Cigar Weekly Interview with Jeff Wingate
1998 -- Located in the mountains of Colorado, Quintin USA, Inc was formed in 1968 to import clove cigarettes. Quintin began with the exclusive US rights to distribute Gudang Garam clove cigarettes from Indonesia. (See www.quintin.com/clove.html for more about clove cigars.) Quintin expanded it's line over time to include Terong, Kuta and Bima brands of clove cigarettes.
After almost thirty years in the tobacco distribution business, a logical extension for Quintin was to expand into premium cigars. In February 1997, Quintin launched the Q'Oro line of premium cigars with five differing blends:
Miami Reserve: The filler is a blend of Dominican, Honduran, and Nicaraguan tobacco; the binder is from Ecuador, and; the wrapper is US Connecticut Shade or Ecuadorian.
Dominican Republic: A puro containing Dominican filler, binder and wrapper.
Honduras: The filler is a blend of Dominican and Nicaraguan tobacco; the binder is from Mexico, and; the wrapper is Ecuadorian grown Connecticut seed.
Nicaragua: A puro containing Nicaraguan filler, binder and wrapper.
Mexico: A puro containing Mexican filler, binder and wrapper.
Cigar Weekly: Do you have anything new coming down the pike?
Jeff Wingate, Quintin: We are still negotiating with most of the major manufacturers to become a full line distributor of cigars so we can be a top line distributor of all the brands. At this point in time, we are currently direct distributors for General Cigar, Villazon, Lane Limited and Lignum-2. We are currently in negotiations with Swisher, Consolidated and with the J.C. Newman Company.
CW: That will get you most of the top 50 brands.
JW: Sure will. That is the only thing new on the horizon. In addition to our own line of hand rolled premium cigars, Q Oro, we wanted to expand the cigars we carried. We want to be a full line distributor of brands like Partagas, Dunhill, Don Diego and H. Upmann. And Arturo Fuente, if their supply ever catches up with demand.
CW: Or the demand slows up?
JW: Well, we hope the demand never slows up.
CW: What do you do to market the Q Oro line?
JW: Right now our marketing has been primarily in house with a telemarketing sales staff. We've done a limited number of interviews. We've had a couple of lines reviewed by SMOKE magazine. And Diane Kane, our Director of Marketing, has been working with some other publications, both regional and national, to get the brands reviewed, as well. A little bit of direct mail campaign, but that is primarily it. We feel that it is best to build a brand from the ground floor up, getting some brand loyalty through our regular customers versus what I am going to call the "shotgun" approach, which is throwing a bunch of ads into the media and hoping it produces results. I don't believe that is an effective use of advertising in the market place as it exists today.
CW: Particularly when the cost of national ads is so expensive.
JW: "Pretty expensive" is probably a good term to use.
CW: What do you feel is your biggest marketing challenge?
JW: Our biggest challenge, of course, is to build this brand of our own, the Q Oro line. We brought the line into existence in early 1997. From early 1997 and July 1997 is how long it took us to put all five lines into the marketplace. And that was the culmination of about a year's worth of effort prior to that in securing the manufactures, sampling different blends within each line to determine what we wanted quality-wise and flavor-wise, body, intensity, style, etc. of each of the cigar lines to enhance the Q Oro brand. We wanted them all to be a different style and flavor and also in price point. We feel we have accomplished this.
Starting with our Mexico line from the San Andreas Valley, all San Andreas tobacco, 100%, very full-bodied, rich flavored cigar, on up to our Miami Reserve line made for us by Nick's Cigar Company in Miami. Nick is doing a tremendous job for a small cigar manufacturer. He is certainly growing as well and we got involved with him primarily because of his reputation and the fact we thought we could grow with him. And that has certainly proved to be true.
CW: Would you tell us how many sticks you sell a year?
JW: Because we just brought the brand out in the middle of last year, we don't have an accurate number yet. But I'd say we're probably going to be in the 100,000-200,000 cigars per year range. So not a huge brand by any means. Going back to my years in the wine business, I would equate us with a boutique winery. We are a boutique cigar manufacturer. We are never going to have huge numbers. We are never going to be a million a year stick brand, but we are always going to have good quality, always have supply available to our customers. We are always going to be able to service people in the best manner possible because of the nature of our organization and how we operate.
CW: Given there are over 1,100 cigar brands, why should anyone try your cigars?
JW: I think my first statement, in answer to that, would be price/quality relationship. Value for the dollar. We feel our cigars are fairly priced for the quality they offer in comparison to what most people are looking for these days, which are the major brands, the Macanudos, Punch, Hoyo de Monterey, Dunhill, etc. If you look at the price of what your our buying those brands for in a retail shop versus what you can buy our brands for, for the quality we are offering, I think we are presenting a great value to the consumer.
CW: You seem be about half the cost.
JW: Yes, maybe half to two thirds.
CW: You have a Honduran line of cigars that doesn't have any Honduran tobacco.
JW: That was the choice of the factory and ourselves. They had Honduran tobacco available. But we looked at a number of different blends and they really felt this blend, with sourcing tobacco from outside of Honduras, but produced in their Honduras factory was the type of cigar we were looking for. That's really, I think, our mildest smoke. It's a very soft-bodied, very creamy cigar, very much designed to be a morning smoke or for some who doesn't like full-bodied cigars. That's the cigar in our line that I recommend to people, with the blend of the Nicaraguan and Dominican tobaccos and the Mexican binder and the Ecuadorian shade grown wrapper produce a real mild smoke. We sampled a bunch of the robustos a couple of weeks ago and the one consensus opinion was this is a smoke that people who enjoy Macanudos would enjoy. Macanudos, in my mind, are very mild and creamy smoke also. I can't say we are exactly like a Macanudo, but it is made in the same style.
CW: How many retail outlets are you in?
JW: In about 300-400.
CW: How much of your business is cigars versus clove cigarettes?
JW: Our cigarette business is still our core business. And probably accounts for 80-85% of our business. Our cigar line and our accessories, like our ceramic ashtrays, are probably 15-20%.
CW: How do you see that changing in the next twelve months?
JW: We would like to see cigars become a larger part of the mix. I don't think they would ever take over 50% of our volume, but if they would go to 25-30% of our volume, I think we would be very pleased.
CW: Slight off topic, do clove cigarettes have the same legal issues as regular cigarettes?
JW: No questions. Clove cigarettes are classified as a cigarette. They have the same regulations. They are taxed the same way. The only difference between clove cigarettes and regular cigarettes is that the clove cigarette has 65-75% tobacco and 25-35% ground cloves blended together. And that produces the sweet, pungent flavor and aroma. They are really regulated the same way as any 100% tobacco cigarette.
CW: Are they more popular in Southeast Asia than in the US?
JW: Actually, I think the biggest market for clove cigarettes would have to be California. They are doing quite well across the country, but overall I would say that California is the strongest market.
CW: How about Southeast Asia?
JW: Since we don't sell into Southeast Asia, we don't have any numbers. But Gudang Garam, which is our flagship line, is the number one clove cigarette worldwide. They sell over 80 billion sticks annually. Most of those are sold within Indonesia and Southeast Asia.
CW: Do you foresee any difficulty because of the current political problems in Indonesia?
JW: That is a difficult question to answer. We are in a wait and see mode right now. The factory we work with is in Suribao, which is another island, probably 300 miles from Jakarta and most of the political unrest seems to be taking place in and around Jakarta.
CW: If the Cuban embargo were lifted tomorrow, how would that impact Quintin?
JW: I think we would first see the major manufacturers that own the rights to those brands, jump in and offer those brands on the US market immediately. That's a given. I don't feel that we, as a small player in this market, would benefit at all unless we somehow would be able to acquire the rights to one of the Cuban brands. I don't believe that we, as a secondary seller of cigars, would see those lines to offer to our clients. I don't believe the major manufacturers would get enough quantity of product to satisfy the demand through their own distribution network, let alone trying to let someone like our company have some to sell.
CW: Would you try to get tobacco for one of your blends?
JW: Good question. I don't know. That is something to consider and be worth taking a look at.
CW: One of the things we keep hearing is that the average American cigar smoker probably won't like Cuban cigars. They will find the cigars too strong.
JW: I agree with you there. I have been able to sample a Cuban cigar from time to time and I agree with the consensus, that the Cuban tobacco is quite strong. And the American palate, for the most part, is probably not ready for that.
CW: You mentioned your wine background?
JW: I really feel that the cigar industry has a lot of parallels to the wine industry. If you look at the fact that cigars, along with wine, are an agricultural product. They require a certain amount of hands-on labor to produce the product. They are both, in one manner or another, fermented. They are both, in one manner or another, aged before released to market. And they are, in many respects, produced by family run operations. Most of the operations in the cigar industry are all family run operations. Save for a few multi-national corporations that control some of the big boys. A lot of the small producers out there, just as in the wine industry, are all mom and pop organizations and I think that really lends to a lot of appeal, knowing that a person's life is the production of the product.
One thing I would like to get out to your audience is that we do feel very strongly about the quality of our cigars.
CW: Thanks to Jeff Wingate for answering our questions.