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Quarter 4, 2009

Q & A
An interview with Enrique “Don Kiki” Berger of Cuban Crafters

by Evan Dashevsky

Enrique Berger’s (most know him as “Don Kiki”) father, Max Berger escaped from Poland in the early ‘40s and escaped to Poland. Max established himself as a cigar maker with several farms and factories throughout Cuba. Nearly 40 years ago, Max fled Cuba with his young son to the US. And now, over half a century later, Don Kiki has taken over the family business with his successful Cuban Crafters brand which is based in the US, but has farm and production facilities in Nicaragua. And now Kiki is turning to Europe to introduce that Cuban-cigar loving continent to a new alternative. We caught up with him at this year’s past EuroTab fair held in his father’s homeland of Poland to talk about his company and why Nicaraguan cigars will thrive in Europe.

Tobacco Products International (TPI): Tell my a little about Cuban Crafters.

Don Kiki (DK): We are Cuban Crafters cigars, out of Miami, Florida. We are also Esteli Cigars, which is our factory in Nicaragua. That’s where we grow our tobacco in our fields. And also where we cure our tobacco and manufacture our cigars. In other words, we’re a complete cigar company - from the fields, straight up to distribution.

TPI: Your opening into Europe now, but is the US still your biggest market?

DK: Our biggest market is the United States, yes.

TPI: How long have you been distributing to Europe?

DK: We started a year ago. And we started with our partner company in Europe. And we started manufacturing cigars for different companies. One of the products we started manufacturing in partnership with 3F Prague is Demonio. It’s a private label. It’s taken off in the market and is doing very well.

TPI: That’s a Nicaraguan puro?

DK: It’s a Nicaraguan puro from my farms. We’re also making some cigarillos for them under the Demonio name. Right now they’re for the Czech market, but we’re trying to move it into other markets - like Poland. That’s why we’re here at EuroTab. So far the show’s been very good. People are very interested in it. They also represent some of our brands here in Europe - the Salazar, Cuban Crafters, the Don Kikis - these are some of the main brands from our mother brand.

TPI: Is everything you make Nicaraguan Puros?

DK: Most, but not all. We also have ones with different wrappers - with Ecuadorian, with Brazil, with Dominican - from all over the world. We have a large diversity of wrappers. But they’re mainly used in our premium.

TPI: Do you do cigarillos or machine-made products?

DK: We do make cigarillos too. But no machine-made. Everything is premium hand-rolled.

TPI: And you said your facilities are in Esteli, Nicaragua?

DK: Yes, we have our farm and our factory in Esteli. We just recently opened a smaller factory for all our premium cigars. Also in Esteli.

TPI: And you do cigar accessories as well?

DK: We’re one of the largest importers of accessories for cigars from China to the US. We’re the largest in humidors and cutters. In the last year we came out with a cigar cutter called the Perfect Cut - we’re already sold over 2 mn of them. We had to trademark and register it because people were trying to copy us. Whenever I would go to a cigar event, people would always ask me - how much should I cut off the head of a cigar, so we create this cutter that only allows the cigar to go so far in and will give you the perfect cut. We’re going to bring these into Europe. Along with some of the humidors as well - we’re very competitive on the humidor price in Europe. We have found a lot of new stores that compare prices at the shows, and they come back and buy humidors from us.

TPI: Why are you pushing into the European market now?

DK: I think Europe for us is an open window. I think it’s a great opportunity. We realize that a lot of our competition is not really paying attention to the European market. So, it’s a good opportunity for us to build a name here, in Europe. I think there’s going to be a hole or space if Cuba opens up to the US - which I think is a real possibility with Obama now. And if that happens, Cuba will not be able to make enough cigars for the United States and Europe. Now, we must remember Cuba is only 90 miles from the United States, so the Cuban market is going to go to the US, and we’re going to have a major problem in Europe getting Cuban cigars. So, I think now it’s a good opportunity for us to build our name, start bringing fine, quality cigars, investing into Europe. As we get into every store and in every shelf, we’re going to have the advantage over those who come in at the last minute.

TPI: How has it been trying to convince Cuban cigar loving Europeans to try other cigars from, say, Nicaragua?

DK: It was very difficult - in the beginning. But we have two things: we have given them cigars to try and we have given them the price. When they can buy a cigar for less than half the price, and the quality is better than Cuban cigar brands are - they get totally convinced. I think Cuban cigars are good cigars, I also think they’ve had a lot of deficiency in the last few years, due to mainly weather, hurricanes and the like. I think Nicaragua has been able to maintain better quality, better tobacco. I think we’re in the perfect moment. I think this is the perfect time to move into Europe.

TPI: Have you noticed a difference in what European smokers are looking for as opposed to the American palates you’ve been dealing with up until now?

DK: Europeans like the medium-bodied cigars. But I have realized that the US market kind of foreshadows Europe now. Europeans have been asking for maduro cigars. Whereas Maduro used to be a big no-no in Europe. Cuban never had maduro, but now you see them asking for maduros and thicker gages. I think Cuban cigars will always have their place in Europe. You would have to be blind not to realize that. But I think there is a big market opening up with a lot of new smokers in Europe.

TPI: Do you think there’s a difference between Western and Eastern Europe as far as tastes go?

DK: It’s still too early for me to tell at this point. But what I have found is that they’re all looking for what’s new - something different. I think they’re looking to have something different than just a regular Cuban cigar. I think that is what has brought a lot of interest in our Demonio brand. Already at this show, we have found other people are interested in the Nicaraguan cigars. There is something very important that people don’t understand and don’t know - Nicaragua and Europe have an agreement, Nicaragua can bring in the icgaras and have no tax coming into the European Union which is a tremendous value to us. That gives us an advantage. A lot of countries behind the Iron Curtain are learning about they way the US and Western Europe have been handling marketing and stores for the first time. All these things are starting to change in Europe. I think shows like this are helping move things along.

Tobacco Products International - Quarter 4, 2009
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