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News: Swisher Seals Deal to Buy Drew Estate

21 Oct 2014

Yesterday, Drew Estate and Swisher International announced an agreement had been finalized for Swisher to purchase Drew Estate. The announcement comes after over a month of intense rumors of the deal, including denials of a finalized deal by Jonathan Drew.

swisher-drew-estateSwisher is the largest cigar company in the world by volume and has a massive distribution network beyond traditional cigar shops. Drew Estate runs the largest cigar factory in Nicaragua—producing around 10,000 cigars a day—and owns heralded premium cigar lines including Liga Privada, Undercrown, My Uzi Weighs a Ton, Nica Rustica and Herrera Estelí, along with premium infused cigar lines including the best-selling Acid.

The deal, which will be completed before the end of the year, includes the Nicaraguan facilities and Drew Estate’s cigar lines. Monetary terms of the deal were not disclosed. Since both companies are privately held, details (including Drew Estate’s valuation) may never be known.

According to various reports, senior management from Drew Estate—co-founders Jonathan Drew and Marvin Samel, President Michael Cellucci, and master blender Willy Herrera—will all stay on, at least in the near term.

Jonathan Drew issued the following statement: “We began under the Manhattan Bridge Overpass in Brooklyn with a laser focus on ‘The Rebirth of Cigars.’ Friends, retailers, and consumers connected with our passion and authenticity, supporting us at each stage of our growth. We are eternally grateful to all of those who have helped build Drew Estate, and look forward to advancing the Drew Estate legacy with a great partner.” Other executives praised the agreement in a press release published on Drew Estate’s website.

Analysis

When a business is bought by larger company it’s natural for fans to be worried. Still, there are plenty of reasons for Drew Estate fans to think, despite the uncertainty of the shakeup, this may be a good thing for Drew Estate and the cigars its fans enjoy.

Drew Estate hasn’t hidden the fact that it had taken on significant debt to expand to its current size, including from other cigar companies. At least one such loan was tied to $5 million seized by the ATF as part of a settlement over back taxes reportedly owed by House of Oxford, a cigar distributor run by Alex Goldman, who was put in charge of Swisher’s premium cigar division. (Nothing illegitimate was alleged to have been done by Drew Estate and the case has now settled.) Goldman was also instrumental in having Drew Estate make Nirvana for Swisher’s Royal Gold premium cigar venture, a line that will presumably be merged into Drew Estate’s operations.

The agreement for Swisher to buy Drew Estate will presumably end any outstanding debts and allow Drew Estate to continue expansion with Swisher’s significant resources. Drew Estate can now refocus on making its cigars and innovating, something it has done remarkably well over the past few years.

It’s also worth noting that while FDA regulations are a looming threat to the entire handmade cigar industry, they are especially a threat to Drew Estate, whose infused/flavored lines will likely be hit hardest by FDA regulations. Swisher certainly knows this, which means it is likely to invest the funds necessary to promote Drew Estate’s brands no matter the impact of FDA regulations.

Finally, you can’t talk Drew Estate without Jonathan Drew. Anyone who has spent time with Jonathan knows he has a deep passion for cigars and his customers. While sometimes he may seem to be burdened by the business of cigars, there is no doubt he brings a unique energy and the spirit of innovation.

Drew and his partners built Drew Estate from a cigar kiosk in the World Trade Center to one of the largest cigar companies in the world, which is a remarkable feat. And Jonathan feels this deal is good for Drew Estate, which is his legacy.

Unless evidence presents itself to show otherwise, this deal is good not only for Drew Estate’s owners, but also for its customers.

-Patrick S

photo credit: Drew Estate

Quick Smoke: La Dueña Robusto

19 Oct 2014

Each Saturday and Sunday we’ll post a Quick Smoke: not quite a full review, just our brief verdict on a single cigar of “buy,” “hold,” or “sell.”la-duena-rob-sq

 la-duena-rob

I very much enjoyed La Dueña (made and distributed by My Father, but blended by Tatuaje’s Pete Johnson) when it was first released, although I haven’t had many recently. The cigar features a Connecticut Broadleaf wrapper around Nicaraguan binder and filler tobaccos . This Robusto has the same flavors I remember from past La Dueña cigars (sweetness, earth, and cocoa) but with far less intensity. It’s still medium-bodied but bogged down with slightly damp flavors that detract from the overall experience. Considering I know this blend can be better (the Petit Lanceros I’ve smoked have consistently been very good) this Robusto was disappointing.

Verdict = Sell.

-Patrick S

photo credit: Stogie Guys

Cigar Review: Viaje Cache

16 Oct 2014

viaje-cacheViaje Cache’s name refers to two things: First, we’re told it has tobacco selected from a “cache” of select, well-aged leaves at the TABSA factory in Nicaragua, where it is made. Second, in a box of Viaje Cache cigars you get 20 traditional round parejos, but underneath you’ll find a hidden layer of five box-pressed cigars.viaje-cache-sq

Both the box-pressed and parejo versions measure 5 inches long with a ring gauge of 52. They feature a Mexican maduro wrapper around Nicaraguan Aganorsa binder and filler.

For this review, I smoked four of the round parejo versions. If, like me, you purchase a five-pack, you’re likely to get the non-box-pressed version, as there are four parejos for every pressed Cache made.

The band is not like the traditional Viaje band, at least on the surface. I couldn’t verify since I’m not in a college dorm room, but apparently if you put the band under a black light you’ll find a hidden logo.

The wrapper is nearly black with plenty of oils. Even before you light up, it’s obvious the Cache is well-constructed. Firm to the touch with a tight draw, it has excellent combustion and a solid, light gray ash.

Once lit, the Cache is dominated by dark charred oak notes. There’s also plenty of dry, powdery earth and unsweetened cocoa. The full-bodied flavors are mostly consistent from start to finish, although a little red pepper spice starts to reveal itself towards the end.

Viaje can be hit or miss for me, but this is definitely a hit in my book. It’s very rich, with thick smoke that coats the palate with a dry, distinctive flavor. Viaje owner Andre Farkas has said, depending on the response, Cache may be a more regular offering. I certainly hope it is. Excellent construction, rich flavors, and a unique profile make the Viaje Cache a standout that earns a rating of four and a half stogies out of five.

[To read more StogieGuys.com cigar reviews, please click here.]

-Patrick S

photo credit: Stogie Guys

Quick Smoke: Jaime Garcia Reserva Especial Robusto

12 Oct 2014

Each Saturday and Sunday we’ll post a Quick Smoke: not quite a full review, just our brief verdict on a single cigar of “buy,” “hold,” or “sell.”Jaime-Garcia-RE-sq

Jaime-Garcia-RE

My Father Cigars makes many outstanding cigars, which might make the Jaime Garcia Reserva Especial a slightly under-the-radar offering. The Connecticut Broadleaf-wrapped Robusto (5.25 x 52) has Nicaraguan binder and filler tobaccos. It features rich, smooth flavors with powdery earth, dark chocolate, and oak notes, along with excellent construction. The Jaime Garcia Reserva Especial doesn’t feature much spice, but it does have lots of classic deep maduro flavors, and even though it’s not the most complex cigar, it’s still quite enjoyable.

Verdict = Buy.

-Patrick S

photo credit: Stogie Guys

Cigar Spirits: Glenfarclas 105

9 Oct 2014

When it comes to spirit pairings, I’m an unabashed fan of bourbon and rye. No matter the season, fine American whiskey works.Glenfarclas-105-sq

Glenfarclas-105As for other spirits, I’m more seasonal in my preferences. The tropical-influenced rum is ideal for the warmer months, but when it gets a little cooler I’m inclined towards scotch whiskey.

Something about the smokey, warming qualities of a single malt hits the spot. And yet, all that time with American whiskey has left me finding most of the 80- or 90-proof scotch lacking in intensity.

Fortunately, a few scotches have a higher proof. And lately, cask-strength scotches have become some of my favorites. (Unlike American whiskey, where cask-strength can mean 130-proof or higher, cask-strength single malt tends to be in the 110-120 range.) Glenfarclas 105 is one of those cask-strength single malts, weighing in at a hearty 120-proof (60% ABV). Its Highland distillery is one of the few truly independent distilleries left in Scotland, and also one of the few that produces a cask-strength scotch that is readily available in the U.S.

Glenfarclas ($80-90) has a deep golden color. The nose is an inviting combination of toffee with pear and cherry fruit.

On the palate, Glenfarclas really shines. It’s multi-layered on the palate with more pear, lots of sherry, and a slight smokiness. It has a nice, full-bodied creaminess, and a finish that fades off nicely with oak and subtle smoke.

The 105 is very even-keeled for 120-proof. It has plenty of intensity without being over the top. The richness of sherry with a champagne-like balance.

Drink it with a medium- to full-bodied cigar. Think a Cabaiguan, Davidoff Colorado Claro, Intemperance, or Tatuaje Black.

I’m sure cask-strength single malt isn’t for everyone. But if, like me, you like higher proof bourbons and ryes, but still find the smokiness of scotch up your alley, give the Glenfarclas 105 a try.

-Patrick S

photo credit: Stogie Guys

Commentary: Are Proposed FDA Regulations Pushing Industry Consolidation?

7 Oct 2014

Damocles-Westall

Finalized FDA rules for regulating cigars are many months away, but they still hang over the industry like the Sword of Damocles.

It’s safe to say that looming FDA regulation is encouraging industry consolidation. The risk involved in developing new cigar lines is no longer just that consumers won’t buy enough of your cigars at a price where you can turn a profit.

The bigger risk now is the government might render your product illegal, or at least subject it to an incredibly burdensome, lengthy, and expensive approval process. So if you don’t want to bet the house on the FDA rules not being overly burdensome, now is the time to sell.

Surely impending regulation isn’t the only reason the Toraño and Leccia Tobacco lines were acquired by General Cigar, but it had to have been a factor. I’ve heard Toraño has had success with its value-oriented lines Brigade and Loyal. These are the lines most likely to be hit by FDA rules, even if they include a more reasonable price exemption than originally proposed.

Sam Leccia was critical in developing innovative cigars like Nub and Cain for Oliva, before splitting with the company in a legal spat that went ugly. His new cigars included Leccia Black, which was one of the first cigars to sport fire-cured tobacco. The problem is, under an FDA approval regime, innovation is a risk that would make potential approvals more difficult. (Whether the use of fire-cured tobacco would count as a characterizing flavor under proposed FDA rules is an open question.) And the less money you have for scientists, lawyers, and lobbyists to push a new product through the approval process, the bigger the risk it is.

Which brings us back to General Cigar and other large companies (Altadis USA, Davidoff) who might be buyers. While they all oppose FDA regulation and would likely feel its bottom-line effects, large companies are nearly always better able to adapt to government regulation than their smaller competitors. (Sadly, this is why cigarette giant Phillip Morris broke from the rest of the industry to back FDA tobacco regulations to begin with.)

With the rumor mill churning about other possible consolidations, it’s fair to ask if this is positive or negative for the industry. While initial reactions to a smaller company being bought by a larger one are usually negative, I’d argue on a whole the results have been good.

Perhaps counter-intuitively, cigar industry consolidation has often led to more competition. Large companies have every reason to continue and maintain popular brands they shell out big bucks for. While frequently the seller would use the proceeds to launch a new, smaller, and more niche company (think Ernesto Perez-Carrillo or Christian Eiroa) as their non-compete agreement runs out.

What’s worrisome to me is not that more small companies may be bought by larger ones. Rather, the concern is the talent being bought out may not choose to reinvest in the cigar industry because of FDA rules that favor big companies.

-Patrick S

photo credit: Wikipedia

Quick Smoke: La Flor Dominicana Cameroon Cabinet No. 5

5 Oct 2014

Each Saturday and Sunday we’ll post a Quick Smoke: not quite a full review, just our brief verdict on a single cigar of “buy,” “hold,” or “sell.”LFD-Cameroon-Cab-No-5-sq

LFD-Cameroon-Cab-No-5

I consider the Cameroon Cabinet line to be La Flor Dominicana’s most underrated cigar, likely overlooked because it doesn’t fit into the same full-bodied profile the company is known for. The robusto-sized No. 5 features the same woodiness and light spice that I’ve come to enjoy from this line, but it lacks some of the cream and cocoa depth that made the No. 1 size my favorite. Construction is excellent. Maybe time will bring out the some added complexity in this robusto, but for now I couldn’t recommend the No. 5 ahead of he lonsdale-sized No. 1.

Verdict = Hold.

-Patrick S

photo credit: Stogie Guys