hen J. Cortès’ acquisition of Oliva Cigar Co. was announced in July 2016, many were surprised. News of the coming U.S. Food and Drug Administration (FDA) deeming rule was just settling in, and the tobacco industry was still reeling. Acquisitions in any industry and business tend to lead to the same questions: What will become of the company being acquired? Will change be coming to the products that both retailers and consumers have come to know? Will the familiar faces behind the brand suddenly disappear? Many also wondered: Who exactly is J. Cortès, a company that has a strong presence in the European market but not one in the U.S.?
A year has passed, and much has changed in the tobacco industry, but one thing remains as it has always been: Oliva Cigar Co. Its cigars are still stocked by tobacconists in humidors across the nation, and the Oliva family remains present and actively participating in the brand. Plus, surprisingly enough, J. Cortès appears to stand behind the premium cigar company, even with its own products still absent in the U.S., with the exception of Neos, a machine-made premium cigarillo brand that is now being distributed by Oliva in the states. For Frederik Vandermarliere, CEO of J. Cortès, everything is going to according to plan, including J. Cortès’ scarcity of products in the U.S. market in comparison to that of the company it acquired last year.
“The strongest part of a family business is the family, but [that] can be the weakest part at the same time.”
Coming into a company with almost 80 years of history could be intimidating, but Frederik Vandermarliere wasn’t entering an unfamiliar business. This was a business defined and shaped by generations of entrepreneurs who also happen to be family members.
“The strongest part of a family business is the family, but [that] can be the weakest part at the same time,” notes Frederik Vandermarliere, who says his father and his career are what motivate him today. While he currently holds the CEO role, the family plays a big part in the decision-making. Just as with earlier generations, the family invests its money in other ventures, including real estate and even a cookie company—but everything goes back to cigars.
“We now have a cookie company that is more than 130 years old that has a lot of heritage, a lot of passion—it’s a pure indulgence, similar to cigars,” Frederik Vandermarliere explains. “A cigar is a moment of relaxation—a chance to disconnect from the world. People will continue to enjoy cigars because they need that moment of relaxation and of disconnection.”
Working with family can present its own challenges, but it also teaches some valuable business lessons. For example, partners need to have an understanding of one another, and good communication is key. Also, being able to separate business and family and not allow either to negatively impact the other is important.
“We still have family parties and still get along. That is really fantastic—to have the combination of a successful business, buying out business partners who are family members and still having a good family relationship,” says Frederik Vandermarliere.
EXPANDING THE FAMILY
As CEO of J. Cortès, Frederik Vandermarliere is leading the company into the next generation with the lessons learned from his father and family over the years. In 2012, he got to know the Oliva family and saw synergy between that family and his own. Like the Vandermarlieres, the Olivas have worked together as a family for generations and have a passion for tobacco. Though J. Cortès acquired Oliva, Frederik Vandermarliere sees it more as a partnership and joining of two similar families united by similar beliefs and values.
“I look for good partnerships among family businesses. The family values go above everything,” he explains. “The good thing is that, through all the discussions we had, the respect was there, the understanding was there, and there was a common vision: to grow the business in the same way they had always done before.”
It’s been over a year since the acquisition was announced, and in the view of retailers and consumers, it has been business as usual. The Oliva branding remains unchanged, no one from the Oliva team has left, and the brand has retained its status. Frederik Vandermarliere says this was always the intent because this wasn’t strictly a business move; it was about two families coming together with one common story. One factor, he says, will keep J. Cortès and Oliva growing and successful: passion.
“We have so much to do with Oliva that you can’t do everything at once. In the U.S. market, the things that Oliva can still do within the premium segment is amazing. We need to focus on this at the moment,” says Frederik Vandermarliere.
– Story by Antoine Reid
This story first appeared in the September/October 2017 issue of Tobacco Business magazine. Members of the tobacco industry are eligible for a complimentary subscription to our magazine. Click here for details.