Nat Sherman: A Retailer’s Manufacturer

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“But we’re also thoughtful about the pressures our retailers face, especially since we’re a retailer too. And we don’t have a section of empty shelves in our humidor that says ‘coming soon, next IPCPR.’ Neither does any other retailer. If we select a product to bring into our store, it’s because there is a clear place for it. And we make sure that there is a place for every product we bring to market, to ensure it will succeed in our humidor at the Nat Sherman Townhouse and the humidors of our partner retailers throughout the U.S.”

Enter Altria
Since joining Nat Sherman in 2011, Herklots was involved in perhaps the company’s biggest change, when Altria acquired it in 2017. Altria, already a massive player in the tobacco business, added Nat Sherman to its Fortune 200 portfolio, with the premium cigar and cigarette company joining a list of other businesses, including Philip Morris USA; U.S. Smokeless Tobacco Company, the maker of Copenhagen and Skoal; John Middleton Company, the maker of Black & Mild cigars; Ste. Michelle Wine Estates; and Nu Mark, an e-vapor company, to name a few.

Herklots says that in the beginning there were a lot of folks jumping to conclusions about what the acquisition meant for the company, “but there was a clear integration plan in place prior to the acquisition thanks to the Sherman family and the leaders at Altria, and we’ve been able to maintain that plan over the last 12 months to ensure that we remain focused on growing our business.”

“We said we would move quickly during the acquisition, and we have,” adds Steven Callahan, spokesperson for Altria. “Since the acquisition was announced last January, we’ve successfully integrated Nat Sherman as a stand-alone operating company, including expanding its cigarette production capabilities, integrating it with Altria’s distribution system and focusing on complying with regulations. Also, the great folks that made up Nat Sherman pre-acquisition are in large part the same people who make up Nat Sherman today.”

Indeed, a year after the acquisition, Herklots sees the advantages to having such a solid foundation for its premium cigar brand. “Nat Sherman’s cigar business was a founding pillar of the company, and it continues to be a very important piece of the Nat Sherman story. We put a tremendous amount of time and effort into re-establishing our premium cigar business in 2011, and year after year we grow our business thanks to the tremendous support of our retailers and, of course, our adult consumers.

“But it’s no secret that the premium cigar business is much different today than just a few years ago, due in large part to the increase in regulation at the federal, state and local levels. The acquisition has provided a solid foundation to continue to build our business. Our sales representatives are in stores every day working with our partners to make sure they have the best product mix for their business, and supporting them at events and programs that ensure continued growth. The acquisition also ensured seamless transition with our partner manufacturers, who continue to provide us with high-quality and incredibly consistent premium cigars.”

As to the future, Herklots remains optimistic, seeing the company’s goals as a marathon, not a sprint. “Nat Sherman takes the premium cigar business very seriously. It’s a very special piece of the tobacco industry, unlike any other. We will continue to be what we have always been—a great company with a comprehensive portfolio of premium cigar blends for every taste and occasion. We’ll continue to grow our business thoughtfully and for the long term, and will remain committed to our partners and our adult consumers. And in five years? I’ll likely answer the same way. When you’ve been in the cigar business as long as we have, we look in increments of 10.”

This story first appeared in the March/April 2018 issue of Tobacconist magazine.

– Contributed by Robert Nason