Tobacco has been a part of Jorge Padron’s life from day one. As a child, he learned the art of cigar making from his father, Padrón Cigars chairman Jose Orlando Padrón. Today, Jorge Padron is president of the Padrón brand, which over the years has earned the highest accolades in the industry. I enjoyed a Man to Man with Jorge Padrón recently, where we discussed the challenges of taking over leadership of the family business, customer service, and the drive to stay on top.
“I smoked my first cigar when I was fifteen years old and I almost died after smoking it!”
You come from a traditional cigar family. At what age did you first realize this might be the business for you.
Jorge: I was raised in the cigar business. I’ve been exposed to it not just through my father, but through my whole family. My brother and my sister and I have been exposed to it for a long time and we’ve seen the dedication and the hard work it takes to build a business.
I smoked my first cigar when I was fifteen years old and I almost died after smoking it! So I didn’t really smoke again for quite some time. My father never forced us to either smoke cigars or get into the business. So over time as I graduated from college that’s when I started smoking cigars. I got out of college, I got my bachelors in marketing and then I went to get an MBA. At that point I knew I was going to come into the business, but at that time the business was not what it is today.
For one thing we didn’t sell nationally. We had national presence directly with many consumers but we didn’t have a national presence in retail stores. So there was a lot of work to do in that area. Most of our business was focused here in Miami selling to local Cuban cafeterias, where they sold “cafe Cubano” and all those types of things. So I knew that we had a good product because I felt if we could sell cigars to the Cubans in Miami, who are probably the most knowledgeably cigar smokers on the planet, then I felt that we can certainly sell nationally to retail stores all across the country.
That’s a great point. The Miami market must be a great test market I would imagine.
No question. When I started working here, I kept looking at the demographic of the customers that I would see walking in the door. At that time I was 21 years old – 22 years old and customers would walk in, they would buy a box and they would leave. But to sell them a box I would have to open 10-15 boxes of cigars so that they could personally inspect each one and determine which box they wanted. That doesn’t happen today. When a consumer walks into a retail shop they buy a box that’s sealed. They don’t even look at the cigars. But the most important point back then was that a lot of the customers that were coming in were older gentlemen. The typical age was probably between 50 and 70 years of age. So I kept looking at that and one day I said to my father,”Dad, we need to do something here because a lot of the customers that we have coming in here are older people and are very loyal and they smoke a lot of cigars but there will come a time when we won’t have a market left.” That’s when we started attending trade shows and then Cigar Aficionado comes along and they started promoting cigars as well so you know, the timing was perfect.
“I’ve done a lot of work to help build the brand to where it is today but what makes me the happiest is the fact that I have been able to do it with my father.”
Taking the reigns from your father must have been challenging. What was that like?
The thing for me is that its all about respect. You have to earn it. When I graduated from college, I got my MBA and my first brilliant idea. I came up to my dad and I had already been in the business for a few months, and I said, “Dad, I think we should change our Padrón band, the brown one, and jazz it up”, because it was a little plain. My dad let me go on for like 45 minutes with my explanation. He looks at me and he says, “Jorge, you know how many cigars I’ve sold with that plain brown band of yours? Almost 100 million cigars so when you have your next idea come back and talk to me cause that one isn’t going to fly.”
As you get older you get wiser so now looking back I think what an idiot I was for having even thought of that suggestion. It was ludicrous and my dad did the right thing by telling me to get out of his office. Over time you learn a lot more. Luckily for me I’m not a big ego guy. I’m very humble and very simple. I’m not a person who needs a lot of massaging to be happy. I’m happy when my dad is happy and over the years I’ve done a lot of work to help build the brand to where it is today but what makes me the happiest is the fact that I have been able to do it with my father and that he has witnessed it and has been a part of the whole thing. So people ask me that question all the time. How hard is it? Its not easy. My dad is a stubborn guy he has his ways but he has every right to be that way because he’s the one who built this business. My job was to help him improve the business. Fortunately over the years my dad has, little by little, understood that and respected my opinion more and more as time has gone by. Now its not like it was 20 years ago. I don’t present my dad stupid ideas any more. I present ideas that make sense and 10 out of 10 times he agrees. So its simple. Its not like we are trying to reinvent the wheel. We are on the same page.
Cigar Aficionado magazine has awarded Padrón the coveted Cigar of the Year award on numerous occasions. That must be quite gratifying.
Its probably the most rewarding thing. I look at this business through my dad’s eyes. So for me, the most important thing that has happened in the last 25 years is the fact that my dad who has busted his ass for many years before we got a lot of recognition, that now he gets to enjoy it. To see the happiness on his face when we get the number one rating is just priceless. What more can you ask for?
My dad can die tomorrow and he will be the happiest man on the face of the earth. You know? These types of things just validate everything that he has worked so hard for. But the most important thing in our business is that we make products that people consume. So its very tangible. The way we look at it, the reward is in the expression and the responses that we get from our consumers. The financial part of it comes second because if you don’t have that consumer enjoying your product then the revenue doesn’t come. That has really been the driving force behind Padrón’s Cigars from day one. It has always been quality driven. We have always believed that if we put quality in the product first, then everything else will take care of itself.
“Just cause you have success, just because you have the number one rating doesn’t mean that everything is fine. Now you have to work even harder to make sure that it stays there.”
You have a very loyal consumer base don’t you?
Yes, we have a very loyal consumer base. We don’t make a lot of cigars. But the ones that we make are good and fortunately this transcends the economy. There is a Padrón for every consumer. If you can afford a $25 cigar you are going to get great quality cigar at $25. But if you can’t afford a $25 cigar and you can only pay $5 for a cigar you can get a Padrón at $5 that is better than any $5 cigar in the market and maybe better than some $10 cigars. So that’s the beauty of our brand. We have never taken advantage of our position in the pricing of our products. We have certain cigars that my dad calls the Rolls Royce but we also have the everyday cigar, which is the Toyota, its the Padrón line that in my opinion is one of the best value cigars on the market. So we have it all and that helps us build a very loyal customer base. When you talk to a retailer anywhere in the country what they will tell you about Padrón is that its the number one brand for box sales in the most humidors. That’s a testament to a great brand.
I was introduced to the Padrón brand through my father with let’s say the Toyota version of the brand and I impressed. But I have to admit I wasn’t smart enough to stay with the Toyota I have since graduated to your more expensive cigars.
That’s good. I have 3 kids I have to put through high school and college so keep buying those.
You can smoke pretty much whatever you want on a daily basis. Since you can pick anything you want off these shelves, what’s your daily smoke?
There are two answers to that question. The first one is business. My job is to taste cigars so I smoke everything. Now, there are, within the cigars that we make, certain cigars that I prefer. For example, on New Year’s Eve, what did I smoke? I smoked an 80th and a #45. Imagine this; we make five and half million cigars a year. So my job is to taste. So I taste. I taste 3000 and I taste 2000. I taste everything. But when its my time and I have certain cigars to pick from I usually stick with cigars from the anniversary line and the 26 and the 80th.
The Padrón brand enjoys close relationships with its retailers and many of its consumers. I sense this began with your father.
No question. We sell five and a half million cigars a year and we do it without salesmen. We don’t have a single salesmen out on the road selling cigars. So, how do we do that? Well, number one we have a great product and people ask for it. But we also have very good relationships with the people we do business with. Not just at the consumer level but also at the retail level. The owners of these shops which are mostly family businesses, you know mom and pop type retail stores, specialized tobacconist
Despite the growth, Padrón Cigars continues to be a family run business, right?
Absolutely. Well, we got the first layer which is myself and my bother and my sister. Then we have the next generation down. My kids are still too young but my brother has two of his kids that work here, Jeffrey and Jessica. So they are starting. Little by little they are starting to understand the way we do business and that’s part of it. Elizabeth, my sister, also has her son Marcus who works with us as well. Also have my cousin Rudy who has been with us now for 15 years. So we have Ceaser Gadera who isn’t family but is almost like family. His dad use to work with my dad in Nicaragua back in the 70s. So we have a lot of family members that work here. But the most important thing in my opinion is that my brother, me and my sister we grew up and it was different. We have been working hard to build it to where it is now. We are at a level now that its a question of maintaining and hopefully improving but a lot of the hard work has been done. Now its just a matter of maintaining what we’ve got to ensure we keep that quality and keep the respect of the consumer.
Sometimes when you don’t go through all those experiences, you don’t understand what it takes to stay at the top. So the hardest things for us and for me in particular is to communicate that to them on a daily basis and tell them, “Listen to me. We are up here today but we could be down here tomorrow so you’ve got to stay on the ball. Just cause you have success, just because you have the number one rating doesn’t mean that everything is fine. Now you have to work even harder to make sure that it stays there.” That’s the thing that is amazing about my father, a person that has worked so hard and achieved so much, he never forgets where he came from. He’s still fighting everyday to sell that other cigar. It’s amazing! Eighty three years old and he has seen all the success but to him its like he is still back in 1964 selling the cigars by hand to the little cafeterias and that spirit is what everyone has to have.