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TOBACCO BUSINESS
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we have a lot of business acquaintances, and we can save
them money. The greater volume we buy in cigars, the
better the price for us and our friends that are store own-
ers. We get a lot of wholesale referrals every year, and
that side just continues to grow.”
Currently, Cedar Mill Liquor has 27 active cigar whole-
sale accounts; two were just picked up early this year.
In cigars, “it’s not like it’s the ’90s again, but our sales
continue to increase, and actually, with liquor [sales],
too. Both have been pretty robust in the double digits.”
That’s another reason they both go so well together late-
ly, according to Guerra.
Cigars also offer much higher and more flexible mar-
gins—in the 30-40 percent range, sometimes even 50
percent range, Guerra reports. Distilled spirits, on the
other hand, are “on consignment in the state of Ore-
gon—they set the margin and every store is identical.
With wine, we have some flexibility, with gross margins
in the 20-40 percent range.”
The store has regular spirit tastings in-store, although
Oregon regulations don’t allow Cedar Mill Liquor to ad-
vertise its tastings outside of the store. But word-of-mouth
about liquor offerings spreads quickly, and that’s also been
true on the cigar end, thanks to the store’s cigar “grab
bags,” which consist of four cigars ranging in price from
$14.95 to $24.95. Cedar Mill Liquor also offers multi-stick
discounts—buy three, get 5 percent off; buy between six
and 11, get 10 percent off; buy 12-19, get 15 percent off,
and buy a full box of 20, get a 20 percent discount.
Cedar Mill also came up with a color-coded system so
cigar customers could more easily decipher flavor pro-
files. Blue indicates “the most mild” cigar, then it goes
“up the traffic light,” according to Guerra. Green is less
We usually
invite in one
of the liquor
distributors
for this. We
generally have
the tasting
events twice
a month and
it’s a lot more
regular during
holidays and
Kentucky
Derby time.
2.
LIQUOR SHOP DOUBLES AS
CIGAR WHOLESALER
From the reverse-dominant perspective, Cedar Mill Li-
quor is a single liquor store in Portland, Oregon that sells
cigars from its 32 feet of back-to-back wall cabinet hu-
midors, but also doubles as a cigar wholesaler to other
retailers in the area that want to incorporate cigars into
their mix.
While the majority of its sales are in liquor (over 90
percent), premium cigars are here to stay and are growing
for Cedar Mill. In fact, selling premium cigars in a liquor
setting is a growing trend, observes Randy Guerra, owner
of the business, which sends about 60 percent of its cigar
sales out the “back door to other retailers.” The majority
is to area liquor stores with humidors, he maintains.
The reason for the birth of the wholesale side of the
business is in keeping with the growing liquor/cigar sales
trend, according to Guerra—customer demand. “A lot
of people now associate a luxury lifestyle with the pair-
ing of scotch, cognac, bourbon and port with cigars—
they are very naturally complementary products.”
Cedar Mill Liquor has offered premium cigars for sale
since Guerra took over the store in 2002, but he has steadily
expanded the stogie inventory and his wall of cabinet hu-
midors to meet growing demand. The wholesale cigar busi-
ness was born about five years ago, when Guerra realized
the complementary business opportunity on a larger scale.
“There’s a certain amount of work to be done [when]
dealing directly with cigar companies; we have to file
quarterly reports on everything we purchase and sell,”
he says. “We felt we could make it easier for our fellow
liquor store owners. We knew we would have to do a
certain amount of business to make it worthwhile, but