To outside observers, the 81-year-old Cassar seems to have the Midas touch, as each company he adds to the Kretek International portfolio becomes a leader in its category. Yet most people aren’t privy to the planning, tenacious effort and intense desire to serve his customers that spurs Cassar.
They’re also unaware that it took Cassar a long time to find his niche. Before establishing Kretek International, Cassar was a CPA, an international car broker, a real estate agent and broker, and a medical management consultant. His diverse resume is a testament to the life experience that helped him forge his specialty tobaccco empire in his mid-40s. While Cassar is clearly a successful man, he’ll be the first to tell you that all of his late-found success spawned from simply wanting to survive and provide for his family. While part 1 of our interview focused on Kretek’s genesis [read here], part 2 examines the company’s expansion and the broadening scope of the company’s product portfolio.
When the Cigar Boom took hold in the mid-1990s, Cassar tried to get into the cigar business, but the biggest cigar companies had cornered all of the available supply. When a company was lucky enough to get cigars, there were no boxes available. So in his typical fashion, Cassar worked out a way to overcome these hurdles and became a cigar manufacturer. He met Nestor Plasencia Sr. and contracted him to make Hugo and Hugo Cassar cigars in 16 different blends. He also established his own box-making factory in Palm Springs, California.
While expanding his product offerings, Cassar also looked to expand his customer base by distributing outside of California for the first time. In 1996, his son Mark joined the business. A year later, his daughter Wendy started working at Kretek International. Then, in 2002, his son Sean came on board as well.
“The first 12 years were the most difficult,” Mark says of the company’s history before he joined Kretek International. “He had a lot of competition, every day he scratched out a living. My job was product development when I first joined the company. When we found a product that we thought was good, we would travel directly to the countries where they were manufactured to strike a deal. We were aggressive that way. That’s how we got exclusives on a lot of products.”
Widening Kretek International’s product selection with exclusive offerings made the company an invaluable resource for retailers, and Kretek’s growth was felt by its competitors. In the early 2000s, one of Kretek International’s biggest competitors, Phillips & King, filed bankruptcy. With a more than 100-year legacy, Phillips & King was an enduring force in the specialty tobacco industry. Cassar had a deep respect for his once-fierce competitor and knew it would be an important addition to his growing company, so he snatched it up. He purchased several other distributors over the years as well, and eventually Kretek International and its subsidiaries would provide a wide array of specialty tobacco products to every state.
“We were the first ones to have tobacco licenses in all 50 states, and we are the only one to have tobacco licenses in every state today,” Cassar says. “We have every tobacco product that sells, which incorporates some 20,000 different SKUs. We grew because we became a one-stop shop where retailers could buy everything from us. That made our customers very happy.”
Kretek International continues to grow and improve its ability to be that one-stop shop for specialty tobacconists, smoke shops, c-stores, liquor stores, head shops and more. The company started Ventura Cigar Company in 2010 to manufacture and market its own premium cigars and pipe tobaccos, including brands such as Psyko Seven, Archetype, Case Study and Hugo Cassar cigars, and Fourth Generation pipe tobacco. It has also established its own publishing and tradeshow organization, Tobacco Media Group, which publishes Tobacco Business magazine and hosts the Tobacco Plus Expo, the largest total tobacco trade show in the U.S., which is held in Las Vegas every January.
It may have taken Cassar half his life to figure out his place in the business world, but he’s grabbed onto it with tenacity and determination. As proud as he is of Kretek International’s success, Cassar is most pleased that his family has joined the business. While still desiring to be consulted on big company decisions, Cassar has turned over the daily management of Kretek International and its subsidiaries to his family. Mark serves as Kretek’s president and CEO, overseeing all of the companies. Wendy is vice president of human resources, and Sean is secretary for the company and also serves as president of Ultimate Superfoods, one of the company’s non-tobacco divisions. Cassar’s stepson, Patrick Spillane, leads new business development efforts. The company also has a Canadian division that was originally managed by Cassar’s nephew, Patrick Hurd, who moved to California in 2010 and is currently vice president of sales for Kretek. The Canadian office is now led by a team that includes Cassar’s sister, Mary Hurd, and brother, Ray Cassar.
The family’s close-knit relationship is quickly evident whenever anyone visits the company’s headquarters. Family members frequently visit with one another throughout the day, and most days they have lunch with the company’s senior management in the boardroom. “We are all blessed to be able to work together,” Hugh Cassar concludes.
This story first appeared in the January/February 2018 issue of Tobacco Business magazine. Members of the tobacco industry are eligible for a complimentary subscription to our magazine. Click here for details.
– Story by Stephen A. Ross, senior editor of Tobacco Business Magazine. Photography by Jim Coontz