Part 2 of Tobacco Business‘ story examining the growing subscription model retail category as it applies to the cigar industry. Panelists include ave Imber, vice president of CigarClub; Chris Doyle and Ben Rotem, founders of Luxury Cigar Club; Alexander Berezowski, owner of My Cigar Pack; and Brian Desind, founder of Privada Cigar Club. For part 1 of this story, click here.
What does your subscription box service cost the consumer?
Dave Imber: We keep it very simple: three, five or 10 cigars a month. You pay based on the quantity you want, and we make sure the cigars line up with your palate and the quality you desire as a cigar smoker.
Brian Desind: There are no options for pricing with Privada Cigar Club. It’s one package each month. There is so much time that goes into scouting the cigars, researching the story of each one, often designing the bands and naming them and then pairing and reviewing each one that we really never had time to create any tiers. Once the club reached a certain point and I realized how much money our members actually spend on cigars each month, I wanted to say thank you by rewarding them with an entirely different subscription. The second subscription is the opposite of Privada and is called Farm Rolled. It brings you daily smokes at an amazing price. I didn’t want to degrade the brands we carry, so instead of doing the whole thing where you sell cigars way below MSRP—which damages the brands and hurts brick-and-mortar shops—I decided to go directly to the factory and not put bands on the cigars. You basically get a lot of the same cigars you buy in stores for anywhere from $10 to $15 for just $5 a piece, unbanded. It turned out to be a great experience and very educational. It is shocking how much influence the band has on a smoking experience!
Farm Rolled gives our passionate cigar lovers a chance to see what they truly like. Unlike Privada Cigar Club, Farm Rolled is still an open club. I was always asked to create a higher-priced tier box, but honestly, I never wanted anyone to be treated differently. That box is the best I can do each month, and it’s something we all share together. And that sharing is part of what’s created that community.
Chris Doyle: All of our memberships are priced to provide the best possible experience to our members. Again, our driving principle is the experience we provide and is less from a value point, although we do believe we provide the highest return per dollar in the cigar-of-the-month-club world.
Alex Berezowski: We’ve been humbled with great support and have been able to consistently reinvest resources on the service in that pursuit for constant improvement. Our mission has always been simple. We wanted to design a high-end subscription at the most affordable rate we could possibly sell it for. Our margins are small, and only collective integration and growth within the community can exponentially make the packs better every month.
How have you gone about building a loyal following or sense of community within your business without having a physical location?
Desind: Privada is a community. When it comes down to it, as influential as I am on the actual products that go in the online shop and the subscriptions, from the beginning, Privada has been communal like no other business I have ever seen, even or more so than even Peloton or Crossfit. I’m not gonna give you what I believe is the secret sauce to that, but I will tell you that without our members, I’m nothing. Privada is nothing. It would have gone nowhere. All my work is dedicated to the members.
Ben Rotem: Our member experience has, since inception, been the driving force behind what we do, and a massive part of our member experience is community. Our solution for community is an online chat platform in which all our members can come together to chat, herf and learn. We have members from all over the world, and almost any time of day you will find a group of friends smoking together on the platform. We also host several in-person herfs around the country every year where members travel, meet up and, of course, smoke together.
Imber: Content, content, content! Every week we host a live show, The Griff & Dave Show. We also produce podcasts, vlogs, cigar breakdowns, behind-the-scenes videos and so much more. It is our way of interacting with our CigarClub family and sharing the everyday with them.
Berezowski: My Cigar Pack builds community through authenticity and interconnectivity. We probably have the smallest team out of all our competitors, but when we have those slim opportunities to engage with our members and followers, we do so through the passion and nature that drives us, not to simply create a social media trend.
How are you approaching scaling your business? Is there a limit to how big your subscription business can get?
Berezowski: Sky’s the limit, but given our nature, we must predict, project and control these volumes to guarantee the quality. We’re focusing on staying true to that quality through steady and exponential growth. Rapid growth in a segment and craft that requires years of patience and attention to blossom can be treacherous, as we don’t want to adapt into a model that diverts from what we originally intended to bloom.