Cigar Weekly

1998 -- It started out taking a break from a project, enjoying a smooth premium Dominican cigar. An idea began to form. What if a group of investors established a company to create private label premium cigars? Build a reputation as a cigar company and then establish cigar lounges across the nation, a place where the aficionado could sit back and enjoy a cigar like they do in their own backyard. Could it be done? Chuck Norris, international film and television icon, thought it could. It was his backyard.

In July 1996 Lone Wolf International was formed and the journey began. The first course of action was to approach James Belushi and a group of investors who had recently opened a chain of retail cigar lounges in California. Both Mr. Norris and Mr. Belushi had a mutual respect for one another in the entertainment industry and were excited to learn they also shared a passion for cigars. It was a natural pairing. In January 1997 operations merged and Lone Wolf became a retail tobacconist.

We spoke with Michael Dunne, Lone Wolf VP of Operations about his company and cigars.

Cigar Weekly: Michael, are you in charge of the cigar manufacturing or the retail side of the business?

Michael Dunne: Retail, manufacturing, the whole company, basically. We recently opened a restaurant in Dallas. We had separate investors go in, but I was in charge of designing the building and getting it up and running and then a separate management team took over.

CW: How much of your business is the manufacture of cigars versus the lounges and restaurants?

MD: We have a cigar store with a lounge in Santa Monica (1200 sq. foot store, 800 sq. ft. lounge) We don't serve cocktails because of the zoning regulation when we built the place. The restaurant in Dallas is a full scale club. It's 7,000 sq. ft. with a full menu, dance floor, full bar service, and we have a smoking lounge with 3 private meeting rooms. It's a full-scale facility. Santa Monica is a scaled down version.

CW: What are your plans for expansion? Are you planning to opening a chain of lounges?

MD: What we're looking at right now is to solidify the concepts. The reason I'm in Santa Monica is we're looking at putting in full coffee service, espresso machine, soft drinks, juices and high-end teas. Not to say the cigar revenue isn't good for us, but we're looking at other avenues to expand the concept, that being Lone Wolf.

CW: Is the Lone Wolf concept cigars or lifestyle?

MD: Obviously, we want to create a concept of lifestyle. We started out with the cigars and we wanted to put a quality product forth and I think we've done that. We have to get our distribution end down and then we'll look at more lounges and stores. The smoking lounges will help expand the name brand recognition. Once we do that then we can start adding things on. I look at Davidoff and what they have done. It's fantastic. The cigars is how it all started and their cologne "Cool Winter" was the #1 cologne for 2 years running. They've taken a concept: name brand recognition, quality, lifestyle, etc. and now when you think of Davidoff, you think of quality. We are really in our infancy as far as the concept is concerned.

CW: I know that some cigar smokers are cautious when it comes to celebrity cigars. Has having celebrity owners helped you or hurt you in that respect?

MD: I feel it has definitely helped us. Chuck Norris and Jim Belushi are regular guys and I think the regular person on the street can associate with them. Their celebrity status has really help us in the cigar industry. Plus, we've priced them correctly -- the cigars range from $4.90 to $8.00. It's not an over-priced celebrity cigar. We're not a 10-15 dollar cigar. We didn't go to any cigar manufacturers. We found three very strong and reputable manufacturers. We feel we're putting out a good product and for a good price. I think we have a good package that we're offering.

CW: All of your cigars are manufactured on the Dominican Republic, with each brand made by a different manufacturer. Can you tell us more about that?

MD: Yes. Lobo Rojo is made in the La Aurora factory. The Signature Select is made in the MATASA factory, where they make Fonseca and Romeo y Julieta. Our Vintage Series are made by the Palmarejo factory. This is the smallest factory we went to, but we're very happy with the quality and consistency that was put forth in their product. They have been solid since day 1. In our ratings, between Smoke, and Cigar Aficionado, they have really held up. We picked a different wrapper leaf for each brand. The filler and binders are Cuban Piloto and Dominican Olor. But each factory ages them differently, and they grow the tobacco in different fields. We have three definitely separate and distinct cigars.

CW: When you first came out with Lone Wolf cigars, weren't there 5 different brands?

MD: We originally started with 5 lines and that didn't work out. We let two factories go after I was there two months.

CW: The 2 cigar brands you dropped we're the Sun Grown and the Classic, right?

MD: Correct. Those cigars are no longer available. We do have some left, but we weren't getting a consistent product. And with the Classic, we just were not happy with the overall quality of the tobacco.

CW: Were you involved in picking the tobacco blends?

MD: The blends were decided before I started with the company. When the first shipment came in we weren't thrilled with what we got. So Michael Dougherty, Lone Wolf's director of purchasing and I went down to work with each factory. Rather than change the blends, we changed the production methods. One factory was rolling our cigars 2 days a month with all their rollers. So we honed it down to 10 cigar rollers rolling every day. Now we get more consistent product. We've noticed a tremendous difference. Especially being associated with Chuck and Jim. They're both quality minded individuals. So we changed some things and we're very happy with the results.

CW: Are you aging the cigars more now?

MD: We are aging them 3 months. The tobacco we use is also aged. If you go to the La Aurora and MATASA factories, they have years' worth of tobacco that is constantly fermenting. I think the cigars will start to be aged longer because the demand has caught up. Throughout the industry they were shipping as soon as they rolled them. You saw the quality difference on the shelves.

CW: How many retailers sell Lone Wolf?

MD: At my last report we had 560+ accounts throughout the U.S. We just signed our first distributor in Puerto Rico and the Virgin Islands. We're looking to go into Canada by July of this year. Our goal is 2,000 dealers in the U.S. We've been distributing ourselves since Sept. 97. The reorders are coming in consistently, which we're real happy with.

CW: Do you sell your product directly to customers through your web site?

MD: It's not actually our web page. We work with a company called I-Mall. They have an exclusive web page for our product. They put the whole thing together about 5 months ago. They approached us and we felt it was good for us. As long as they sell at retail prices, we had no problem with that.

CW: Are you announcing any new products for RTDA in August?

MD: We're trying very hard to release the Lobito, a mini cigar similar in size to the Macanudo miniatures or the Fino's by Leon Jimenes. It sells in a 5 pack with a retail price of $5.95. The packaging on the Lobito is world class. They're 4" x 30 ring gauge. It's a quality product at an affordable price and something that anyone can take with them.

CW: Are they machine made?

MD: Yes. But we picked the blends and we're going to hold the standard just as we did with our present cigars. This is a new venture for us but we feel we're doing something a little different that the rest of the market and this is a product we feel we can get out to the masses.

CW: Thanks to Michael Dunne for answering our questions.