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    Categories: IPCPR 2014Selected

Another Week in Paradise: IPCPR 2014 Recap

Last month, the cigar industry gathered in Las Vegas, Nev. for the annual IPCPR trade show and convention. Even a part-time reader of the site should be familiar with the acronym at this point, as the trade show serves as traditional time for manufacturers to launch new products, coverage that we have been provide since May and continue to write on a daily basis.

As we do ever year, here’s our annual IPCPR recap with commentary from Patrick Lagreid and myself.

ON ATTENDANCE

Last year, we spoke about how at every show we hear the same complaint about attendance. Our argument then was that we needed a new measuring point to judge attendance by, because the days of the cigar boom (mid-1990s) are gone.

This year, the trade show space was 30 percent larger and not as well attended than last year. As such, there were lots of complaints regarding the ghost town that was the Sands Convention Center. Four years ago, after my first IPCPR trade show, I wrote about the problems incentivizing retailers to attend the IPCPR show, because it was becoming apparent things were about to hit the fan.

Getting retailers to attend the trade show is no different than getting a child to eat their vegetables—if you want them to eat the spinach, you cannot let them eat dessert first. The issue with IPCPR trade show attendance has little to do with anything that goes on during the trade show, but rather everything that goes on before and after. Manufacturers regularly offer the same incentives to retailers before the show begins and for as many as four weeks after the trade show concludes. That’s giving a kid a cookie after they refuse to eat the spinach.

For some retailers, the opportunity to hang out with friends, take your picture with a few cigar industry celebrities and sample the new cigars like a kid in a candy story is enough to spend the thousands needed on airfare, hotels, food and the cost of covering additional hours at their shops. For many, probably the majority, it’s not.

Companies like L’AtelierWarped and Tatuaje offer products that are only available to those who physically attend the show, but it’s not nearly enough. It probably would not be enough if every manufacturer had exclusive releases for those at the show. If manufacturers want retailers to attend, they must provide a true economic incentive for them to attend the show.

As bad as this year was, it’s not the big problem. The real concern from manufacturers is three-fold: a. attendance seems to be trending in the wrong direction, b. New Orleans historically is a poorly-attended show and c. the costs of the trade show for manufacturers is rising rapidly. — Charlie Minato.

CIGAR RIGHTS ARE IMPORTANT, WE THINK/HOPE

If you thought attendance was bad at the trade show, the convention portion of the annual gathering hosted by the IPCPR was even more concerning.

A seminar regarding legislative issues, including the major threat from the FDA, was no more than 10 percent full, and that might have been generous. One retailer told us that his lunch that day was more important than the seminar. Some manufactures were explicitly concerned, but most simply mentioned it in the broadest of terms, not much more than “unless the FDA comes” or “FDA attacks.” It’s an absolutely incredible contrast to the relatively young e-cigarette business where FDA threats are met with highly-organized campaigns with a strong grass roots movement.

At arguably the most critical hours, the cigar industry, as a whole, remained how its been for the last few years, apathetic. — CM.

ALTADIS USA 2.0

With a company as large as Altadis USA, there is always a certain amount of rebranding going on: we saw it last year with the Juan Lopez line, in previous years with the Te-Amo Revolution, Trinidad Paradox, and over the course of several years with the company’s flagship brands, Romeo y Julieta and Montecristo. In particular this year, the Montecristo brand made a big push to revamp the more than two dozen lounges across the country that bear its name, including adding a lounge exclusive cigar, while the company added the recently released H. Upmann’s The Banker and 1875 Romeo y Julieta.

But the headliner may have been the Espada by Montecristo; yes, it is a new Montecristo, but is a Nicaraguan Montecristo, made by the Plasencia family, which carries more weight with retailers than just “here’s some Nicaraguan tobacco sent to our factory in the Dominican Republic.”

Whether or not anyone wants to admit it, the investment Davidoff made into relaunching Camacho was a wake-up call to the rest of the business. If you want to reinvent a brand, here’s the bar. It certainly changed the course of Miami Cigar & Co.’s plans for the Nestor Miranda brand and it seems Altadis USA is aware of the challenge.

Earlier this year, a few of the more senior members of staff were placed in new positions and the retirement of Gene Tipton, vp of premium cigars, has been announced. The Javier Estades-led operation will see some new faces and it’s clear the company’s goal is to give retailers the tools needed to sell its products in the ever-changing cigar world. — Patrick Lagreid.

As part of the personnel changes, Rob Norris moved from the premium sales side to JR Cigars, the North Carolina-based retail operation owned by the company. That appears to have been a positive move as multiple manufacturers told halfwheel JR is making changes that are helping them sell more effectively. Anytime vendors indicate significant changes with one of the largest buyers in the world—it’s important to take note of and it seems that’s exactly what’s happening at JR now. — CM.

“NICARAGUAN” IN NAME

A pair of cigars came out at the trade show this year that both featured Nicaragua in the name: Cohiba Nicaragua and the Kuuts Nicaraguan Blend. At first glance, what does that mean to you? That it’s a Nicaraguan puro? That it’s made in Nicaragua? That it contains at least some Nicaraguan tobacco?

It seems like the latter was the only thing that the industry could agree it meant, as neither cigar used a Nicaraguan wrapper and only the Cohiba was made in the country. (For the sake of argument, the same thing was seen with the CAO Colombia, a Nicaraguan-made cigar that uses Colombian filler, but no wrapper, and in reverse, the Reinado Grand Empire Reserve Ecuador Edition, a Nicaraguan cigar that uses Ecuadorian wrapper, but Nicaraguan fillers.)

We’ve brought up the issue of needing more transparency and honesty in the blends of cigars, and these handful of releases seemed to only muddy those waters instead of help to clear them up. If anything, we worry that it gives consumers the wrong impression as to what it is they are actually smoking.

Of course, we’d be remiss not to wonder what country could be next should this experiment continue; maybe Mexico since San Andrés seems to have solidified its return to mainstream acceptance? — PL.

20-AVO-15

For the last 14 months or so, private chatter around Davidoff was that the AVO brand would undergo a major transformation, much like the one Camacho did last year. At this year’s Davidoff Golden Bands Award dinner, Davidoff made those plans public.

It was just one part of what seemed like an odd trade show for the brand. Avo Uvezian, the 89-year-old face of the brand, was not at this year’s trade show due to health concerns, though he did record a video message for the Davidoff Golden Band Awards that was received with a standing ovation. As such, the piano Uvezian normally plays was left empty for most of the trade show. On display were some new products, a sampler full of older limited editions and a clear sense that this year was not supposed to be the memorable one.

Davidoff would like you to mark your calendars now: 2015 is the year for both AVO and Avo.

WHO WILL ACTUALLY GET TO SMOKE PADRÓN’S 50TH ANNIVERSARY CIGAR?

There’s no doubt that Padrón and its 50th Anniversary “The Hammer” humidor release was being talked about from almost the minute the trade show floor opened, but what I wonder is how many people will actually get to experience it? Assuming that the company is only producing 1,000 of the humidors, it doesn’t seem that far-fetched to think that there are 1,000 people who are big enough fans or collectors to want a humidor for themselves and have the resources to pick up the $5,000 or so price tag, before taxes of course. When you factor in those folks who would buy one looking to flip it and make a profit on the secondary market, it seems hard to imagine that many of the humidors will make it to the local brick-and-mortar retailer for most cigar smokers to purchase.

The situation is a bit reminiscent of when Habanos S.A. launched the original Cohiba Behike in 2006 as part of the marca’s 40th anniversary. 100 humidors were made, each with 40 cigars, and they got off the primary market in a hurry. Some went into private humidors, others to the secondary market. Today–assuming you could find one–you’d have to fork over well more than it costs to smoke a box of regular production Cohibas in order to enjoy that one cigar.

Speaking both as a member of halfwheel and as a cigar consumer, I’m not sure I’ll ever have the chance to walk into a store and purchase a single Padrón 50th Anniversary. I might have to have one gifted to me or purchased on the secondary market in order to taste this celebratory cigar. I’m remaining optimistic of course, but the numbers could certainly suggest it might be tough. It seems reasonable that you’d have to pay more for one on the secondary market than what a good number of high-quality boxes of other cigars would cost at your local retailer. Even if you were to get one at retail, you could also have purchase a pretty good sampler of the entire Padrón Series line for the same price.

Incidentally, the Padrón Family Reserve No. 50 almost seemed to get overlooked in the fawning over the 50th anniversary humidor, yet that’s the cigar that a much greater number of cigar smokers will be lighting up in honor of the company’s half century in business—$30 or so MSRP notwithstanding, of course. But really, most Padrón fans will probably be lighting up cigars from the Padrón Series, the company’s core line that generally costs under $10. This is what the company built itself on, not the $30 cigars and most certainly not $100 cigars. — PL.

SAVING TAMPA’S LAST (CIGAR) STRIPPERS

I will join Charlie Minato in his disappointment regarding the attendance at the legislative seminar, but we were both surprised to see how many people had embraced a campaign on the trade show floor by J.C. Newman to save the company’s factory in Tampa, Fla. Even under the much more favorable Option Two of the FDA’s deeming regulations, the vast majority—if not all—of what is made at that factory would not be exempt and as such subject to regulation and the associated costs. Retailers and fellow manufacturers seemed to create a steady stream towards a small table in the J.C. Newman/Arturo Fuente booth to sign a petition and get a pin that called on the community to “Save Tampa’s Last Cigar Strippers.”

The possible closure of J.C. Newman’s Tampa factory has unfortunately been one of the overlooked potential casualties of FDA regulation, and according to the company would mean the loss of 130 jobs and the closure of a factory that is over 100-years-old and the last remaining cigar factory of its kind in the country. While we were less than thrilled by the seminar turnout, our outlook was reinvigorated by the number of people we saw coming together in support of this cause. In addition, during the show, The New York Times ran a front page story regarding the factory and its uncertain future.

For more info about the campaign, visit SaveCigarCity.com. — PL.

WHO’S COVERING THE TRADE SHOW NEXT YEAR?

If you follow several cigar blogs, you’ve undoubtedly heard some grumblings about the IPCPR’s policy regarding requiring a membership, limiting pre-show access to the trade floor, and the overall time and cost it takes to cover the show. This year seemed to be a tipping point for some significant cigar blogs, as Stogie Review, Stogie Guys and Cigar Craig were not in attendance, all of which have been regulars at the show for years.

The recently formed Cigar Media Association (CMA), a group formed partially with the intent of credentialing cigar related websites, had a mixed presence, with about half of that organization’s membership in attendance according to our best guess. Any attempts at a recognized partnership from the IPCPR of the CMA can be described as “on hold,” although that might be generous. (Disclosure: halfwheel declined an invitation to join the CMA.)

From an online media perspective, the floor didn’t seem to have as many people with cameras, microphones and reporter’s notebooks as it did in years past, although there were plenty of new faces. It’s evidence to both sides of the argument about whether IPCPR is really worth it from a media perspective. We can vouch that covering IPCPR is not a cheap venture nor is it easy; it is expensive and labor intensive. But for us, it’s arguably the most important week of each year.

On the print side, there were a pair of notable changes, as Rich Perkins has stepped down from Tobacconist and Colin Ganley is no longer with Cigar Journal. Both were in Las Vegas, but it’s just another sign of the changing times in cigar media. — PL.

THE TRADITION OF THEFT

The IPCPR is a buying trade show for retailers. The IPCPR is a buying trade show for retailers. The IPCPR is a buying trade show for retailers.

That’s the message we as new media (and all IPCPR members for that matter) have been told time and time again as the comical debate continues about whether having coverage like halfwheel’s is important to the IPCPR trade show.

Every year, the aforementioned statement and reality produce something best described as “ironic performance art about humanity’s lower moments.” Lots of things get stolen at the trade show. Sometimes it’s an item for veterans (the signed-by-veterans Espinosa warhead), sometimes it’s prescription glasses, sometimes it’s the “o” off the Cusano sign, but most of the time it’s cigars, such as the Undercrown Flying Pig or just about every cigar on display in the Davidoff booth.

Not everything is stolen by retailers. But we’ve witnessed a few getting caught over the last few years and usually they are taking the same cigars that are given to retailers for free like candy at Halloween, and most the time, it’s the same cigars that retailers will complain about thieves in their stores stealing.

Fear not, the tradition of (some) retailers stealing things at the IPCPR trade show is alive and well. — CM.

ON RUMORS, AND TRUTH

Three different rumors trace its origin to this year’s trade show: a. General Cigar Co. is in acquisition mode, b. General Cigar will acquire E.P. Carrillo and c. Pete Johnson is selling Tatuaje.

We will write about the idea of acquiring cigar brands at the moment at a later date, but in short, the threat of FDA action makes this a bit more challenging. A spokesperson for E.P. Carrillo denied the family was selling the company and Pete Johnson laughed at the idea a sale of Tatuaje was imminent. Johnson did in fact say something about selling the company, as a joke to his sales reps before the show.

What’s interesting is that lost behind all this is some actual news regarding personnel changes. Nate McIntyre left his position at House of Emilio to join Cubanacan, which actually might say more about the latter than the former, as it’s clear Spence Drake and the Mederos family are planning on building a staff with some full-time employees.

Nat Sherman has also announced that it will be expanding its premium staff. Elsewhere, there were changes at CLELou Rodriguez and Total Flame and the recent announcement that Andrew Brennan will be leaving La Palina with at least one more change expected to be announced shortly. — CM.

GOOD SHOW
  • Padrón — Pretty much everyone attending IPCPR knew that Padrón would having something special in store for the company’s 50th anniversary, but only the company (and probably some folks from S.T. Dupont) knew just what that would be. Many retailers and media members made a beeline for the Padrón booth as soon as the doors opened and word quickly spread as the 1,000 humidors were snapped up. While we won’t know how the cigars are until later this year, it seemed nearly everyone we talked to mentioned them as delivering on the quiet promise to having something special this year. — PL.
  • Miami Cigar & Co. —  It was time to show off the company’s full rebrand and more importantly, sell the idea that the 25-year-old company was changing. They did just that and as such, in a year where many complained about foot traffic, the Miami Cigar & Co. booth was as packed as ever. — CM.
  • Fratello — There are many ways to look at what the trade show can do for a company in terms of getting it in front of a lot of people in a short period of time. Omar de Frias did that successfully last year, but where he really won was during the 360 or so days since last year’s show. This show was a reflection of his commitment to supporting the retailers that support him, as he seemed to have a good flow of traffic at the booth and good word of mouth about his commitment to growing the brand in a true rubber-meets-the-road fashion. — PL.
  • Casa Fernández — The decision to partner with Illusione on booth space brought much more attention to the cigar brand. Casa Fernández makes good cigars, it’s one of the benefits you have from being one of Nicaragua’s premier growers, but the company’s eponymous brand has struggled to gain as much tractions as its clients like Illusione. Moves like this, as well as the modifications to packaging for new lines like Aniversario and Arensio Oro are all steps in the right direction. — CM.
BAD SHOW
  • Sindicato — The new Sindicato Maduro is a good cigar. Perhaps it was entirely coincidental, but the dozen times I walked by the booth it was (about) empty. For those unfamiliar, Sindicato was started by a group of the country’s most powerful retailers made to take on cigar manufacturers and shake-up the industry. It did not seem to gain the traction with retailers who were not owners in the company over the last year and the trade show made that abundantly clear.  — CM.
  • Oliva — I still have not smoked the NUb Café, and I am actually looking forward to doing so, if nothing more than out of curiosity. However, a half dozen retailers mentioned at various points of the show that it was the “worst cigar they’ve smoked.” Most were not willing to qualify that with “worst cigar they’ve smoked at the trade show,” but rather, “worst cigar they’ve smoked this year.” Whether or not that is true remains to be seen, regardless, it is an obvious concern. — CM.
  • Palió — It’s pretty hard to say a relatively small but growing company could do worse than losing its distribution deal with a significant manufacturer in mid-July and subsequently not having a presence at the show, but that’s exactly what happened with Palió. When the deal was signed in February 2013, the main benefit was said to be maintaining quality control and developing new products; how the accessory maker deals with this hurdle will be interesting to watch in the coming months. — PL.

We covered over 70 booths at this year’s trade show. They were:

Finally, as part of this year’s IPCPR trade show coverage we gave readers a shot to win a box of Standard Issue from B.G. Meyer Co./Camacho. The winner of that prize is this comment from Texican8, for information about how to claim your prize, please click here.

Charlie Minato: I am an editor and co-founder of halfwheel.com/Rueda Media, LLC. I previously co-founded and published TheCigarFeed, one of the two predecessors of halfwheel. I handle the editing of our written content, the majority of the technical aspects of the site and work with the rest of our staff on content management, business development and more. I’ve lived in most corners of the country and now entering my second stint in Dallas, Texas. I enjoy boxing, headphones, the Le Mans 24-hour, wearing sweatshirts year-round and gyros. echte liebe.