The latest stories on El Artista brands and factory.


BLOOMBERG

Caribbean Cigar Makers Turn to the European and Chinese Markets

Radhames Rodriguez is using a rare tobacco and special wrapper to roll 50,000 of his new premium cigars, the Pulita, in the Dominican Republic. U.S. aficionados shouldn’t get their hopes up though — the limited-edition cigar won’t be on sale anywhere near them.

Named after Rodriguez’s grandfather, who started the business sixty years ago, the Pulita will only be marketed in Europe. That’s because Rodriguez can’t face the headache and cost of complying with the U.S. Food and Drug Administration’s new tobacco regulations.

“It just costs too much and takes too much time,” said Rodriguez, vice president of Tabacalera El Artista. “We’re going to focus on the German and Italian markets instead.”

Since August last year, every time Artista or other cigar makers introduce a new product, they must gain approval from U.S. authorities at the cost of tens of thousands of dollars or more. The result? Business is down by a third this year at the El Artista factory in the fertile Cibao Valley, one of the world’s largest premium and limited-edition cigar makers.

Across the Caribbean country, producers are grappling with FDA regulations. Some are temporarily cutting production in hopes President Donald Trump’s administration will rescind the rules. Others are spurning the U.S. entirely, choosing to sell their new specialty products in Europe and Asia, where China is set to overtake the U.S. as the world’s largest consumer of cigars.

’Forbidden fruit’

Rodriguez said he would have to pay for approval for each of the five sizes of the Pulita he had planned on producing.

“We would price ourselves out of the market in the U.S.,” Rodriguez said.

Typically more than a thousand special editions or new releases are introduced each year, though they make up only a fraction of the 315 million premium cigars produced annually. They are often sought after by aficionados for their unique taste and commemorative value.

“The FDA regulations are creating a situation in which these new, exciting cigars won’t be available in the U.S.,” said Hendrik Kelner, president of the Association of Dominican Cigar Manufacturers, and vice chairman of Tabadom Holding Inc., which produces Davidoff brand cigars. Regulators are creating a new “forbidden fruit” for U.S. smokers similar to Cuban cigars.

The FDA included premium cigars when it decided to review regulations for tobacco products, including hookahs and e-cigarettes, for health reasons. In late July, the agency said it would review scientific data and consumption patterns related to premium cigars.

‘Other markets’

Still, the number of cigars introduced at the International Premium Cigar & Pipe Retailers trade show in Las Vegas in July was down about 30 percent compared with last year, according to the cigar publication Halfwheel, the term for a bundle of cigars.

Sales in the U.S., forecast to reach about $7.9 billion this year, are projected to grow by less than 2 percent a year through 2021, off from the double-digit growth the industry had seen in previous years, according to Euromonitor International. Meanwhile, the Chinese market is expected to grow from $7.9 billion this year to $11 billion in 2021.

“The future of the premium cigar industry in the U.S. is uncertain,” Rodriguez said. “So we’re going to keep working hard on other markets where we’re not under such a big threat.”

LINK: https://www.bloomberg.com/news/articles/2017-08-10/caribbean-s-forbidden-fruit-turns-to-europe-china-for-a-market

 


TOBACCONIST

PERFECTING THE ART OF FAMILY OWNERSHIP

Tabacalera El Artista promoting two new cigars in U.S. market

By William C. Nelson

Tabacalera El Artista, of Tamboril, Dominican Republic, has been a force in the cigar business for many years, though a lot of American consumers might not realize it. The company’s history is characterized primarily by behind-the-scenes operating. Known to industry people in the States simply as El Artista (“the artist”), this vertically integrated, family-owned firm, established in 1956, is contracted to produce dozens of brands offered in markets worldwide. In fact, about 85 percent of the company’s annual output of 4 million to 5 million premium cigars ships under private labels. The remaining 15 percent carries the El Artista brand.

VIC_1849.webOsvaldo Rodriguez, president of El Artista,
and Radhames “Ram” Rodriguez, vice president 

Under its own name, El Artista is perhaps best known for its Exactus line, featuring blends and vitolas ranging from the conventional up to the gargantuan $50 11 x 90 ring gauge Exactus Super Coloso. More recently, however, El Artista has been re-emphasizing its U.S. footprint with two new offerings: the Big Papi, developed in cooperation with Dominican-born baseball superstar David Ortiz and first brought to market in October 2016, and the Pulita, the company’s 60th anniversary cigar, re-creating one of El Artista’s original blends, which debuted at the 2016 IPCPR trade show.

The Big Papi was named for Ortiz, the retired all-star hitter in Major League Baseball who hails from Santo Domingo, Dominican Republic, and is himself nicknamed Big Papi. Kevin Newman, El Artista public relations manager, says, “In 2012 the El Artista team met with David Ortiz and found out he wanted a good cigar to give away at his charity events—a cigar that would have broad appeal, an approachable blend, not too strong.” Newman says El Artista and Ortiz agreed on a price, and the company began providing the baseball star about 1,000 cigars per month. “This went on for a couple of years,” Newman says, “and then in 2015 Ortiz came back to us and said he was retiring from baseball. And he indicated an interest in taking the Big Papi cigar commercial.”

Newman points out that bringing any new cigar to the consumer market is “a complicated proposition.” He says, “You have to know what it’s going to cost to make, to distribute, and with a lot of celebrity cigars you have to build in the cost of the celebrity as well.” But Ortiz proved easy enough to deal with that the cigar was kept affordable. “And,” says Newman, “he didn’t want the cigar changed in any way from those he had been receiving. So El Artista agreed to take a bit of a cut on their profit margin to make the deal work, and the public has responded very favorably.” It bears mentioning as well that reviewers have been making kind tasting notes about this 6 x 54 Toro. “It smokes fantastic,” says Newman. “It’s one of the best cigars I’ve ever smoked. And it’s down the middle in terms of both flavor profile and price.” Newman adds, “The Big Papi is just the kind of cigar you can recommend to a guy you don’t know, walking in off the street looking for a cigar. He is not going to be disappointed with the Big Papi. No one is.”

DSC01174.webAs for the Pulita, this is a cigar produced in celebration of El Artista’s 60th anniversary, “made with six different tobaccos—five countries in one cigar—to the specifications of the original cigar developed by company founder Ramon A. Rodriguez, who was known as Don Pulita,” Newman says. “So this cigar is named after him, and it is based on an old blend that he used back in the 1950s,” including Negrito wrapper leaf. Negrito has a reputation for being somewhat difficult to work with, and the result is that consumers today do not often encounter it. Even the El Artista factory, with its roots deeply thrust into fields of Negrito leaf, began over the years to phase out its use. “But we brought it back for the Pulita, to celebrate our oldest company traditions after 60 years in the business,” Newman says. The Pulita is available as a 5 x 50 Robusto and a 6 x 54 Toro.

Company Vice President Radhames “Ram” Rodriguez, who at just 26 years old represents the third generation of management in his family’s enterprise, says, “We have been very gratified by the attention these new products are receiving. But we knew customers would love them. All of our products are made with passion and heart and intensive quality control.” Rodriguez says the new cigars have already been placed in 250 to 300 stores in the U.S. “We are doing especially well in New England and Florida,” he says. “Other areas where we are doing well include Tennessee, California, New York, New Jersey and Pennsylvania.”

It is encouraging to find a company like El Artista confidently forging ahead with U.S. market plans despite the uncertainties of the present day. Rodriguez didn’t have to offer these beautiful new products to American consumers. He keeps at least 60 rollers busy (100 rollers during peak production) creating cigars for diverse markets spanning the globe—mostly in countries that do not present the regulatory obstacles being hoisted in the States. And he cultivates nearly 2,000 acres of tobacco on his own farms in the Dominican Republic and Ecuador to feed his operation a steady supply of delicious leaf. (El Artista derives an even larger share of revenue from its leaf brokering business than from cigar production.) Rodriguez says his company has the advantage of some protection from the vagaries of U.S. regulation just on account of the firm’s diversity. “The bulk of the company’s business is with established private labels spread over the world, so El Artista is insulated to some extent from regulatory problems,” he says. “We are of course developing prudent strategies to work within the regulations that do affect us. We believe if people get their information together and submit their applications on time that in most cases new governmental problems can be dealt with.”

DSC02054.web

The question remains: Why do it? Why go out on a limb with new introductions at a time when the entire U.S. market seems to be waiting with bated breath for the next regulatory shoe to drop? Love of the business, mainly, and desire to contribute something interesting to the industry. Newman says he observes that sentiment every day in the Rodriguez family. “These folks don’t have to do any of this consumer stuff. They are set, just producing private labels on contract for other companies,” Newman adds. “But for a guy like Ram Rodriguez, the pleasure of bringing to U.S. consumers something they have never smoked before is its own reward. Ram is a very young man for a cigar executive, so right off the bat he is not your typical cigar guy. And he just exudes humility. He really wants to be known for making good products, and that attitude immediately comes across. People fall in love, first with Ram, then with the company and then with the cigars.” Newman says that crafting cigars is an art, and so, too, is nurturing the fortunes of a 61-year-old family firm. As he puts it, “The Rodriguezes truly exemplify the art of family ownership.”

Readers wishing to add some El Artista cigars to their shelves can explore the company’s history and products at elartistacigars.com.

LINK: http://www.tobacconistmagazine.com/perfecting-the-art-of-family-ownership/





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