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C-Gars Ltd.

Michael Chiusano,
Cusano Cigars:

Beyond
Boomtime


Investment manager Michael Chiusano took a risk with his own resources in 1995 when he made an investment in the cigar business in the early days of the infamous boom. 10 years later, his eponymous Cusano cigar brand is still going strong, and reaching a growing audience of dedicated fans - mostly by adhering to the company’s motto of high quality for a fair price.


SMOKE: You started a cigar business about 10 years ago; what were you doing for a living 10 years and six months ago?

CHIUSANO: I managed money for corporate retirement plans for Shearson-Lehman Brothers, then started my own investment company.

SMOKE: When did you discover cigars as a hobby?

CHIUSANO: When a premium cigar still sold for about $2.00! I don’t remember exactly when, but it was the late ‘80s, early ‘90s, way before the “boom.” I never paid a lot for cigars.

SMOKE: What were some of the factors that led you away from the financial services industry and into the cigar business?

CHIUSANO: It was actually a gradual process where the cigar company overtook the investment company. I had always been involved as a consumer, and [at one point] my investment business brought me to the Dominican Republic to help finance sugar cane production. One of the family members who owned the sugar cane plantation handed me a local-market cigar made from tobacco at their processing facility. I smoked it a few days later and was floored by how great it was. Just for the heck of it, I had 100 cigars made with this tobacco I’d found, and had them shipped off to David Garofalo at Two Guys Smoke Shop, where I used to shop. I made cigar bands out of my investment company’s letterhead and attached them with a little glue so it had a Chiusano logo on it. David and his guys all thought the cigar was really good; they were really excited. And the first press to pick up on it was Smoke magazine, who gave it one of the highest ratings in the first anniversary issue.

SMOKE: You started around 1995, with the cigar boom starting to gain steam. Was it difficult at first to break through and get shelf space with all those brands out there?

CHIUSANO: No, actually. We came out with our cigar because of the fact that you couldn’t find enough cigars. When I gave that cigar to David to smoke, and said I could get more of them, he said he couldn’t get Macanudo or any brand names. This is what prompted me to go to the Dominican Republic to trademark the name. We altered the spelling of our last name to “Cusano” so people could pronounce it. We made 50 boxes of Cusano Hermanos Cigars, and David said he’d take them all. It was never a business decision to get in; I thought I was just going to make 50 boxes and send them to my customers in the investment business as sort of a “thank you.” But soon I had orders for 10,000 cigars.

SMOKE: So you actually got into the business at a time when the demand was still outstripping the supply.

CHIUSANO: Absolutely. And when Smoke published the rating, along with the 800 number from our investment company, we just got barraged with phone calls because none of these tobacconists could get cigars, and here was a new one, highly rated and relatively available. It took off fairly quickly. I never had time to think about it. I never planned to leave behind the investment business and start a cigar business, until I walked into the office after a trip to the Dominican Republic, and it looked like an intensive care unit with all the humidifiers!

SMOKE: When did you meet [Davidoff cigar maker] Henkie Kelner and how did he become involved in the business?

CHIUSANO: We were utilizing several factories in the Dominican Republic, along with our own facility, which had a U.S. employee overseeing the quality control and the packaging. At this point, we were pretty immersed in the business, and we looked at companies like Nike for our new business model. We realized Nike doesn’t necessarily stitch sneakers together, but they make sneakers. I met Henkie in 1997 and gave him one of our highest-rated cigars to try. I asked him, “Can you make it?” He puffed it, looked at me, smiled, and said “I can make it better.” So we used an outsourcing model where we had Henkie do the rolling, because, in my opinion, his quality control is the best in the world, hands down.

SMOKE: Did the scarcity of tobacco during the boom years affect your production at all?

CHIUSANO: Yes, but in a positive way! We were one of the few companies that had the tobacco we needed. The larger brand names were the ones that couldn’t supply their channels.

SMOKE: Were you constantly competing with some of the bigger companies to get that access?

CHIUSANO: One of the problems in the Dominican Republic was that there were 200 brands that started within 12 months, some of which raised $5 million in the public market. We were lumped into this group of newcomers, or “Don Nobodies” that the market eventually sifted out. It went from 200 down to about 12 of us. The bust in the market actually helped us, because, before it, the consumer couldn’t separate who was good and who was Johnny-Come-Lately.

SMOKE: 10 years later, your line is fairly large and diverse, and each cigar has a story behind it; let’s talk about them individually. What is special about the Hermanos Vintage?

CHIUSANO: We don’t make a cigar unless we love it, and usually when we love it, there’s a story why we do. If I can’t tell you why I love the cigar and why I need to make it, then we don’t make it. The original one was a Cusano Hermanos with a Connecticut shade wrapper, because I’ve always loved Connecticut shade, and with a Dominican-grown maduro wrapper which wasn’t prettiest wrapper in the world, but we were going for taste, not aesthetics. The Hermanos Vintage blend is a milder, sweet, creamy, palate-whetting, Connecticut shade cigar, available in a limited number of stores. It’s a perfect “morning” cigar, and it’s a good value.

SMOKE: Can you describe the circumstances of how you came across 18-year-old tobacco for the Cusano 18?

CHIUSANO: We’re always hunting around for wrapper and exotic tobaccos. The filler of the 18 was one of the first Dominican wrapper crops, harvested in 1985. It was an experiment by Henkie and the agronomists who worked for him, and the only problem with it was that you couldn’t wrap a cigar longer than four inches. I was reminded of another cigar maker who couldn’t get enough Cameroon for wrapper during the boom, so he put the small amount of the Cameroon leaf in the filler. I decided to take the 18-year-old tobacco and put it in the filler, and then add a Connecticut shade wrapper and Connecticut shade binder. So you get double the rich creaminess of the wrapper plus you got the sweetness of this 18-year-old filler. We’re releasing an 18 “Paired” Maduro using the two best maduro wrappers in the world. We combine a Brazilian Mata Fina with a Connecticut broadleaf to get a truly exotic flavor. It took two years to get the flavor where we want it, but we’re not going to launch a product until we have a consistent, steady supply.

SMOKE: Your Killer Cameroon line uses genuine African Cameroon wrapper. Have you ever had any trouble acquiring it to keep the consistency of that line?

CHIUSANO: A couple of years back that there was a shortage of Cameroon, but we have a pretty steady supply, and for anything we do with Henkie, we reserve. It would take two years for us to really be affected by [a shortage]. The Killer Cameroon is interesting because it is actually a smooth cigar but still powerful. You don’t get the hot burn, the bite, or the harshness on the palate, which a lot of people confuse with strength. When people see “Killer Cameroon,” they think, “Oh, my God, this is going to kill me.” The name actually works against us, in that sense. The word “Killer” attracts the people who want to get their face blown off, but it’s not blended for that; and some people who would be attracted to it are afraid of it. So it’s a lower production cigar than the 18.

SMOKE: Had you thought about changing the name of that cigar to get a wider audience?

CHIUSANO: Most of our cigars are cult cigars. The people who know them love them, so we haven’t changed it. When you change the name, people think you’ve changed the product.

SMOKE: Many cigars use Corojo in their name. How is your Corojo 1997 different from all those?

CHIUSANO: Lots of companies use the Corojo name for marketing, but with one exception, you won’t see another cigar brand with the seal of ProCigar, a self-regulating industry organization, that identifies that this tobacco was from the 1997 harvest, and identifies where the tobacco is from. The cigar was originally released with a wrapper from the 1996 harvest, and then the 1997 crop was a little bit darker. Real Corojo leaf, by nature, has a wide color variation, so you get lots of lights and darks. Cuba stopped growing it because of insufficient quantities; it’s very susceptible to blue mold, and it grows very thick, so you get a low yield and combustion issues. Our Cusano Corojo 1997 is from two Cuban seeds grown in Ecuador, in a valley that gets only 500 hours of sunlight a year. It comes out supple and it doesn’t have the usual burn problems of Corojo.

SMOKE: What is the story behind the Xclusivo?

CHIUSANO: The wrapper on the Xclusivo is an experimental hybrid. When Henkie was working in Cuba to help get their wrapper to grow, he created a hybrid between Corojo and Connecticut shade, which was oily and thin, and grew very large. This hybrid is actually also the wrapper you see on the recent version of the Cuban Sancho Panza. Basically, it’s the 18 wrapper crossed with the Corojo 1997 wrapper, so it gives you the strength of a Cuban and creaminess of the Connecticut shade. It’s a very interesting cigar to smoke, because you really sip it rather than smoke it; it kind of makes your mouth water while you’re smoking it.

SMOKE: What made you decide to enter the flavored cigar market?

CHIUSANO: One of our retailers once grabbed me and said, “Why can’t anyone make a flavored cigar with a nice wrapper?” Some manufacturers have the perspective that, “We have this extra tobacco that doesn’t taste particularly good; let’s just flavor it. These guys don’t really smoke cigars, so let’s put a junk wrapper on it, because they don’t know any better.” Nobody had really given much respect to the guy who smokes flavored cigars, and we took it as an opportunity to be able to tell people, “This is one you’re going to like.” We have a special process where we lay out the filler tobacco on a rack and then release the flavoring into the air during humidification so the filler tobacco absorbs it. That way, the wrapper doesn’’t get wet or stained, and doesn’t get sugar on it.

SMOKE: Your bundle series seems to run the gamut of taste and strength. With that, are you catering to a more bargain-conscious consumer or are you trying to get more people to move up the ladder of premium cigar appreciation?

CHIUSANO: Both. They’re handmade cigars, not 100% long-filler; we use some mixed filler in them that gives them all a standardized core. Then we add a long-filler leaf that allows us to change that taste a little bit, then two binder leaves that allow us to change the taste a little bit more, then a premium wrapper leaf. The result is that we distinguish four different taste profiles. It allows people to smoke premium tobacco at bundle prices. We see it as a program that starts with the M-1, which is a mild Connecticut [wrapper]; progresses to two medium bodied cigars, one in Connecticut broadleaf maduro (the P1) and one in Connecticut shade (the MC); and goes up to a medium- to full-bodied Cuban style (the CC), which has a Sumatra wrapper from Ecuador. The value equation is probably at its pinnacle in our bundle series.

SMOKE: The Cusano C10 is your 10th anniversary cigar. Why did you choose the format for it that you did?

CHIUSANO: I’ve always loved the Cuban Montecristo No. 4, and instead of trying to find it in today’s market, I decided to make something that tastes like it. In order to accomplish that, we used a Cuban-seed wrapper that we grow in Ecuador; a phenomenal Mexican Sumatra wrapper as binder; and a Honduran Jamastran Valley wrapper and Connecticut broadleaf wrapper in the filler. We added two Dominican fillers, one to make it wet on the palate and the other to give you a little sensation down in your throat. That blend conspires to taste - in my opinion - actually better than the new Montecristo No. 4. If you look at the Internet, where all these people are talking about it, anybody who knows real Cuban cigars loves the C-10 and loves that size. Essentially, that cigar was something I had been working on for years to try and replace something I couldn’t get in the market at a price I thought was reasonable. I smoke coronas, which I think are the hardest cigars to get complexity in their blends. If you can make a corona right, you can do anything right. We are introducing a robusto in the C10 line, though. For the American market, you need a robusto because people are very size-conscious. It was supposed to come out about 10 months ago, but I didn’t like it, so we re-blended it. There will be about 6,000 boxes of 10 cigars.

SMOKE: It was a fairly bold marketing move to start with the smaller corona size.

CHIUSANO: Well, it was kind of self-centered on my part. It was the opposite of the old theory, “If they want a pink Cadillac, give them a pink Cadillac.” This is one of my favorite little cigars of all time, and I was determined to make it the way it used to be made. When people give me a hard time about the size, I explain to them that you don’t drink Port in a beer mug. It’s supposed to be tasted that way. But we’re putting out a robusto because I’m tired of getting beaten up.

SMOKE: Going into your second decade in the business, what do you see on the horizon for the industry in general, and is it mostly positive or negative?

CHIUSANO: I think you see a little of both. The negative is the tax and legislative problems that we’re having. We need to get cigar smokers to stand up and say “Enough!” to the ridiculousness. On the very positive side, the more people who taste our cigars, the more people who love them. Our biggest challenge is getting people to taste them. Part of the perception problem that’s difficult to counteract is people thinking, if it costs more, it must be better. That’s not always the case. Remember, I was a consumer before the boom. There were cigars I used to smoke that I stopped smoking because the quality went down and the price went up. A really good product at a reasonable price was the right thing then, and still is now.


SMOKE - Fall, 2005
Made in America

Cigar Rights of America

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