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TOBACCO OUTLET BUSINESS
NOVEMBER/DECEMBER 2012
TRENCH MARkETING
Mateo’s smoking control laws broadly prohibit smoking just
about everywhere in the town (including all enclosed public
places and both enclosed and outdoor restaurants, elevators,
restrooms, buses, taxis, public transportation vehicles and
areas, service lines, retail stores, grocery stores, supermarkets,
all areas used by the general public in business and not-for-
profit entities, museums, libraries, movie theaters, arenas and
convention halls, plus many more). “This place has become
Granolaville—it’s neo-fascist,” he says, “so I’m just trying to
stay under the radar.”
Staying under the radar requires delicate balance from
Underwood. Far from meek, he’s got his own unabashed
opinions about how things should work—especially in light of
how they used to work—but thankfully experience has taught
him how to handle the ups and downs of the tobacco business,
and he knows how to comply with changing times to keep his
business surviving, if not thriving.
A TOBACCO STORE FOR THE PROLETARIAT
Gauging from the store’s snarky website (www.
humboldttobacco.com), the Humboldt Tobacco Company
appears to be mainly a cigar lounge for fun-loving clientele,
but it’s so much more than that.“We sell roughly 1,000 cartons
of cigarettes a week,” says Underwood, “and clients who come
here can smoke and drink. In California, that makes us the
equivalent of something the came down from outer space.My
wife and I take care of this place by ourselves, and we don’t
have any employees because once you have employees, no one
can smoke on premises.
“
It’s a big joint,” says Underwood, speaking of his roughly
4,000-
square-foot store (2,000 feet of which are dedicated to
his lounge areas). The Humboldt Tobacco Company proudly
caters much more to “working class heroes,” as Underwood
is fond of saying, and does so by making a wide variety of
brands available to them in an affordable price range, all inside
a homey space where they can enjoy those products at their
leisure.
“
I’m the anomaly,” says Underwood, “because no one under
21
can come in, I have no employees, and there’s no foot traffic
on my street…I’m not in a commercial area, it’s a warehouse
area, and I don’t have any dress shops and retail stores around
me where people can complain about smoke. It’s off the beaten
path, but not too much,” he explains. “I don’t rely on foot
traffic—it’s not a mall, it’s a destination tobacco store, and I
know everyone’s name.”
“
It’s not a hoity-toity tobacco place for old farts in red
leather chairs to sit and watch golf,” he adds. “It’s a working
man’s place, a cross between a tavern and a tobacco shop, with
pool tables, a wine and beer license, and another room with a
big screen TV. It’s a comfortable place where people can go to
have a smoke and, with California being what it is, there’s no
other place for people to do that. I’ve got one of the only places
where there’s no one looking over your shoulder.”
GROOVY INTERACTIONS
IN THE SOCIAL NETWORk
Another of Underwood’s intangible assets is his wife,
Gioioa, and her friends who rely on the store as a social
gathering point. “She is an amazing singer, and she has quite a
group of people who like to hang around with her, lots of girls
who come in, drink wine, smoke cigarettes and just hang out
here,” he says.The fact that he and she are both avid, longtime
musicians with music equipment casually set up in the store
for impromptu jam sessions also attracts same-minded
people. “We’re musicians, we fuss around with people and it’s
a very social network of folks overlaying a wholesale tobacco
business,” he explains.
“
That’s what allows me to make it the place that it is—a
place where old farts can puff on cigars, have a beer, and talk
politics with or without any girls around, or at least not too
many,” he says. “I’ve even thought about putting a ‘men’s room’
sign on one of my lounges for the heterophobes who come in
here. In all seriousness, my customers do gravitate to different
rooms.”
Underwood says he does great business with his cigars, and
it’s an area of the business he pays a lot of attention to—he
carries Ashton, Avo, Baccarat, BrickHouse, CAO, Cohiba,
Fuente,Greycliff,Hoyo de Monterey,Hoyo Excaliber, Java, La
Gloria Cubana, Macanudo, Oliva, La Perla, Padron, Punch,
Romeo y Julieta, Rocky Patel, Upmann and many others.
While he is aware of the cachet that hard-to-find brands
bring, he’s more focused on delivering tastemaker quality at a
bargain. “I don’t mark my products up 200 percent like other
stores in the area. I don’t want them priced for $21 per cigar,”
he says. “I want to offer them in the $4-$7 range for the most
part, that makes it a level playing field for working class heroes
so they don’t have to break the bank to enjoy a smoke. I buy
the finest products I can, and offer them at reasonable prices.”
PRIVATE MAkES PERFECT
Underwood’s marketing approach is to sell private label, and
make sure the price is right. When he first opened the store
back in the late 1990s, it was only a tobacco outlet, but these
days he runs it as a wholesale tobacco distributor in addition to
the retail store.His early experiences informed his aggressively
independent approach of today—Underwood says he got so fed
up dealing with certain manufacturers that he decided to stop
carrying their products in the store. “Many manufacturers in