November 05, 2006

Cigars Tried and True

cigars1.jpgA quick listing of the cigars that I have smoked. I quit smoking cigarettes back in January of 2004 (and still get tempted).

Let it be said up front that I am a schizo-smoker. A $1.25 El Producto is just as likely to be smoked as a $25 Cuban torpedo. I am prejudiced against all cigars and open to all as well.

Domestic Cheapies

Domestic Nice Ones

Real Cubans

American Cubans

Central America

Posted by keefner at 01:59 AM | Comments (0)

February 29, 2004

Fallen on Hard Times

Once a Quality Handmade Cigar, George Burns' Favorite Smoke Has Fallen On Hard
Times

by Edward Kiersh


When George Burns, Milton Berle, Sid Caesar, Ernie Kovacs and other top comics of
the day gathered at the Hillcrest Country Club, the room would fill with laughter and
cigar smoke. Everyone would be smoking the top brands. Everyone, that is, but
George Burns.

"Come on George, try one of these Havanas," urged Berle and Co. "Live a little. Get rid
of those damn Queens, and try something sweet and delicious."

But the patron saint of cigardom quickly turned down the Montecristos and H.
Upmanns thrust in front of him.

Waving aside these premium cigars, Burns again emphasized his loyalty to a lifelong
sweetheart. Taking out an ivory holder, he'd light an El Producto Queen, a perfecto-
shaped cigar that Burns liked to call "my little lady."

"I'll never smoke anything else," promised Burns, a 10-a-day El Producto man. "I just
love the taste of Queens. They never go out on the stage while I'm doing my act, and
besides, I get them for free."

Burns remained true to his word. Until his death last year, the Sunshine Boy rejoiced
each month when his shipment of 300 Queens, each packaged in a glass tube,
arrived at his Beverly Hills home. "He'd act like a child at Christmas time, smiling ear
to ear," recalls Sam Tuchten, the now-retired El Producto district manager who
brought Burns those cigars. "He was in seventh heaven. But god forbid if the
shipment was late. George would frantically call the company [Consolidated Cigar
Co.], and send his butler to Beverly Hills' drugstores to buy all the Queens he could
find."

That's where El Producto is still found: in undistinguished drugstores like Walgreens
and Thrifty. Once a handmade premium blend of Havana and Puerto Rican tobaccos,
enjoying such national popularity from the 1910s to the 1960s that even Elvis Presley
was wild about El P's Altas and Diamond Tips, Burns' "little lady" has since become a
pale shadow of her former self.

Now, machine-made El Productos have a short natural filler, while the wrappers and
binders are produced from either reconstituted or homogenized tobacco, commonly
called "sheet"--scrap tobacco ground into powder and held together with vegetable
adhesives (only the Queens and Escepcionales have an all-natural wrapper and filler).
The once hot-selling line of 14 shapes has been scaled down to nine shapes, and it's
no longer Consolidated's "flagship" brand. Although El Producto still registers about
$15 million a year in sales, the company's all-natural wrapper cigars far exceed that
figure. Today, Antonio y Cleopatras reign as the company's leading machine-made
cigar, with more than $30 million in sales, while El Producto has become the target of
in-house jokes.

"The brand is now a poor stepchild," says Jim Colucci, Consolidated's senior vice
president for sales and marketing. "El Producto was once a good, inexpensive cigar, a
real strong regional seller. It just got really hurt when we started to use homogenized
wrappers and additives. We then tried to dress her up a bit in the mid-1970s with
new packaging--a fluffy-haired blonde in a flaming-red dress and bouffant hairdo.
But modernizing the packaging never helped sales, and that blonde is still referred to
as the company bimbo."

Yet George Burns can rest easy. Hoping El Producto will benefit from the "halo effect"
of spiraling sales throughout the cigar industry, Consolidated is debuting a
commemorative "George Burns Collection" of four shapes this spring that restores
some of the brand's former luster. The cigars will have natural wrappers, either
Dominican or Honduran filler, and feature the original turn-of-the-century packaging
that pictured a serene-looking "little lady" sitting by a lake.

"We want to give El Producto a premium look with pretty cigar bands and return it to
the time when George Burns was singing its praises on TV," says Colucci. "All our
machine-made, natural-wrapped cigars grew over 20 percent last year, and in view of
El Producto's proud history, we feel it can also be a big winner."

Hand-rolled and made with the finest Havana tobaccos during the first half of the
century, El Producto has more than an illustrious past. Originally produced and
marketed on Philadelphia streets by an enterprising Russian immigrant named Sam
Grabosky, a grain broker turned savvy tobacco buyer, El Producto's hard-won success
encapsulates the American Dream.

But first came "Mr. Sam's" rough introduction to the hotly contested Philadelphia cigar
market. Landing in America in 1890, he struggled as a bunchmaker in a local cigar
factory. "All thumbs" and unable to make bunches uniformly, Grabosky brought the
bunches home, and his brother Ben worked through the night, making the cigars
presentable enough to be sold. After a few years at the factory, Sam Grabosky
became a tobacco broker. There was lots of money to be made in those days selling
scrap tobacco, and Sam quickly acquired a reputation as a shrewd, yet honest,
wheeler and dealer.

"My father sold so much tobacco to this company called 44 Cigar, his attorney
advised him, 'Sam, you have such a big stake in 44, you better manage it to protect
your interests,' " recalls 81-year-old Marvin Grabosky, Sam's last surviving son.
"Along with Ben, he eventually did manage that company, and they built it up real
fast. They soon had enough money to consider other ventures, to start their own
cigar making company."

While ambitious, and devoted to supporting his relatives, Grabosky had little
interest in starting a cigar company. Philadelphia was then a hotbed of competing
cigar manufacturers, and many had gone belly-up. But one afternoon in 1905 in a
store that bought labels from defunct cigar companies, Grabosky discovered the El
Producto label. The tobacco dealer offered him the rights to the brand, as well as
labels, boxes and bands, for $11.

Grabosky was apprehensive at first. But when he was shown a few boxes of cigars
marked with an El Producto logo, he quickly became excited by the prospect of
reviving a failed line. The sale was consummated, and with brother Ben's help, along
with two other investors, Sam formed the GHP Cigar Co. to give El Producto new life.

That iffy venture began with a joint investment of $50. The partners purchased a few
cigar tables and other production equipment. But after enlisting family members as
rollers, they still faced one key problem. There was little money left to buy raw
material.

The short and stocky Mr. Sam, though, was respected by other members of
Philadelphia's cigar making community. A quiet but compelling figure, known for his
tailored three-piece suits, avid card playing and fairness in all his business
transactions, Grabosky didn't have to fast-talk possible lenders. With only a
handshake, he got leaf dealers to extend him credit. Years later, when discussing his
rise to prominence in the industry, Grabosky said, "I was amazed that, even with my
having so little money, the dealers came to my support immediately."

But Grabosky needed more than money to survive in the early 1900s. To distinguish
El Producto from the scores of other 5-cent smokes made in Philadelphia storefronts
and small factories, this keen-eyed judge of tobacco leaf had to offer cigars that truly
lived up to such names as Bouquets and Escepcionales.

The filler for both cigars was a mixture of Cuban and Puerto Rican tobaccos, wrapped
in Connecticut broadleaf binders and shade wrappers. Besides the fat and pointed
Escepcionales (Grabosky's personal favorite, which sold for a then-pricey three for 50
cents during the 1920s), GHP also offered thin panatelas and blunts at 10 cents
apiece and coronas at 15 cents each. What made these cigars unique was their
consistent, nutty taste.

"That uniformity, my father's insistence on always blending the tobaccos the same
way, insured El Producto's success," says Marvin Grabosky. "The taste of most cigars
fluctuated back then, constantly becoming either too mild or robust for the
mainstream smoker. But by blending light- and dark-colored tobaccos from higher
and lower lands, my dad sold a cigar that was much different than anything on the
market."

Starting off by renting a two-story downtown building near the 2nd Street "cigar
market," GHP moved a few blocks down to a four-floor factory, and then to a factory
at 3rd and Brown. While facing stiff competition from such cigars as the 5-cent Bayuk
Phillies and the 10-cent La Palinas, the company grew so quickly that, by the First
World War, it had 36 factories in Pennsylvania, New Jersey and New York. By 1915,
that nutty-tasting uniqueness had made El Producto a Philadelphia phenomenon.

Grabosky filled his factories with tobacco, convinced that any oversupply would
protect the company against "all the vagaries of nature." The chief buyer of leaf for
GHP, he often traveled to Cuba and Puerto Rico, and on these expeditions "Mr. Sam"
was always prepared to dazzle crop growers. He was a tough negotiator, quick to
raise his voice in bargaining sessions. And, according to his grandson, Jack Grabosky,
he'd seal a deal by unbuttoning his shirt and paying for tobacco with gold bars that
were strapped around his waist.

While Grabosky "knew exactly what to look for when judging the color and grain of
tobacco," according to Jack Grabosky, he was even more savvy when it came to using
modern-era promotional strategies. Though initially averse to advertising on the
newfangled radio, he quickly overcame this reluctance, and hired "Doc" Kinett, a
University of Pennsylvania communications professor, to shape a broad-based
marketing campaign. This cutting-edge promotional effort, begun around 1920,
produced radio jingles, billboards and newspaper ads, as well as films shown at in-
house company meetings that featured pointers on displaying and selling cigars.

America had rarely seen such a sophisticated, full-pronged ad campaign, and
those promos made El Producto the top seller in major markets such as Chicago,
Boston and New York. By the First World War, when El Producto was battling Dutch
Masters for supremacy, Ben Grabosky supervised about 20 salesmen in each of those
cities. While sales figures are unavailable, one family member insists, "These men
worked their tails off. El Producto was so popular, even a [brand] like Life-Savers
hooked their star to us. They ran newspaper ads next to ours, saying 'Make the Next
Smoke Taste Better.' "

El Producto's success allowed Sam Grabosky to become a major philanthropic
figure in Philadelphia and, as his son Marvin says, "to set up all his children (six sons
and three daughters) in big houses." But success was tempered by tragedy; in 1918,
his son Jack, a salesman, fell victim at age 23 to the great flu epidemic. The loss left
Sam brokenhearted, and while continuing to be GHP's master blender, ever found in
the company's humidor rolling sample cigars, he lost a bit of his fervor for the
business.

GHP's fortunes still soared in the Roaring Twenties, and by 1926, El Producto had
established dominance over Dutch Masters in several key Northeastern and
Midwestern markets. Rather than continue that losing fight, Dutch Masters' parent
company, Consolidated Cigar, chose another strategy: it offered to buy GHP for $11
million.

Though Grabosky was still mourning the loss of his son, he was not eager to
relinquish control of his cigar business. But by this time he recognized that cigarettes
were gaining new popularity, and that increasingly vocal women were growing more
critical of cigar smoking. His son Harry, a recent graduate of the Wharton business
school, also urged him "to get into something new." After weighing all of these
factors, along with his love of cigar blending, Grabosky finally decided to accept
Consolidated's hefty offer.

Under the terms of that agreement,which allowed GHP to function as an independent
subsidiary with its own salesmen and production facilities, Grabosky was prohibited
from starting another manufacturing company. But acknowledging his expertise in
the selecting and buying of tobacco leaf, Consolidated hired him to supervise the
purchase and blending of El Producto, Dutch Masters and their other Cuban-Puerto
Rican cigar, La Palina.

"El Producto was my dad's baby, and he continued to help it grow until the 1930s,"
says Marvin Grabosky. "But he also wound up buying tobacco and making the blends
for all the Consolidated cigars. He just had this knack for reading the market,
knowing what to buy and when."

Yet a new--and stormy--era was beginning for El Producto. Consolidated issued
yearly store displays (with the long-standing slogan, "For Real Enjoyment") in the late
1920s and instructed salesmen on how to set up cigar store cases with a "fine three-
way lineup" of Puritanos Finos, Bouquets and Blunts. During the Depression years the
company also implored employees to show a "fighting" spirit to counter lagging sales.
But since the GHP Cigar Co. existed as a separate production entity under the
Consolidated umbrella, with its own distinct sales force, that fighting was taken to
nasty extremes over the next three decades.

Bitter in-house rivalries developed, as the Dutch Masters and El Producto
salesmen used various tricks and strategies to snare retail shelf space. "It was all-out
war between us, and we were out to kill Dutch Masters by whatever means
necessary," says Lew Myers, who began selling El Productos in the 1940s and, like his
father before him, stayed with the brand for 40 years.

"We owned places like Philadelphia, New York and Boston," says Myers. "To keep
it that way, we'd take sharp pencils and put holes in Dutch Masters cigars. Made it
look like [mites] had gotten into them. We'd also put our boxes on top of theirs, bury
the Dutch Masters in store cases. We did all sorts of unsavory things, and they did the
same to us."

During this battle for market share, the El Producto forces focused on urban
areas. Some regions had specific preferences: "The 48-ring guage Escepcionale did
nothing in New York," Myers says with a laugh. "Yet in Texas, where guys liked big
cigars, that all-day sucker was king." Dutch Masters, meanwhile, became a more
"national" smoke during the 1940s, easily found from California to Florida in the
nation's smaller towns.

To solidify that national appeal in the 1950s and '60s, Dutch Masters lined up Ernie
Kovacs, Danny Thomas and Sid Caesar to do TV spots, while the now machine-made
El Productos were promoted by George Burns. But even as these two rivals slugged it
out, budget-minded executives cut corners by utilizing "sheet" instead of natural
binders, and generally gave both brands an unmistakeable uniformity.

"Both El Producto and Dutch Masters were interchangeable after a while," ruefully
recalls a former El Producto salesman. "While each brand had a few distinct shapes,
both cigars had the same taste, the same blend of tobaccos. The factories just packed
them in different bands and boxes."

But "Much Dasters," as Kovacs liked to call them on television, drew a bigger
advertising budget than El Producto. Joe Kissinger and other GHP salesmen resented
this "inferior, stepsister treatment," and their feelings were further ruffled when
Consolidated acquired Muriel cigars in 1956. Besides heavily promoting Muriels with
Edie Adams' "Pick Me Up and Smoke Me Sometime" commercials, Consolidated asked
the once-independent GHP salesmen to also sell Muriels, which had its own sales
force as well.

In 1968, Gulf & Western purchased Consolidated, and to promote greater efficiency
during an era of plummeting sales, it merged the El Producto and Dutch Masters'
sales forces. The House Grabosky Built (Sam died in 1953) was now in the hands of
"bankers," recalls Dave Goldfarb, another 40-year veteran at Consolidated. "They
knew nothing about the cigar business and just picked off the profits."

Gulf & Western's continued to slash operating expenses in the 1970s. Joining the
company back then, Jim Colucci recalls it was "cut, cut, cut," and the budgetary moves
particularly affected El Producto, as G&W increasingly pulled the plug on all the
brand's advertising.

"These were tough times in the industry, and deciding to emphasize Dutch Masters as
the true national brand, G&W totally gave up on El Producto," says Colucci. "While it
once had a $3 million ad budget, El Producto took a big hit every year. I tried to fight
for more El Producto presence but it went unheard. All the money went to putting
Dutch Masters on [ABC's] 'Monday Night Football', while El Producto got the leftovers
for a few spots on bowling telecasts."

Combined with the 1960s consolidation of the sales forces (which meant the closing
of many El Producto distribution facilities), the advertising cuts had a devastating
effect on sales, especially in markets where El Producto didn't have a strong regional
following, as in California. Salesman Joe Kissinger estimates that 35 percent of the
brand's business was lost on the West Coast (20 to 25 percent nationwide), and
ruefully adds, "Cutting the advertising just guaranteed the diminishing of the cigar."

But even more trouble loomed for El Producto. What one sales rep calls "a death blow
for the cigar" was leveled once Gulf & Western divested Consolidated in 1982 to five
of the cigar company's senior managers. Again looking to cut costs, the Consolidated
executives decided to produce the majority of El Productos (except for the Queens
and Escepcionales) with a reconstituted "sheet" wrapper. They insisted this wouldn't
affect the taste of the cigar, or how it felt in a smoker's mouth. Disagreeing, Colucci,
then Consolidated's western region sales manager, felt the use of a homogenized
wrapper would mean "the beginning of the end" for El Producto. But "sheet" was the
trend in the early '80s, as White Owls and Phillies had also begun to use synthetic
wrappers, and so his protests went ignored.

Sales soon plunged. In 1982, El Producto sold more than 200 million cigars. That
figure dropped to 132 million in 1984, 117 million in 1985, 83 million in 1990 and to
50 million by '95.

Part of the decline was due to the industry's overall skid in the late 1980s. Yet as
Colucci says, "Consumers simply didn't like the synthetic, tobacco-substitute stuff. So
we took big hits every year, a 25 percent dip in units the first year, then 12 percent,
15 percent declines. It was the wrong move, just a terrible decision to go to sheet,
and El Producto got killed."

Now Colucci is trying to undo that wrong and to shape El Producto's revival.
Working with George Burns' estate, and possibly utilizing a Forrest Gump-styled
promo from Burns about El Producto's charms, Consolidated is launching four
natural-wrapped shapes this spring, priced from about 75 cents to $1.25 for a glass-
tubed cigar.

Colucci realizes "it'll be a slow build" to restore El Producto's reputation as a
quality machine-made cigar. But he's still confident this "premium-looking George
Burns' Collection" will be faithful to the cigar's storied tradition and to the spirit of
Sam Grabosky.

"It's time to correct the past mistakes, the wrong turns that were taken with this
brand in the 1970s and '80s," says Colucci. "I told George [Burns] years ago that El
Producto merited better treatment, that we should do something special with his
beloved cigars. Now I want to keep my promise to him, and to his 'little lady.'"

Posted by keefner at 06:40 PM | Comments (0)