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Rafael Herrera, marketing and sales director of Rodon Cigars of Miami, Fla., which manufactures Caribu, an Indonesian-made semi-short filler cigar, said the new brands had difficulty at the show. The company has been in business since 1996, but displayed its product for the first time at the Nashville show. "There are a lot of smoke shops that are afraid of new brands," Herrera acknowledged. "The RTDA show is the most important thing we've done. This show will make or break other people. We are an underdog, but we make good cigars."

As evidence of the disregard among retailers for small manufacturers, midway through the final day of the show, Herrera said he had taken no orders for Caribu. "There is a lot of product here," Herrera said. "With so many cigars here, it's difficult to get people to stop for samples."

The trade show occurred amid reports that cigar imports dropped in May for the first time since November 1994. "That's a mixed blessing," said Norman Sharp, executive director of the Cigar Association of America. "The companies probably don't appreciate it very much in terms of their profitability. On the other hand, it's a good sign because the excess inventory is working its way though the system. The high inventory levels should be coming down."

"A lot of companies are here trying to bail out their inventory," said Peter Strauss, executive vice president of Tabacalera Cigars International (USA) Inc., a subsidiary of Tabacalera S.A., the Spanish giant that entered the America cigar market last year with the purchase of HavaTampa and Hollco/Rohr. "I'm surprised to see as many vendors here, not only cigar companies, but I can't believe all the humidor manufacturers. They must be seeing something in the accessory department that I don't see. We are in accessories too and right now that business is not very healthy."

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With cigar imports dropping, major manufacturers and distributors moved aggressively at the trade show to reestablish their dominance on retailer's shelves. The strategies included show deals that hadn't been available for several years, new marketing plans, renewed emphasis on the retail customer, new brands with old names, extensions of popular lines, and alliances with other companies that two years ago wouldn't have been considered.

General Cigar Co. offered an extension of its best-selling Macanudo brand - the Macanudo Robust - and brought out two new lines, one of which, the Bolivar, will be distributed by Cigars by Santa Clara N.A., a subsidiary of 800-JR Cigar. "Macanudo has always been perceived as a smooth cigar, a consistent cigar, but not in the full-bodied range," Cullman said. "This cigar takes the Macanudo into another spectrum."

In Nashville, Cullman urged retailers to keep prices up so that customers don't get confused about value. "It's very confusing today about where value is in the market," he said. "It makes it difficult for traditional manufacturers, guys such as us who have long-standing brands in the marketplace."

General Cigar also introduced the handmade Don Sebastian, a Dominican cigar that will be marketed at the high end of the mass market in drug stores and convenience chains. The cigars will sell in the $2 range. "That market is very important to us," Cullman said. "The cigar business is the cigar business. It runs from very inexpensive cigars to very expensive cigars. On a dollar basis, premium cigars are 65 percent of our business. That leaves a tremendous amount of non-premium business." General Cigar subsidiary Villazon unveiled its Cuban-style Hoyo Seleccion Royale, but didn't take orders.

Consolidated Cigar Co. launched the La Corona Cabinet Selection, which it intends to market worldwide; a maduro extension of its popular H. Upmann and Don Diego brands; a high-end Montecristo Cigare des Arts; and La Corona, which will be distributed in the United States by Cigars by Santa Clara and in Europe by Henry Winterman in competition with Cuban cigars that carry the same name. "The trademark is ours," said Jim Colucci, Consolidated's senior vice president of sales and marketing. "Our belief is that the opportunity to sell handmade quality cigars from the Dominican Republican and Honduras is growing internationally." Also unveiled was a new co-branding arrangement with Napa Cigar Co., under which the newly-developed Napa H. Upmann and Napa Don Diego blends were introduced.

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"We believe that the consumer is looking to purchase established brands and that he can understand the ratio between price and quality. He is confused by the 'Don Nobody' brands compared to our lines and others who have held their prices," Colucci said. "Last year, the retailers, justifiably so, were purchasing everything they could to stock their shelves. What's changed dramatically is that now if a manufacturer gets an order, he can be pretty sure that the retailer is restocking his shelves."

Tabacalera Cigars International (USA) promised to dramatically increase supplies of Romeo y Julietas. A new Dominican version of the Romeo y Julieta that Tabacalera is making in its own factory will also be distributed by Cigars by Santa Clara. The company also unveiled two new Dominican lines - VegaFina and Quintero - which will sell in the $2.50 to $4 range. "We are doing that because we believe that the average price must come down," Strauss said. "If we want the business to grow, we can't rely on $5 or $6 or $8 cigars."

He added that it's likely that Tabacalera will introduce other low-priced cigars to fill what he sees as a void between machine-made and premiums. "I see a tremendous need for what I call a sub-premium cigars - anywhere from 80 cents to $2," Strauss said. "There is a dearth of that product."

Tabacalera A. Fuente y Cia added a cedar-boxed Cabinet Selection to its Montesino line and new toro and robusto sizes to the existing Montesino brand. Shortages of all Fuente brands, however, will continue because of production limitations, according to Carlos Fuente Jr., who said Fuente's four factories in the Dominican Republican are producing at near their capacity. "We can produce another five percent this year, but that is not even going to scratch the surface," Fuente said.

J.C. Newman Cigar Co., Fuente's distributing partner, unveiled a pyramid shape in its Cuesta-Rey line, which is made by Fuente. Holt's Cigar Co. debuted a new cigar, the Premium Dominicana, which will also be manufactured by Fuente in the Dominican Republic. In addition, Georgia-based Lane Ltd. offered a new handmade version of the Perfecto Garcia and manufacturer Manuel Quesada announced the extension of the Fonseca brand with a vintage line.

As much as manufacturers and retailers alike would like the cigar industry to stabilize, Lew Rothman, president of 800-JR Cigar, doesn't believe it will happen anytime soon. "I think we will have a shortage of tobacco in two or three years," Rothman said. "For the next five or 10 years, you will have an accordion effect - the industry will expand and contract and expand and contract. Right now, manufacturers don't know what to make and growers don't know what to grow."

Tabacalera's Strauss said many different pressures developed when demand for cigars was growing by more than 30 percent annually. The industry can be much more orderly if the growth is between 2 percent and 4 percent a year, he said. "It's not a matter of growth or decline," said Strauss. "It is a matter of what the growth is going to be."

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