Skip to main content
Strategies
Business Observer Thursday, Jan. 27, 2022 4 months ago

From the ashes: Cigar maker embraces change while honoring traditions

Share
Family feuds, supply problems and government regulations have bent but not broken the last bastion of Ybor City's cigar industry. But the firm is determined to thrive, not just survive.
by: Brian Hartz Tampa Bay Editor

It’s been said that change is the only constant, but like any rule, a few notable exceptions can be found. One  is J.C. Newman Cigar Co. Established in 1895, the Tampa cigar maker has been continuously owned and operated by the Newman family, first in Ohio and then, starting in 1954, at the El Reloj factory in Ybor City, where it has 155 employees.

Life was a lot different in 1895: Grover Cleveland was president of the United States; George Vanderbilt II opened the Biltmore Estate in Asheville, N.C.; and George Selden obtained the first U.S. patent for the automobile. It’s also the year Hungarian immigrant Julius Caesar Newman launched his own cigar manufacturing business.

Today, J.C. Newman Cigar Co. produces 60,000 premium cigars per day, some of them 100% hand rolled. It has survived the Cuban embargo, an industry swoon in the 1980s and pressure from government regulators. In addition to Tampa, it also operates in Nicaragua, where it has 800 employees.

“We still roll cigars by hand, just like my great-grandfather did a hundred years ago,” says fourth-generation family member Drew Newman, 40, who, in addition to running the company alongside his father, Eric Newman, and uncle Bobby Newman, is its general counsel. “The process hasn’t changed.”

What has changed is J.C. Newman’s competition. At one point in time, there were more than 150 cigar companies in Tampa, a.k.a. Cigar City. Now there’s just one. That was a wake-up call for Drew, Eric and Bobby, who collectively decided they needed to do more than just survive. They needed to — dare we say it — change.

“For 100-plus years, we had rolled cigars and minded our own own business,” Drew says. “We stayed in our lane and did what we did. But then we realized that, as the last cigar company here, we had an obligation not only to keep the factory going, but to tell the story of Tampa and the cigar industry to visitors and future generations, to keep the very important cigar-making tradition alive.”

“We buy tobacco in Connecticut from an eighth-generation family farmer, and in Pennslyvania we buy from Mennonites who’ve been growing it since the late 1600s. We’re a family business in an industry of family businesses.” Drew Newman, J.C. Newman Cigar Co. 

As part of that effort, J.C. Newman renovated El Reloj and opened it up for tours, and created an event space that’s become a popular venue for weddings (26 are booked already, Drew says). It also added a museum and interactive theater to the factory’s visitor-friendly amenities.

The additional revenue streams have helped the firm purchase, for $600,000, the historic but badly dilapidated Sanchez y Haya hotel, located directly across Columbus Drive from El Reloj. Built in 1910, the run-down hotel is now home to a colony of 10,000 bats — which will be relocated later this year to purpose-built bat houses on a nearby vacant lot, owned by J.C. Newman, that will be turned into a park.

Rather than tear down the hotel and rebuild it from scratch — “that would be far cheaper,” Drew says — the company is planning an extensive renovation and restoration process that will return the hotel to its original use while adding a restaurant and cigar lounge. It’s also formulating plans for some of the other nearby vacant commercial and residential lots it owns.

“The building has tremendous character,” Drew says, “but it’s falling apart.”

In addition to the restoration of the Sanchez y Haya hotel, J.C. Newman also plans to open a cigar rolling school at El Reloj. The end result, says Holden Rasmussen, who helps manage the museum and factory store, in addition to serving as the company’s resident historian, will be “Disneyland for cigar aficionados.” He adds, “We’ll also be doing all sorts of living history events. This whole place is going to be the El Reloj District. It feels like we’re coming into something on the ground floor.”

LOOK TO THE PAST

Apart from TVs, Wi-Fi routers, security cameras and a few other modern office touches, today's El Reloj could easily have come from a time capsule buried in 1954. Cigars, which retail from $4 to $20 depending on the brand, are either hand rolled or made using complex, bulky machines that stopped being produced in the 1940s. The devices are so rare, actually, that J.C. Newman has its own machine shop for repairing them and fabricating replacement parts, which can’t be sourced from anywhere else in the world.

In another room, a different set of machines remove the center veins from tobacco leaves, and yet another set packages finished cigars in plastic wrappers.

Mark Wemple. Drew Newman, an attorney by trade, fights for cigar industry rights in Washington, D.C. in addition to helping run the family business.

Before any production can happen, however, J.C. Newman has to source tobacco. Cigars use a specific type of tobacco leaf that’s not used in cigarettes. Maintaining a steady supply, most of which comes from Massachusetts, Pennsylvania and Rhode Island, can be a challenge. Another hurdle? The leaves have to be aged for three years in burlap sacks in the factory basement, so a bad crop can disrupt the firm’s production.

“The number one cash crop in Rhode Island, in terms of dollar value, is tobacco,” Drew says. “No one would’ve guessed. We also get some from Indonesia, Nicaragua and Cameroon.”

Much like wine grapes, the flavor of cigar tobacco is heavily influenced by soil and climate, so J.C. Newman, for the sake of consistency, likes to buy from the same suppliers.

“We buy tobacco in Connecticut from an eighth-generation family farmer, and in Pennsylvania we buy from Mennonites who’ve been growing it since the late 1600s,” Drew says. “We’re a family business in an industry of family businesses.”

J.C. Newman has not been immune from supply-chain problems that have disrupted global commerce: It’s been increasingly difficult to source tobacco from Indonesia, for example.

“It’s been hard to get a container ship out of Asia," Drew says, "but thankfully there have been no issues in Central America and the Caribbean.”

Another challenge? Unpredictable weather can ruin an entire crop, which is what happened in early September 2021, when the remnants of Hurricane Ida thrashed the Northeast. “Right when the leaves were big, it tore through the crop,” Drew says. “That means three years from now, we’re going to have some tobacco problems. We can’t take a 3D printer and make tobacco leaves.”

Drew says Mother Nature often helps offset supply-chain problems caused by bad harvests, and with 125 years of experience , the company has gotten pretty good at making do with what it has on hand.

“In general, within an eight-year period, we get two great crops, two terrible crops and four average crops,” he says. “The 2021 crop was terrible, but the 2020 crop was excellent. So we’ll take the leaves from 2020 and use them in the 2021 blend. That’s one of the benefits of aging our tobacco — it gives us the ability to smooth out natural differences.”

TOO MANY COOKS IN THE KITCHEN

As J.C. Newman Cigar Co. — and the Newman clan itself — grew, more and more family members got involved in the business. At one point, Drew says, 13 Newmans had ownership stakes in the company — and everyone wanted their piece of the pie. The situation came to a head in the 1980s, during a major slump for the cigar industry. In 1986, as financial pressures mounted, Eric and Bobby Newman, along with Stanford Newman, Drew’s grandfather, bought out the other 10 kinfolk.

“With a declining business and lots of relatives trying to live off the business, it was really stressful,” Drew says. “The company was worth pretty much nothing. My father, uncle and grandfather mortgaged their homes, borrowed money and put all their chips on this business. Then in the mid-1990s, there was a resurgence in interest in cigars, and a resurgence of people who are interested in old-school, old-world, artisan businesses, whether it’s craft brewing or craft cigars.”

The lesson? Sometimes family can be too much of a good thing when it comes to running a business, and there can come a time when difficult but necessary conversations should take place.

“If you talk to my father or uncle,” Drew says, “they’ll both say that was the defining part of their story, our family story — the buyout in 1986.”

The move helped J.C. Newman right the ship, and although growth since then has been incremental, Drew, who declines to disclose specific revenue figures, says the firm is OK with that.

“We grew 8% last year and 7% in 2020,” he says. “For us, that’s huge. It’s hard for us to scale up and scale down, so any growth is great. We want to grow, but small, measured growth has been the key to our 126 years of success.”

FIGHT THE POWER

With family matters resolved, headwinds facing J.C. Newman now come from another source: Washington, D.C. As general counsel, Drew splits his time between New York, Tampa and the nation’s capital.

“He’s been up there fighting for cigar rights and fighting the good fight,” Rasmussen says. “And now he’s come home to take charge of the family business.”

Drew says he’s spent a lot of time in discussions with U.S. Food and Drug Administration officials over the years, “getting them to recognize that different types of tobacco products have different characteristics.” The effort has paid off, because the FDA now views “tobacco products on a continuum … so our ask of the FDA is to tailor the nature of regulation.”

Surveys conducted by the FDA and National Institutes of Health, Drew says, have found that minors are not attracted to premium handcrafted cigars, and that the typical consumer of premium cigars smokes just 1.7 cigars per month.

“They’re not an everyday thing,” he says. “They’re used, typically, for relaxation or celebration. They’re also different in the sense that they’re not inhaled … and there’s nothing [artificial] added to them. It's simply a natural tobacco leaf that is aged, naturally fermented and rolled up. For folks who don’t understand the craft of hand rolling a premium cigar, it’s very easy to paint tobacco with a broad brush.”

Related Stories

Advertisement