Part 2 of Tobacco Business‘ March/April 2019 cover story featuring Micallef Cigars’ Al Micallef. For part 1, click here.
Growing the Brand
Micallef Reserva Limitada Privada was named the “No. 1 Boutique Cigar of 2017” by Cigars & Spirits magazine. In the same year, Cigar Journal ranked the cigar as No. 22 in its listing of top 25 cigars. For 2018, the cigar received 17th place in Cigar Aficionado’s top 25 listings.
Since that auspicious debut, Micallef has grown the line to include cigars such as Reata, named for the restaurants that he owns; the best-selling Experiencia La Crema; Experiencia Prominente; Torcedores; Herencia Habano; Herencia Maduro; Gomez Sanchez 1RA Generacion Leyenda 1; Gomez Sanchez 1RA Generacion Leyenda 2; Connecticut; Migdalia; Grande Bold A Maduro; Grande Bold Ligero; Grande Bold Nicaragua; Grande Bold Sumatra and Grande Bold Mata Fina. Counting various sizes, the Micallef Cigars portfolio offers 40 different expressions.
The accolades have continued for the company, which has received many ratings of 90 or more among the cigar magazines and websites. While Micallef Reserva Limitada Privada remains the company’s most prestigious cigar and still demands a $42 retail price, the rest of the line consists of cigars ranging from as little as $5 to as much as $14. In addition to sharing the Micallef name and bearing the family crest on their bands, all of the cigars share another characteristic.
“No matter the price point, each of my cigars are made to be the best quality they can be,” Micallef says. “The key to being a success in this industry is having an excellent product and being able to make it consistently, year after year, and ensuring that you have enough cigars aging in your inventory to meet customer demand. I don’t want us to have back orders because you can potentially lose a customer if you can’t provide enough cigars for the market. That customer who wants a Micallef Migdalia isn’t going to wait around for three months before we’re able to provide it for him. He’s going to buy something else, and he might like it even better.”
To have better control over the quality of his cigars and their availability, Micallef purchased a factory in Esteli, Nicaragua, in 2018. The 40,000-square-foot facility, managed by the Gomez Sanchez family and overseen by Allen Davis, president of Micallef Cigars, has the capacity to produce approximately 5.5 million cigars per year. While current production numbers fall far short of maximum capacity, Micallef is setting programs in place that he hopes will one day push the factory to its limits.
Micallef is embarking on a comprehensive sales and marketing campaign in 2019 building on the momentum that was established in the company’s first two years. It includes a promotional budget that nears $750,000 to be spent on advertisements in both consumer and trade publications as well as appearances at trade shows and consumer festivals. It’s also enacted a grassroots promotional campaign to encourage Micallef Cigars’ fans to represent the brand inside their shops (see sidebar). The company has hired a team of in-house sales representatives who are capable of covering the entire United States, and backing up the outside sales representatives is a team of customer service specialists whose responsibilities include regularly following up with existing accounts.
“Each of our sales representatives has many years of experience in the industry,” Micallef explains. “They have built relationships with the retailers in their areas, and they specialize in servicing everybody in their area. Every customer counts. Our customer service team checks on the accounts that we’ve already secured. Follow-up is very important to us as well because it minimizes the risk of a retailer running out of our cigars.”
In just two years, Micallef Cigars has gone from Micallef’s request for a personal supply of 1,000 cigars to now include its own factory and a team of dozens of sales and support personnel servicing several hundred accounts worldwide. To be sure, Micallef Cigars’ growth is mightily impressive and shows that its founder’s business acumen is sharp as ever. For his own part, Micallef points to the business philosophy that has guided him throughout his career.
“Our customers know that we will never sacrifice quality for cost,” Micallef concludes. “They know that we’re a good, honest company who doesn’t like bragging about itself but that we’ll bend over backwards to make a friend before earning that friend’s business. These have been important elements in the successes that I’ve been fortunate enough to experience, and I think they’ll work in the cigar industry as well.”
Armed with such a proven recipe for success, perhaps Micallef getting into the premium cigar business wasn’t such a gamble after all.
This story first appeared in the March/April 2019 issue of Tobacco Business magazine. Members of the tobacco industry are eligible for a complimentary subscription to our magazine. Click here for details.
– By Stephen A. Ross, senior editor of Tobacco Business Magazine. Photos by Mikel Galicia.