Cigar Weekly Interview with Aylin Ozgener
CigarWeekly: I hear CAO has a new cigar coming out?
Aylin Ozgener: Possibly. We are working on it. We are testing some samples. And honestly, I don't know if they will be in production and be ready by the time RTDA rolls around, but we are certainly going to try.
CW: What's going to be special about it? What are you blending for?
Aylin: Well, we are going to blend for a fuller bodied cigar. And, also we are working on a maduro. We would like to have one for our 30th anniversary celebration. That comes around once, so we would like to take advantage of it. Our Nicaraguan kind of fills in the niche for the milder cigar. Our Honduran covers more of the medium. So we would like something with a little more "oomph", more full bodied.
CW: What are you using?
Aylin: We are testing out several different blends right now. It is probably not going to be a puro. It's going to have a mix of different filler and a different binder. We are testing several blends right now.
CW: You aren't going to tell me, are you?
Aylin: No, not till we have something narrowed down. I would if I could, but I really don't know right now. Whenever we test cigars, we take our time doing it and we have the right people testing. And we like to spend some time doing research into what we feel we need in the market. All of that takes some time.
CW: One of the things our readers want to know is the effect of the increase in the amount of cigars available.
Aylin: Yes, more people are getting regular supplies and the supply is catching up with demand. In my opinion, it's good that things have leveled off, because the stronger brands will excel and do well and retain high quality. Whereas the various brands, many which are already gone, won't be able to last and haven't lasted. People are becoming more educated with the cigars they are smoking and they are past the stage where they are testing on all these new different lines. They are still testing some, but they are more critical. They are recognizing good quality cigars. They are recognizing what type of cigars they enjoy smoking. It's nice to see more of an educated crowd out there. More people have educated themselves about cigars.
CW: How do you market your cigars?
Aylin: We do a lot of various things actually. We are involved in a lot of promotional events. We have a PR firm we work with, RBI Communications in Los Angeles. We do advertising in various magazines. Also, we sponsor cigar dinners, in-store promotions. We have a very good relationship with Fox Sports. Which is a big deal because then our cigars involved in the NHL All-Star games. Also in Nashville, too. I think we are going to be working with the Nashville Predators ice hockey team. We are excited about that. We definitely put a lot of money and time into promotions, those that we feel will really be effective.
CW: What is working best for you?
Aylin: What's working best? I think a combination of many things that we are doing helps. The advertising helps initially, but it is also getting people to try the product and be educated on the product. So we are having more cigar dinners. More in-store promotions where we get a crowd in and talk about the product and answer questions. It is very important to answer the questions that they want answered. We try to do more of that. And again, all the events that we have our cigars in have been effective. People are enjoying them. They are trying them out. And when you are in competition with hundreds of other brands, that's what you got to do. All of that combined has been effective. We are getting more of a response, more people are calling in and enjoying the cigars. We are out there and we are happy about that.
CW: How many retail outlets are you in?
Aylin: Maybe, about 2,000.
CW: Is that with just cigars? Don't you have flavored cigarettes?
Aylin: We don't have cigarettes, but we have pipes, pipe tobacco and humidors and that customer lists includes any of those products. I don't know how many, maybe a thousand, have cigars. It is hard to keep track because we have some distributors that distribute to many stores that we don't have on our customer list. So we are in many places. But we are critical as to which accounts we open up. We have an application process and a lot of times we will require photographs of the places. You have to be careful. You don't want your cigars discounted. You don't want them to get a bad name. So on the premiums, we really try to be careful about who is selling those products. So we do have an application process that every account has to go through before they can buy product from us.
CW: What do you look for in a retailer?
Aylin: We focus more on traditional tobacconists and new tobacconists that we feel will be around in the business and are educated on the products. That is most important, that they are educated on the products and that they are serious about the business. You can't come in to the tobacco business for a short ride and expect to make money in it and then pull out. You really have to love the business and really focus on it and know about it and learn about it or you just can't make it. That's how it works.
We sell to many traditional tobacconists, new tobacconists who have turned out to be excellent customers. We are very strict with distributors. We'll have a few distributors out there. We make sure that they are going to being distributing to places that are good and we feel will help us out. Not gas stations and corner markets. You can always work more on distribution. We have a couple of sales reps we are training for next week in various areas. And we have a great sales force out in California. Kronheim does a great job in the central Atlantic states.
CW: Do you sell to mail order shops, not just tobacconists?
Aylin: Yes, there are a lot of stores that do have mail order catalogs and we do partake in some of those, but we don't sell to discounters. We want to support our tobacconists as much as possible and not hurt them by having our prices slashed by some discounters, so we are careful about who we sell to.
CW: Does CAO sell direct?
Aylin: No, we are wholesalers, so we never sell direct to consumers. Consumers will occasionally call and we will direct them to a retailer in their area or to a customer of ours that has mail order available. We try to support our retailers.
CW: Are your products available internationally?
Aylin: Yes. In fact we are, I think, the strongest cigar in Japan. We have an excellent relationship in Japan and we just came out with four packs, mainly for the Japanese market, although we are selling some here as well. We came out with those for the Japanese. Also, we are in Iceland, Ireland, England, Malaysia, Australia and several other countries. I know we are very strong in South Africa, as well.
CW: Did your pipe business serve as an entrée internationally?
Aylin: The pipe business, we mainly sell in the U.S, although we import the pipes from Turkey. But pipe sales have gone up 15-20% this year alone. Pipes have really gone up and now we are excited about our pipe tobacco line. We have a pipe tobacco line that has done very well and is imported from Germany. We just expanded from six to eight brands and I believe we are going to expand from there. And pipe tin tobacco, sales have really gone up on those. So people are exploring. People are definitely educating themselves more on pipes as well as cigars. It's nice to see that coming back, it's a niche in the market.
CW: Do you think pipes will become the new "thing"?
Aylin: Well, we may be coming out with a line of briars, I've been hearing. We import only Meerschaum, and that is initially what we started with 30 years ago. Now, we are again looking to expand into a new set of briars, and we are looking in a few countries for that. So who knows, we may be coming out with a new line soon.
CW: Obviously you are seeing pipes pick up. Do you think pipes might be trending behind the cigar trend?
Aylin: It is always hard to see. It is interesting to try to focus on what the next trend will be in the tobacco industry. You never really know. Pipes were so big in the late seventies and early eighties. It was unbelievable. Pipes would sell like cigars. I mean it was outrageous how well they would sell and then suddenly the pipe market declined severely and cigars really took off. And I think cigars will stick around. They are a good consumable product and people have really learned to enjoy them and relax with them in today's stressful society. But pipes - I think people are beginning to educate themselves and there are some people who will stick with the pipes, as well. You are not constantly buying a pipe, you are just upkeeping one pipe. But then again, pipes are not consumable. That's where the niche in the pipe tobacco comes in. Now we have a consumable product, the pipe tobacco line and that has really taken off. I think for a while pipes will be hot. But I don't think it will take off like the cigars did. I think it will stay leveled out and consistent for awhile.We are excited about the pickup in the overseas markets. It's been great.
CW: Yes, we are hearing about double digit growth in Europe.
Aylin: It has been tremendous. We have definitely seen a huge increase in the market. We have a couple of orders going out today to Norway and Denmark, and we just heard from Japan. The market is doing well.
CW: We have a standard question we try to ask everyone we interview. If the Cuban embargo were lifted tomorrow, how do you think it would affect your business?
Aylin: I think there would definitely be a panic in the industry to see who could get the Cuban cigars going. I know that everyone would run and try to get cigars. However, I think that as popular as they would be for the first few years, there would still be many people going back to the Nicaraguan, Honduran and Dominican because Cuban cigars tend to be very strong. Not everybody wants to smoke strong cigars.
CW: Do you see new Cuban puros or would companies try to blend in some Cuban tobacco?
Aylin: That's a possibility. More than the puros. Puros would definitely be toward a narrow market. Because only those that smoke quite a bit or are very experienced smokers would be able to smoke those and not feel ill because of the strength of it. There would be some people who would push the puros and come out with them and they should because puros are definitely good for the market. There would definitely be a market for non-puros as well. It would be nice to have some Cuban in there, but to tame it down a little bit, it would be nice to have a different blend in the filler.
CW: What do you see exciting happening in the next twelve months?
Aylin: I am seeing an increase in women smoking, which is nice. More women are learning to really enjoy and love the cigars. I always like to see that. I have seen more women at events that I cover. I will be doing an event in New York coming up and it is always nice to see women enjoying it, as well as men. It is something that women and men can share together and enjoy.
CW: We recall reading a quote from you that was annoyed at the idea of blending cigars just for women. Is that accurate?
Aylin: I wouldn't say annoyed. But to me it doesn't make much sense because what sort of blend would that be? There are women that like to start with flavored. But just to have it say this is a woman's cigar or have on the label "For Women" seems strange to me because women, while they have differing tastes, for example, I like certain maduros very much. Whereas I don't like flavored cigars. Some people love the flavored cigars and don't like the maduros. To me it is very hard to pinpoint what a woman's cigar would be. And I guess the same thing with the sizes. I used to smoke our Presidentes [ed. Note 7.5 x 54] all the time. But the trend for women would be toward the petit corona [ed. Note 5 x 40] or robusto [ed. Note 5 x 50]. If you have so many sizes anyway, it doesn't seem to make much sense for me to try to market it "For Women" this and that cigar. There are already so many out there that women, even women testing them out in the beginning, are going to enjoy.
CW: Thanks to Aylin Ozgener for answering our questions.