Bijou 1922 Petit Robusto.

First Annual Twitter BOTL Cocktail Hour

First 25 to RSVP and confirm that they will be attending the event at Dos Jefe's Uptown Cigar Bar in New Orleans on August 11th (via Twitter @ChiefHava) will receive a 5-Pack of 2009 New Release cigars including:

Cain by Oliva

La Traviata by CAO

Room101 by Camacho

Cubao Maduro by Espinosa y Ortega

Nosotros by Illusione (May substitute based on availability of the Nosotros)

Special thanks to Stogie Review's @JCruz, @JoseFloresJr and all the sponsors who donated cigars.

Village Idiot Proofing Your Right to Smoke

In case you missed it, Galveston’s village idiot, Tarris L. Woods, sealed the fate of my prior partner’s Hurricane Ike recovery efforts when he strong-armed the Mayor, and two fellow councilwomen, to remove the retail tobacco store exemption from the city’s new indoor smoking ban ordinance.

Charlie Head, and his new partner James Warnell, were in the process of launching their new business, Havana Alley Cigar Shop and Lounge, in the former location of Hava Cigar Shop and Lounge at 415 21st Street in Galveston, Texas. Having completed a significant portion of the licensing and design work in preparation for a September 1, 2009 launch, they were well on their way to re-establishing the island’s sole tobacconist presence when the rumors of a push to revive an indoor smoking ban arose in June.

In a surprising turn of events, the new ban, while similar to the ordinance that had failed in 2006 due to the efforts of an engaged citizenry and business community, was being actively sought and promoted by many of the same restraurateurs that had fought to defeat it two years earlier. In the daunting shadow if an imminent statewide smoking ban, the Smoke Free Texas Act, these businessmen had re-built their facilities and re-opened post-Ike as non-smoking establishments.

When the statewide ban failed in the Texas Legislature, these businessmen found themselves at a competitive disadvantage of their own making, as diners were leaving to enjoy their high-margin post-meal cocktails and smokes in nearby bars. Acting in their own narrow self-interest, these businessmen influenced the pro-business Mayor, Lyda Ann Thomas, to re-introduce the indoor smoking ban ordinance, and gave her strict guidance to ensure that the final ordinance did not leave any loopholes open, such as ‘private club’ exemptions.

The original draft of the new smoking ban ordinance was drafted in a manner that ensured that these loop-holes would be closed, but provided an extremely narrow exemption for retail tobacco stores. This exemption required that the retail tobacco store maintain 90% tobacco sales, disallowed the on-premise consumption of BYO alcohol and contained a vague prohibition against the ‘infiltration of smoke’ to its neighbors if it were not free-standing.

Having run a profitable retail tobacco store in Galveston, I can tell you that any one of these three requirements would have been a ‘deal-breaker’ for Havana Alley Shop and Lounge which, like Hava Cigar before it, was built on a private membership model and lounge concept that depended on its location and the ability for those members to store and consume alcohol in the lounge. Despite these limitations, Mr. Head and Mr. Warnell pushed forward. They sought, and received a verbal commitment that these restrictions would be revised to allow for the profitable operation of their new business.

On the night of the vote, the council’s discussions specifically referred to the appropriateness of this exemption for an adults-only retail outlet that sold tobacco, however Councilman Tarris Woods threatened to derail the entire effort if the exemption were not removed using the false logic of an analogy that the sampling of tobacco products in a tobacco store was no more protected than the sampling of liquor in a liquor store. The Mayor, and two other Councilwoman, conceded and, in quick order, passed the most restrictive indoor smoking ban ordinance in the entire State of Texas. The fate of Mr. Head’s new business venture was thus sealed.

The moral to the story: if it can happen in Galveston, Texas…it can happen where you live as well. After all, this isn’t California. This is Texas. A few years ago, during the debate surrounding the previous ordinance, I would have bet any amount of money that there was absolutely no chance that a Texas city would pass an ordinance banning smoking within a retail tobacco store that did not sell alcohol. Clearly, I ‘mis-underestimated’ the power of a single uninformed politician to lead an eager anti-smoking nanny-state influenced municipal government body too far down the path.

I cannot appropriately describe to you how angry this has made me. It is no longer thoretical, and I have had enough. I have long engaged in the debate against smoking bans, while subconsciously withholding my efforts in the battle against forced bans in bars and restaurants. After all, the Texas Restaurant Association, seeing isolated municipal bans push their customers into suburban cities without bans, had themselves become the promoters of a statewide ban. While the hybrid ‘cigar bar’ became the new ‘front line’, I felt, incorrectly, that I did not have any business interest in that specific debate, so long as the well established retail tobacco store ‘firewall’ remained. Clearly I was wrong.

So what now? In my mind, the era of our reactive defensive posturing has come to an end. We can no longer afford to depend on the assumption that these bans will stop short of banning smoking in our retail tobacco businesses. Instead, we must adopt and pursue the offensive strategy of securing legislative guarantees at the local, state and federal level in order to preserve the rights of our consumers to consume tobacco within the confines of the businesses in which this legal product is sold.

Jorge Luis Armenteros, CMT, President & Founder, Tobacconist University has been a leader in this area for more than a year, promoting his concept of a Tobacconist Preservation Act (TPA). This law, if enacted, would provide us the legal protection and ensure the stability of our industry by preventing subordinate government entities from passing bans that ban smoking within our stores. While I appreciate the flowery language celebrating the history of our profession within Mr. Armenteros' TPA, I prefer a much simpler and straightforward approach. I am by no means an attorney, but I would prefer legislation to this affect:

Whereas the primary business of a tobacco wholesaler or retailer is to sell tobacco and tobacco related accessories, the right to legally consume that product within the confines of retail tobacco stores shall not be infringed upon by indoor smoking bans. Any business which derives 51%, or more, of their revenue from the sale of tobacco, or tobacco related accessories and/or is licensed as a tobacco wholesaler, or retailer, shall be exempt from any ban on smoking within their business, or its attached outdoor smoking areas.

In the words of Sir Winston Churchill:

‘The era of procrastination, of half-measures, of soothing and baffling expedients, of delays, is coming to its close. In its place we are entering a period of consequences.’


I strongly encourage the International Premium Cigar and Pipe Retailers Association (IPCPR), the Texas Cigar Merchants Association (TxCMA) and the Cigar Rights of America (CRA) organization to adopt this offensive posture and utilize its resources, and the efforts of its constituency, to aggressively pursue these protections. If we fail to act, you may well find yourself trying to comprehend the implications of the actions of your own village idiot.

Video of the Galveston City Council Meeting in which the ban was passed:

Part 1 http://bit.ly/bQG7j

Part 2 http://bit.ly/LQQgp