Thirty-five years after establishing Kretek International and overseeing the company’s aggressive expansion into nearly every aspect of the specialty tobacco industry, it’s hard to imagine Hugh Cassar ever struggling to make ends meet. As the leader of the company that now includes Phillips & King, Tobacco Media Group, the Tobacco Plus Expo and Ventura Cigar Company, along with several other divisions outside of the premium tobacco industry, Cassar now employs more than 400 people and continues to drive consistent growth year-over-year.
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.
“It’s all been about trying to make a buck so I could pay the bills,” Cassar says. “I never wanted to be a failure, though I have experienced my share of failures. Each of them taught me something so that I could eventually be a success. The main things I have learned is that business success takes a lot of guts, determination and a willingness to give it everything you’ve got. Those are the lessons that I have learned since I was a little boy in Malta.”
Kretek International’s Genesis
It was 10 years before Cassar read an article in The Wall Street Journal about clove cigarettes and their growing popularity among young adult smokers. During the decade after he moved to California, Cassar sold real estate and cars, and spent some time as a medical consultant, managing hospitals worldwide. While he experienced some success with these endeavors, all of them still meant working for someone else. Importing clove cigarettes into the United States, he reasoned, would be a way to establish his own business.
“I wanted to do something that was unique and that nobody else was doing,” Cassar says.
“I hated the smell of cigarette smoke, but clove cigarettes were different. I liked the way they smelled, and I liked the way they crackled. They had sweet tips and a pleasant aroma. You can always tell when people are smoking a clove. It was something different, and I wanted to be a part of it. People told me that it was a fad, but I didn’t believe them.”
Cassar bought a ticket to Indonesia to strike an importation deal for selling clove cigarettes with P.T. Djarum, one of the leading clove cigarette manufacturers. The company refused to see him because they already had an importer.
Cassar didn’t give up, however. A short time later he learned that Djarum’s marketing director would be attending a seminar at the InterContinental hotel in Southern California. Cassar went to the hotel at 7:30 a.m. and waited in the lobby until 4 p.m., when the marketing director finally arrived. Cassar introduced himself and told him of his interest in importing clove cigarettes. Even after meeting the marketing director, Cassar couldn’t secure a deal—yet he was undeterred.
“It’s tenacity,” says Keets, Cassar’s wife of more than 40 years. “He sees something he wants, he goes after it, and he doesn’t take no as an answer. I’ve seen it over and over, again and again.”
Stonewalled by Djarum officials, Cassar risked his entire savings and traveled once again to Indonesia. This time he bought cartons of clove cigarettes from local distributors in Jakarta and arranged for their shipment to California. He established Kretek International, named for the Indonesian word for clove cigarettes, rented a small office and warehouse, and waited nervously for the shipment to arrive three months later.
“I bought everything—Djarum, Gudang Garam, Krakatoa, Jakarta, Sampoerna and Terong,” Cassar explains. “I didn’t know how to pronounce them and what to sell them for, but I figured all that out. I took the back seat out of my car, loaded up the cartons and drove around to area retailers trying to sell them door to door.”
At 46, Cassar was, at last, the captain of his own destiny, but success didn’t come quickly. It took years before he landed an official deal with Djarum. What’s more, by the mid-1980s there was plenty of competition from other clove cigarette importers, including the California-based Phillips & King, which waged a price war with Kretek International that brought the price of clove cigarette cartons down to mere pennies of profit. Cassar knew his business couldn’t last under those conditions, so he sought an exclusive import and distribution deal.
After reading a book on marketing, Cassar designed a survey to conduct on the UCLA campus. He gave away a pack of clove cigarettes to anyone willing to fill out the survey and then compiled a 25-page report on why clove cigarettes were popular in the U.S. and why Kretek International should be allowed to sell them. Djarum’s top officials were intrigued.
“Finally, they let me in to the board meeting, and I gave them the marketing report and laid out my plan and why I believed in the clove market,” Cassar remembers. “Later that afternoon, one of the senior company directors called and told me that he was going to give me four brands because I was the only one who told him exactly why I wanted to sell his product. I didn’t have any tobacco business experience, but I had convinced him that I could sell his products. He saw that I had studied the market and had devised a way to market their products.”
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. Photography by Jim Coontz