Industry Perspectives: Interview with Nick Perdomo Part I

Industry Perspectives: Interview with Nick Perdomo Part I

Photo By: Patrick Lagreid of the Examiner.com

Not to long ago we got to sit down with Nick Perdomo of Perdomo Cigars and talk to him about his company, future plans, and how he likes to help the average consumer. We also talked with him a bit about his upcoming special project. The following is part I of our interview with Nick Perdomo and we will be running our second part tomorrow.

Cigar Brief (CB):  What do you see the role of your company being in the current marketplace?

Nick Perdomo:  Well, our role is very unique in the sense that we’re the only company in the industry that absorbed the SCHIP tax.  So we came out with something that’s totally unique.  It was very punitive for us because we had to absorb that tax and it cost the company several millions of dollars every year.  We’re the only company in the industry that never passed it on to the consumer.  And as a matter of fact, for the last 20 years, our company has only had three price increases in 20 years, unlike most companies who have had 20 increases over the last 20 years.

 So I think our role is unique in that we offer a really high value cigar at a great value at its price.  If we would have passed on that tax, our cigars would be like everybody else’s, between $40.00 and $50.00 more a box, and I think our consumers appreciate it, I think our retailers appreciate it.  And what’s happened with us is we’ve garnered a tremendous amount of market share throughout the country, and our brands have always been respected but now more and more people are being able to enjoy Perdomo cigars because of our price points.

CB: How do your lines of cigars fit into the current marketplace?

Nick Perdomo:  Well, what we try to do is we try to make cigars for what our customers are asking for. For instance we were one of the first, I think, that came out with the big gauge cigars, 54s, 56s and 60s, because our consumers have asked us for it.  And I’m the type of guy that when I get emails or when customers call me or fax me or anything, I reply back to them and I take their input seriously.  They’re the most important thing around, you know, as far as I’m concerned.

What’s also unique about us is we offer pretty much the whole gamut, from medium-bodied cigars to full-bodied cigars, but even our medium-bodied cigars are really enjoyed even by people that like very mild cigars, because the truth of the matter is well fermented tobacco has flavor not harshness.

So I think people appreciate that, and we’re unique in the sense that we offer three different wrappers in every cigar we make, precisely to try to hit every flavor characteristic for someone to like.  For example, if you smoke one of our Connecticut cigars, they’re gonna have a creamy finish with a lot of flavor.  Cuban Seed wrapped cigars or Corojo or our natural grown are gonna have a little bit of spice, and a real earthy finish.  And finally our Maduros are gonna be sweet with a lot of flavor.  So everybody gets a little bit of everything when they buy one of our products.

And, for example, if someone likes the 10th Anniversary and he loves the Champagne, and he really loves that blend, he can always stay within the brand mark because we offer different wrappers.  So it makes us a little unique from others that we can offer that.  And we really try to hit every gamut of flavor that we possibly can.

CB:   Awesome.  Speaking of special, let’s talk about vertical integration.  You guys are one of the few that are fully vertically integrated.  Can you explain that to our audience?

 Nick Perdomo:   Well, the most important thing about vertical integration is to be able to control your own destiny and be able to control your quality.  The reason we’re known as a quality product is because we exactly do that, and what we mean by vertical integration is Perdomo does everything from picking its own seed all the way to the seller.  We manufacture all our own boxes, we make all our own emulsions, we make our own stains, we make all our own cellophane tubes.  We grow and harvest tobacco. In fact 98 percent of our tobacco is grown by our family.

We manufacture every single cigar that has our name brand on it, which his very unique.  We’re not a middleman, we’re a true manufacturer that does everything.  We have our on agronomy department.  We do our own sorting and selecting and fermentation.  We have our own curing barns, and we have over 500,000 square feet of building on our compound to show that.  And when our customers come down for tours, they get to see that.  It’s very unique, they’re not seeing just a rolling room, they’re seeing packaging, sorting, selecting, fermentation, agronomy, growing, everything, farming – And we’re one of the largest growers of Cuban Seed tobacco in all of Central America.

CB:   Is there anything you don’t do in the vertical integration?

 Nick Perdomo:  We don’t make the cigar bands.  And we don’t make the hinges and clasps.  But we do make our own silk screens and we can silk screen up to seven different colors on any of our brands.  So we pretty much do everything.  And I think it’s very important – it’s not necessarily a cost saving thing, because quality costs.  So, for example, when we grow tobacco a lot of the leaves we discard, if you bought that tobacco it would be put in a bail, and we grow basically for what our factory needs. 

And we have a tremendous amount of inventory of not only finished cigars, but we have over eight million cigars in our inventory in Nicaragua at all times. There is also tens of thousands of bails of filler, binder and wrappers, so we can always have a consistent product and a consistent blend with every cigar that we make

CB:    Now speaking of product, a current trend in the market is to create Limited Editions or short runs. How do you feel about these types of product?

Nick Perdomo:    I think it’s a nice selling point for somebody who wants to do that.  We definitely have special tobaccos that we come out with and certain special crops.  For example, our Estate selection Vintage 91, people got very angry when we stopped selling that brand, well, the reason we stopped selling it is ’cause we ran out of that tobacco.  So if you read anything on a vintage series with Perdomo, it’s truly the year that we grew that tobacco.

 As far as limited editions go, we don’t have anything really onboard that we’re really thinking of, but we do have our new Perdomo Commemorativa which commemorates our 20th anniversary.  Even though our 20th anniversary, believe it or not, was August, the cigars have been finished unfortunately for about nine months.  We were planning on bringing them out to the trade show but we have a special package that we’re going to put these cigars in and our band maker in Holland has been working feverishly on it for the last six months and still they don’t have it finished.  So we’re actually waiting for cigar bands, everything is done.  But that’s gonna be a truly special cigar.

and also what’s truly special is it’s gonna retail between $7.00 and $8.99.  I am going to continue the mantra of keeping all Perdomo cigars under $10.00.  I want to give a lot of value and bang for the buck for our consumers.  With a tough economy right now and people hurting, I think it’s paramount that we not only continue garnering more market share but that we do give a lot of bang for the buck to our consumers, and a lot of people are really, you know, not only thanking us but are smoking more and more Perdomo cigars because it’s a very affordable cigar and they’re shocked when they smoke the cigars of the quality it is, because they are, they’re getting top quality and I think it’s – you know, in my humble opinion, it’s the best cigar you can buy regardless of price point.  So I think that’s important!

***That ends part I of our interview with Nick, but stay tuned on Friday for part II of our interview series with Nick Perdomo

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