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June/
July 2000

Felipe
Gregorio

Philip Wynne first brought his full-flavored smokes to the U.S. market at a time when few cared about - or could appreciate - strong cigars. In the post-boom world, consumers have come to truly appreciate the craftsmanship and Cuban-like heft of Felipe Gregorio cigars.

by Dale Scott

In an effort to fire the imagination of inexperienced smokers and create mystique for their brands, manufacturers routinely advertise their cigars as tasting "just like Cuban cigars," even if they're a far cry. Philip Gregory Wynne's cigars come as close to today's Havanas as any I've smoked, though. Cigar lovers who favor the modern Cuban taste are the line's most loyal followers, because it's about as full-bodied and powerful as you can get in this country.

Wynne, the 43 year-old namesake of Felipe Gregorio cigars, is the son of an American foreign service officer, and was born and raised in Switzerland. "I had enjoyed cigars for years, and my taste ran to the full-bodied Havanas I smoked in Europe," Wynne recalls. "I was drawn to the cigar business after visiting friends several times in Honduras, where I witnessed the manufacturing process." So, in 1989, Wynne bought shares in a factory in Honduras, and sold his first cigar, the Petrus, in Europe and the Middle East.

"I introduced the Petrus to the United States market in 1990," he laughs, "only to learn just how dead the cigar market was." Wynne also found the American palate in those years ran toward cigars with mild profiles, and his hairy-chested Petrus line overpowered many smokers. But he persisted, and introduced his first Felipe Gregorio, identified by its blue band. This was in early 1993, the watershed year for the industry. Wynne was now solidly in business, and subsequently moved into his present Alexandria, Virginia, office and warehouse, which now employs ten.

Wynne's lines proliferated. His original cigars were made in the La Flor de Copan factory in Santa Rosa de Llanos, in northwestern Honduras. He then opened his own facility in Condega, in northern Nicaragua.

The Petrus and Felipe Gregorio lines expanded into several variations, and he made several other minor lines, as well as a number of private label cigars for others. Wynne ticks off his headliners: "First is the Petrus, in Ecuadorian-grown Connecticut and maduro wrappers; then comes Petrus Dominicana, made in the Dominican Republic, with a Cameroon-seed wrapper from Gabon, Africa. The original Felipe Gregorio, with blue band, offers a dark, traditional Cuban-style wrapper, thanks to its Havana 92 leaf. The Felipe II is a Nicaraguan cigar, with sun-grown hybrid Connecticut/Cuban-seed strain for a wrapper that shows itself as a lighter red. The Felipe Black is a maduro, with fermented wrapper leaf. It is very full-bodied. The flagship of the lineup is the Don Melo Centenario, a limited-edition cigar, with a wrapper of shade-grown Connecticut/Cuban-seed hybrid tobacco. We could produce more cigars, but we are limited by the amount of wrapper available to us."

Depending on the line, filler and binder are various strains of tobacco, grown in Nicaragua's Jalapa Valley. Currently, Wynne buys tobacco from others, as well as growing leaf on his own farms.

Retail price ranges for the cigars run from approximately $6 to $15 for the Don Melo Centenario. Surprisingly, Wynne says the erosion in business was at the low end of pricing; the Don Melo Centenario is selling as well as ever.

In his best year, Wynne produced some ten million cigars. Production of the various lines was about six million last year. The Felipe Gregorio accounted for between one and 1.5 million units; the Felipe II about 1.5 million; the Petrus, with broad European acceptance, sold about three million.

"As many as 1,500 smokeshops sold our cigars during the peak," he estimates. "Now, we stand at about 800 active retailers." Not bad, for a boutique brand in a market adjustment period, and considering the attrition of retailers in California due to excessive taxation there. The company sells only via direct contact with retailers, not through reps or distributors. This maintains home-office control over whom the product is sold to.

"I support traditional tobacconists by maintaining top quality," Wynne says. "I also want it made very clear that I never have, and never will, sell to mail-order discount outlets." He has heard the anguish in the voices of too many shop owners who are paying more for the asked-for brands than smokers are buying them for at discounters. He also goes into the field to attend retailers' events and participates in Big Smokes. Boutique Brands: A Crucial Role When asked to put his feet up on the desk and project his thoughts about the future of premium cigars and Felipe Gregorio specifically, Wynne responds with thoughtful answers. "I believe the premium cigar market is strong now, and will remain so," he says."The market will take another leap when Cuba opens up, because cigar smokers - even non-smokers - will have to try the formerly forbidden fruit. Some will certainly become steady cigar smokers.

"Boutique brands offer unique merchandising opportunities," says Wynne. "I see a growing number of retailers who have learned to increase profits and customer loyalty by promoting boutique brands like Felipe Gregorio, over the national brands offered by the major names," he says. "They are selling cigars like ours, because they are keystoned, whereas the majors offer only a 30% margin. Also, tobacconists have learned that, by switching smokers to boutique alternatives, they build captive customers, because these cigars aren't available at the corner drug store or over the Internet."

In his travels, Wynne has found that successful retail locations are almost always run by involved store owners with a well-trained, motivated sales staff. "During the boom, absentee owners with minimum-wage, untrained sales people made money," he notes. "Nowadays, someone who ambles into a shop and receives no direction from an unqualified and unmotivated sales person is a lost customer. This is specially true with so many discounters on the scene - the tobacconist's only advantage over these outlets is service."

Wynne respects many of his retailers' professionalism, and especially lauds Barclay-Rex in New York and Old Virginia Tobacco, with several locations in that state. "They're among my best shops, and they've done a fantastic job with the brand."

But it's the cigar consumer that has witnessed the largest evolution. "Smokers have become more sophisticated than the industry gives them credit for," says Wynne. "They are demanding better product, and they are not swayed by the size and advertising clout of the manufacturer. Customers also recognize and respect the commitment by the heads of the boutique brands, who put their personal names on the bands - witness the success of the Fuentes." He thinks smokers see this in contrast to the faceless corporations that are committed only to the bottom line and market share.

"I'm not interested in increasing production figures," says Wynne. "Instead, I am moving toward smaller runs of higher quality cigars, using unique tobaccos and blends."

When asked what's next from Felipe Gregorio, Wynne divulged details of his latest creation. "For RTDA 2000, we'll introduce our new Felipe II Fusion. It's an aged, limited-production cigar (350,000 cigars) out of Nicaragua, with the Havana 92 strain of tobacco for the wrapper, and very full bodied. Its name describes our new approach - the fusion of tobaccos that goes into the blend."

Felipe Gregorio certainly has its place in smokeshops' humidors. Though Wynne's cigars are especially popular with veteran smokers, they are growing more popular with new smokers, as their palates mature toward full-bodied cigars. I have smoked them, as well as several boxes worth of a variety of the benchmark Havanas.

Cuba, few would argue, yanks the best tobacco in the world out of its soil. But, the nation's drive to increase the output of Havanas to unrealistic levels has taken its toll on the quality of Cuban cigars. The leaves are rushed through the curing process, resulting in green tobacco, with a harsh attack on the tongue and throat. The hordes of bunchers and rollers at the factories are equally green - they crank out cigars with lumps, voids, and lumber in their innards. A high percentage are rolled as hard as a railroad spike. In comparison, Felipe Gregorio cigars evidence patient processing and skilled craftsmanship. Except for the rare insider's specimen from the legendary factories, Felipe Gregorio cigars are the full equal of genuine factory Havanas.

Felipe Gregorio, Inc., 2385 S. Dove St. Alexandria, VA 22314 800-336-1181 www.felipegregorio.com.


SMOKESHOP - June 2000