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Feb./March
2002

Miami Cigar & Co.:
Tasting the Flavor of Success

Miami Cigar developed its Tatiana flavored cigar line from scratch and continues to refine it with line extensions, merchandising support, and attempts to open new markets. It has become the new star in its range of cigar offerings.

by Joseph Finova

It's not easy introducing a new cigar these days - just ask Giuseppe Schiffano, operations manager at Florida's Miami Cigar & Co. It generally takes better than a year to bring a new product to market, he says. In some cases, it can even take two years.

Research to determine consumer preferences is time consuming and tricky. Then, once a formula's been devised, there's the task of producing samples that will realistically reflect the finished product. These of course are followed by tastings, retailer introductions, more tastings, data analysis, and the dreaded critics' ratings. If all systems are "go," then mass production is planned, tobacco needs to be bought and factories commissioned. This is followed by promotions and marketing, pumping the sales force, getting back in touch with the retailers and distributors, and of course fighting for shelf space.

And then of course, you still don't know if you'll succeed.

Miami Cigar, however, after a thorough investment in the tiring and expensive mentioned process just described, may have a winner on its hands with its Tatiana Cigars - a flavored line that entices customers with an attractive display and helps retailers with supportive marketing.

"It's a very competitive market," notes Schiffano. "You need the very best strategy, including a focused target." Schiffano, who spent 11 years as a marketing manager with La Aurora cigars, a nearly 100-year-old Dominican Republic brand, is helping Cuban-Americans Nestor and Mariana Miranda bring the 13-year-old Miami Cigar to a new level. Daniel Miranda, the company's marketing director, is also quarterbacking the privately held company's drive. Research and testing must be paying off. Last year, sales grew over 58% as more than $2 million worth of Tatiana sticks were sold.

Miami Cigar also sells La Aurora, Leon Jimenes, Colorado by Don Lino, Habano Reserves, and De Los Reyos cigars. All brands are made with Dominican-grown tobacco. The firm also represents European giant Tabacalera's Ducados in the United States. La Aurora is a worldwide brand, available in Europe, North and Latin America, Africa, and Australia. La Aurora recently introduced its Platinum line, which is packaged in a unique pefecto-shaped aluminum tube - a one-of-a-kind in the industry. There's also a Maduro wrapper line. Betting that size does matter to some, the Leon Jimenes Maduro Toro boasts a size 58-ring gauge.

Don Lino is a Connecticut Shade, Dominican filler and binder that comes in a Cedar box. The Havana Reserve also has a Connecticut-Shade wrapper while another version features a Maduro wrapper with Dominican filler and binder. It's a medium-bodied cigar that comes in a wooden box. Colorado by Don Lino is also medium bodied but has a Cameroon wrapper around Dominican filler and binder.

Miami Cigar also sells Paleo cutters and torch lighters and a Dominican bundles line - Santiago - which features seconds in Cameroon and Connecticut Shade. Its Delicados is a Dominican cigar made by De Los Reyos. This box-pressed smoke is available in Connecticut Shade, Maduro or Cameroon wrappers.

Miami Cigar sells directly to retailers, has a 16-member sales force covering all 50 states, and also deals through major distributors. Displaying at the RTDA has helped reach customers as well. In addition to a striking Tatiana Classic crystal tubal display of 40 sticks, direct, point-of-sales materials include acrylic displays for tins, door decals, change mats, retailer and customer brochures and trade-publication advertisements. "We offer different lines, including the low-price, high-quality category," says Schiffano. "Some consumers prefer a balance of different flavors. Others still want large, handmade, premium cigars." Large smokes include the 5 inch by 34 ring gauge LaVita and the 6 inch by 42 ring gauge Classic. Both come in wooden boxes.

Speaking of consumers, the delicate Tatiana line may be catching on with a potentially lucrative segment that's largely eluded the cigar industry for centuries - the women's market. "This segment is very busy and growing," notes Schiffano who adds that so far, Tatiana cigars are available in North America and Australia. "We were looking for a new market opportunity and saw the demand for an undeveloped category."

Flavored cigars are Miami's attempt to cultivate this new niche. Developed in the Dominican Republic, the Tatiana line still delivers complete tobacco taste and feel. The taste is not reminiscent of candy, but instead provides balanced flavor, Schiffano says.

Miniature Tatianas (3 1/2 x 26) are handmade with a Sumatra wrapper. They have quickly become the leading flavored cigars in the U.S. market, according to Miami Cigar Co. The Dominican tobacco is of the short-filler variety and is packed with high-quality essences that deliver the eight respective flavors: vanilla, rum, cherry, cinnamon, chocolate, cappuccino, amaretto, and honey. Presented in "luxury" acrylic jars of 50 handmade sticks, they are also displayed and sold by units and in tins of 10 for vanilla, rum, cherry and honey. "Demand has been strong because of our quality," says Schiffano. "The high-quality essences are what provide the pleasant flavor. Women are enjoying them and make up a growing segment of customers."

Company research also indicated that women would present a promising group for the flavored bunch. "We knew our cigars were meant for a different kind of smoker. Some cigar smokers are 100% loyal to their brand. Many, however, switch between brands and categories. They will even smoke pipes. They will try to find cigars that consistently deliver quality. We saw an opportunity with this type of smoker as well."

Tatiana experienced a methodical marketing and development process before any finished products hit the streets and shops. Tastings at tobacco shops helped provide vital smoker feedback for Miami Cigar as it developed the line. Consumer and retailer information was analyzed and blends were modified in order to present the most appealing and attractive product. Samples were provided to different rating organizations and eventually a mountain of data was compiled.

They also took economic trends under consideration before launching their line and developing the product base. By combining both sets of data they were then able to consult with blenders and factory personnel to perfect their product before bringing it to market. Schedules were then set with distributors and a sales force was armed with marketing material and of course, lots of samples. A Miami-based graphics-design firm was hired to create a provocative package that would send notice that they were trying to sell something different.

"The past few years have been slow," laments Schiffano. "Overall, the economy is down. This has reduced sales for some businesses but our brands are growing." Schiffano admits there are many variables in the marketplace affecting sales. Price and demand are just the obvious ones. "We're always asking, 'should we go premium, super premium? Handmade? Machine-made?'" Despite it all, Schiffano remains optimistic. "We think 2002 will be as good for us as 2001."

Not only was the development, marketing, and design processes of Tatiana different, so were the thinking and courage that remained behind the ordeal of introducing a new - and in some people's mind, controversial - product to an often staid and tradition-bound industry. It's a fresh, creative idea, and in tight economic times, more of this type of thinking is needed. It remains to be seen how the marketplace will receive it over the long term, but retailers seeking to jump-start a sluggish market would not suffer by placing a display on their counter.

Continued strong growth is on tap next year for the Tatiana line but no new flavors are planned. The company plans to go forward by increasing retail distribution beyond the tobacconist and enter drug stores, gasoline stations, and convenience markets. "We will try to be wherever we can to reach consumers," says Schiffano.

He's got the right idea.

Miami Cigar Co., 2533 NW 74th Ave., Miami, FL, Tel: (305) 726-6820, Toll-free: (800) 643-7209


SMOKESHOP - February/March 2002