AN INTERVIEW WITH C.A.O.’S TIM OZGENER
By David Savona

Cigar Aficionado
_Features/CA_Feature_Basic_Template/0,2344,2607,00 .html
Dec 29 2008

Tim Ozgener, the president of C.A.O. International Inc., is following
in the footsteps of his father, Cano, who founded the Nashville,
Tennessee, company in 1968. The 39-year-old Ozgener is a former
stand-up comedian with the eye of an artist, which is evident in
the visually arresting packaging and nontraditional blends that
make C.A.O. one of the world’s most innovative cigarmakers. Ozgener
recently sat down with senior editor David Savona to speak about the
40th anniversary of C.A.O., and the changes in the company since its
January 2007 acquisition by Holland’s ST Cigar Group, the maker of
Henri Wintermans cigars.

David Savona: Let’s start from the beginning, and talk about C.A.O. and
its origins. Tim Ozgener: This is our 40th year. My father started
the business in 1968 out of the basement of our home, and it was
really just a hobby. It was his love of meerschaum pipes. We started
shipping out of the garage of our home, and it was something that
developed organically into a family affair.

Q: It started as a pipe business, and you and your sister, Aylin, would
help your dad? A: Yeah. He is an Armenian who was born in Istanbul. He
was trained as an engineer, and he didn’t like the engineering of the
pipes [that he smoked]. He improved the engineering, and he went to
a retailer in North Carolina, and the guy said, "Where did you get
that pipe?" And my dad said, "Well, I made it." The guy wanted to
order some, and my dad said, "Listen, son, when you are Armenian,
you never say no to an order. How many do you want?" [Laughs.] This
retailer had some pull, and soon people started calling our house
phone, and people wanted to order my dad’s pipes. They wanted to make
sure the pipe had the same improved stem, and he started putting his
initials on the pipes, which are C.A.O. [for Cano A. Ozgener.] That’s
how the company started. He didn’t have any employees, so when my
sister and I were home, we would occasionally hear my dad say, "Are
you done with your homework? Come downstairs." Downstairs, it would
be a sea of pipes, and he would say, "This row of pipes–$45. Go." And
he would hand us the pricing gun.

Q: So it was a very modest beginning. A: Oh yeah. Looking back on it
now, there are some fantastic stories. He had a retailer that he would
do barter deals with–pipes for green coffee beans, and he would cook
the coffee beans in a pan. And I would wake up in the morning and I
thought there was a brush fire in our house because there was a haze
of smoke. I would say, "This smells horrible, Dad!" He said, "You do
not know what the hell you are talking about. This is quality! I am
roasting coffee–look how oily the beans are!" He was a mechanical
engineer. He used to analyze microfibers, so he was into the specifics
of everything.

Q: How did C.A.O. evolve from a company making pipes to a company
that’s best known for its cigars? A: When you’re going to the trade
show, it’s basically pipes, cigars and humidors. And it’s a small
circle of people. My father got to know everybody, and he saw a
trend of cigars having a resurgence, thanks in large part to Cigar
Aficionado, and celebrities smoking again. So he said people need
humidors. He was in London, found some beautiful antique boxes,
bought 30 of them, shipped them here and lined them with Spanish cedar.

They were all vintage pieces from the 1700s and they would sell
out each time we went to the trade show. They would retail around
$2,000, $3,000. So based on that demand, my father decided to make
humidors that were more reasonable. And we were pretty proud of the
fact that we were the first company to make humidors out of solid
cherry, mahogany and walnut here in the United States. We found two
woodworkers who were perfectionists like we were, I would help my dad
put them in the back of his hatchback, and we shipped them from our
home. Humidors quickly became a big part of our business–I remember
at one point it was 60 percent of our business.

Q: It quickly overtook pipes? A: Meerschaum pipes were really a
niche. It’s not like briar pipes. Right around 1993, ’94, there
was an opportunity to get into cigars. That’s when cigars were
red-hot. Everybody wanted them, and demand superseded quality and
supply. Most everybody told [my father] not to get into the cigar
business, but there was one man who told him yes, the late Peter
Stokkebye, who was buddies with my dad.

Q: The pipe guy. A: Yes, he and my dad had a very close personal
relationship, Peter said, "Cano, go for it. Don’t listen to
anybody else. They don’t want you in there anyway, you’re just
another competitor." So he went for it, and right around 1994,
’95, my father hooked up with Carlos Toraño, who introduced him to
Nestor Plasencia. And they made the first C.A.O. blend, which was
C.A.O. Black.

Q: The C.A.O. Black came out during a crazy time for cigars. Was it
a successful launch? A: There was a very specific blend and look
that it was supposed to have. I remember going down to Honduras
and seeing people I didn’t know lined up outside of Nestor’s door
hoping to get him to make a blend. The factory was just crazy. One
box would come in and [the cigars] would be chestnut brown–the shade
that we had agreed upon. But another box would come in and it would
be green. Another would be yellow. I was living in Los Angeles, and
California was everybody’s No. 1 market. I was visiting all the stores,
and I’ll be honest with you–it was easy to sell out there–retailers
were buying anything.

Q: The inconsistencies didn’t hurt? A: Initially, it didn’t hurt
it. People just needed a cigar to sell. But once things started
slowing down, which took a couple of years, then people said, "Tim,
I like you, but it’s really hard to sell this product. Customers want
something that’s consistent."

Q: So when cigar sales started to normalize, you heard that there were
some problems with these things. A: Humidors were still a bigger part
of our business. Cigars were ancillary at that time, but nonetheless,
we wanted to be successful with them. When you visit all these stores,
I like to connect with people, and when I said, "Help me out, what
will it take to be successful?" they said, "Try this, try that." You
smoke a lot of cigars and you start developing a palate for what the
consumer is asking for. That was an education for me. In 1998, we met
with Douglas Pueringer at Tabacalera Tambor in Costa Rica. He wanted
to diversify his business, he had some great wrappers in maduro,
and that’s when we came out with our L’Anniversaire Maduro. People
smoked it and said, "This is a great cigar."

Q: That was a big deal for you–I remember when that cigar came
out. What was the result at the trade show? A: The reaction was
immediate, and we got very good ratings in Cigar Aficionado and
Cigar Insider. That’s what got us in the game. I also had made a
friendship with Nick Perdomo, and later we decided to do L’Anniversaire
Cameroon. That got even more accolades, and that just exploded. People
are always looking for what’s new, what’s different. Look at the wine
industry–look at how many new wines come out. Every year, we try to
come up with [something new]. That’s been our m.o. since 1998.

Q: There are definitely two schools of thought in the industry on
this. Some say keep it the same, don’t change, and then there are
people who always want something new. You obviously believe in the
latter. A: If you’re not moving forward, you’re moving backwards. If
you’re releasing new stuff every year, if you have some stuff that’s
not performing, what do you do?

Q: You have to whittle some things out. Have you ever dropped a full
brand? A: Knock on wood, not that much. We’ve only phased out one full
brand, C.A.O. eXtreme, and that’s because there were inconsistencies
in the product, and we couldn’t tolerate it. That’s just a decision
we made on it. We did that in a very quiet manner.

Q: You’ve had some very bold product launches, and nontraditional
ones. When you came out with C.A.O. Brazilia, C.A.O. Italia, Italian
tobacco has been used in the industry, but you were the first to
brag about it. What were your thoughts about those launches? A:
Most everybody was going down the same path, playing it safe. Wooden
boxes. If you stain them, it’s chestnut brown or red. We had this blend
that everybody put their heads together and came up with, which had
a Brazilian wrapper. At the time the famous Brazilian wrapper was
Mata Fina. This was Arapiraca. I had noticed that in the humidor,
everything blended together. I said, why not roll the dice to have a
box that pops. People told me, "You’re crazy." Fortunately, it worked
out for us. Another reason we went with that packaging, whenever I
went down to Nicaragua and Honduras, there would be all these cigars
ready to go, but the boxes weren’t ready, for they had to be kiln
dried. Then I would see boxes–even famous Cuban boxes–they’re wood,
and they’re putting paper over them. What a waste. They’re chopping
down trees, and they’re going to cover the inside and outside lid
with paper. Why not get boxes that are very stiff and don’t use wood?

Q: What’s the Brazilia box made of? A: It was made from a very rigid,
stiff cardboard, and now it’s an MDF [medium density fiberboard]. Now
we don’t have to wait for the boxes, and we’re not contributing to this
wild deforestation. I don’t want people to think when they’re buying
C.A.O., they’re paying for the box. We can get boxes that are beautiful
and the price is the same. For example, our Sopranos box. Beautiful
box. That’s basically sawdust that’s been compressed. You’re not
paying for the box. We look at the cigar at the end of the day–but
we want it presented in an elegant manner.

Q: Was C.A.O. Italia a bigger risk than Brazilia? Italian tobacco
is obscure. I know people use it, but people don’t talk about using
it. Was that a more risky move? A: We’re interested in improving the
quality in whatever medium, but we’re also interested in breaking
down myths. We try to be fearless in that arena. Going back to
L’Anniversaire Maduro, there was a strip of Italian ligero used in
that blend, which we didn’t publicly market.

Q: You never told me. [Laughs.] A: [Laughs.] It was kind of our
secret–like a little dash of cayenne. When we didn’t have it
in there, it wasn’t the same. And it was amazing, it was just a
strip. So I remember my dad talking about how the Italian ligero is
key. And I noticed that people in different factories have it–kind
of an underdog kind of thing. Traditionally a lot of that Italian
tobacco was ground up for cheap cigars. I spoke to leaf suppliers,
and they said what Fidel [Olivas] and the guys were doing in the
factory was magic. Taking compressed tobacco with a crusted look,
moistening it–they’re finding diamonds in the rough.

Q: So it took a lot of work? A: Yeah. It took a lot of work. And that’s
the talent of our organization at the factory level, and I have to give
credit to Fidel Olivas and his sons. We used Italian tobacco in there
and the marketing of it was a bit of a risk. We blended around it by
adding some nice earthiness of Peruvian and some Jalapa [Nicaraguan]
to give it some sweetness. That was a big learning curve for me on
how much detail was spent on the preparation of the tobacco.

Q: What’s your No. 1-selling cigar? A: Right now C.A.O. Gold is our
No. 1 seller. It flip-flops between Brazilia and C.A.O. Gold.

Q: How many cigars do you make a year? A: Well, since we’re not a
public company, we don’t get in the numbers that much. Our focus with
the cigars is not quantity, but quality.

Q: But where do you fit in the cigar universe? You’re not a small
company anymore, you’re not a giant, you’re somewhere in the
middle. Where do you think you fit in? A: Well, define production
that would be big?

Q: Twenty million cigars a year. A: Then I would say your description
is accurate: middle trending toward more. We’ve had double-digit
growth every year since ’98. The only year we didn’t was the year
we introduced Mx2, and that cigar was much more difficult than we
anticipated in making. It has maduro as a binder, and maduro as a
wrapper. It held more moisture and took a longer time to dry. Once
the cigars were made, we found it had to spend three times at least
as long in the drying room. The Mx2 had to sit there for 90 days,
sometimes more. We had this supply issue with Mx2 for a good two
and a half years, maybe even three years. But now we’ve figured it
out–now the drying rooms are more ramped up for the Mx2.

Q: What’s your goal when you make a cigar? A: We try to innovate in
our blends, and also in our packaging, and we try to create a wide
palate for people, no matter what they like to smoke. And we like to
use Nicaragua as a base.

Q: Is Nicaraguan tobacco in all your cigars? A: Almost all our cigars.

Q: Can you rank your brands, from mildest to strongest? A: C.A.O. Gold
would be the mildest we have, followed by C.A.O. Cameroon, followed by
Cx2, followed by Criollo, which is more medium bodied, then I would
say Sopranos, then I would say L’Anniversaire Maduro, which is more
like a medium full, as well as Vision, Italia, America, same thing,
Mx2, and then Brazilia.

Q: Brazilia is your fullest blend? A: Yes. Now, we want to push the
envelope and get even fuller, and that’s where Lx2 comes in.

Q: Let’s talk about that–it’s your newest creation, it has a lot
of ligero. What inspired the cigar? A: After I left our trade show
last year, I was looking at all of our products, what people were
responding to. There’s a niche of cigar lovers that gravitates toward
cigars that are stronger. That was sort of a response to trying to
create a cigar that delivered a real full-bodied experience, for
that niche of smokers. But we don’t want to do a cigar just for the
strength of it–we want it to be complex and have rich flavor.

Q: How do you create new blends? How does it work? A: It’s a very
creative process. We had some Pueblo Nuevo [Nicaragua] ligero. If
it’s something I want to explore, and find out the true nature of
that tobacco, then I’ll smoke only that. I did a lot of improv comedy
when I was in L.A., so it’s an improvisational process, which is
what makes it fun. I’m down there, these guys at the factory are
busy, and they’re not sure what I’m going to do. But I think they
like that. I try to take them out of the comfort realm that they’re
used to being in. Most of our blends come from us trying to do a
creative convergence of things. That’s what drives it. We also like
doing things in threes, which I picked up from my father–we did
three country blends, Brazilia, Italia and America. We had Mx2, Cx2,
now we have Lx2, which is a nice completion of the three. Actually,
I wanted ligero wrapper, filler and binder. The factory said it won’t
burn. I said try it again–they said we can’t give you a cigar that
won’t burn! [Laughs.]

Q: So the wrapper from Pueblo Nuevo? What’s special about that farm? A:
It has to do with flavor. When we were down there, smoking and trying
these different cigar blends, I had all these cigars made that were 3
1/2 by 46 ring gauge. They were each made of one type of leaf from each
region of the country. We use 41 different types of tobaccos from 21
different countries in all of our blends–that’s some total. We looked
at the materials that we thought were quality ones, and when it came
down to Pueblo Nuevo ligero and Pueblo Nuevo viso, we found those to
be outstanding–great flavor, great strength but great sweetness. It’s
like eating barbecue–great barbecue isn’t just smoky. It has smoke
but it also has sweetness. With cigars, if it’s strong but doesn’t
have that sweetness, it’s not satisfying. I tell all of our leaf
suppliers–anything that’s interesting, bring it and let’s try it.

Q: Is that a standing order? A: Not order it, but get in a bale, let’s
try it out. I’m not saying all of our blends are to be a kaleidoscope
of different countries–Lx2 is almost pure Nicaragua. But we’re very
open-minded, and that’s part of our success.

Q: I was going to ask you that–what are the other secrets of
C.A.O.’s success? A: Whatever you do, you want to improve the smoking
pleasure. We did it with pipes, with better engineering. Humidors, same
thing. We’re doing the same thing with cigars. That means quality of
the product–do we have to add more people to draw-test our cigars? How
can we improve the manufacturing process? We’re about to invest money
to test the humidity level in each cigar. We’ve added Humidipaks. It
also has to do with the quality of our customer service. And because
I have a background in acting, the best actors listen and respond–so
we try to listen and respond. Quality of the packaging. We want to be
an exciting, innovative company. C.A.O. is a brand that is exciting,
contemporary, innovative, yet still has its roots in what it means
to make cigars. C.A.O. is a company that delivers quality, but is
also fresh and innovative without losing touch with its roots. It
all starts with the cigar.

Q: How have things changed since the acquisition by Henri Wintermans,
and what does that mean for the future of the company? What’s
different now? A: As far as here, nothing has changed. They’ve been
very hands-off with us. I’m excited about it–they’re excited by the
brand. They see us as this vibrant, creative company and they want to
be a part of that same mojo. Wintermans is very much into inventory of
tobacco, and they feel that inventory of tobacco will help deliver a
consistent product. I see the future as very exciting. Wintermans,
which is a division of ST Cigar Group, Scandinavian Tabak, just
sold their cigarette division and now want to have more focus on
the cigar industry. Hopefully, they will be investing more in the
American market. For our consumers that means the quality will remain
as excellent as it is now.

Q: Can you describe the relationship between C.A.O. and the
Toraños? A: It started in the very beginning with my dad and
Carlos Sr. We’ve known the Toraños for a very long time. Once
the Toraños invested in a factory with the Olivas [family], based
on our relationship we started getting more production from those
factories. Then we saw that Charlie was stretched a bit thin. We
said, "Why don’t you turn your eye toward more day-to-day quality
control?" When it comes to blending C.A.O., I do that, but we wanted
Charlie to be focused on day-to-day quality control. Plus, once we
selected a blend, he spearheads the relationship between the leaf
growers and the leaf buyers and the factory. Making a cigar is not
an easy thing. It’s not just about making the cigars, but people
trying them, getting them out there, distribution–those are big
jobs in and of themselves. At C.A.O. I have to stress that we like
to stress teamwork at C.A.O. We believe that the best team wins, so
we try to give everybody something to focus on that’s almost like a
field of specialty.

Q: When did that deal take place? A: The beginning of 2008. As far as
with the factory and how it’s set up, there’s a factory in Nicaragua
and Honduras. Most of what they’re producing in both factories, a large
percentage is C.A.O. In Honduras, it’s more tangible. One building is
just C.A.O. and one is Toraño. In Nicaragua, it’s one huge galleria.

Q: So they make the cigars and you sell them? Or is that too simple? A:
We’re very much involved in the whole process of blending. All of
the blends that we come up with, we have a hand in. We’re very detail
oriented. The blends are taking us a longer and longer amount of time
to do. It’s like a concert, everybody getting together and working to
deliver this blend. It’s a teamwork process. We’re very much into the
team concept–we’re inspired by that. I’m not motivated by money. I’m
motivated by delivering something that brings pleasure to people. I
used to do stand-up comedy because I like to hear laughter. I like
making people happy. These are products that deliver moments of
pleasure. That’s the ultimate goal for me.

Q: Forty years ago your father started this business. Your father is
retired now–you have two young sons. Do you ever look down the road
and hope one day they’ll follow you? A: I look upon it the same way
my dad did–whatever their heart desires, whatever they want to do,
I’m going to let them go down that road. I’m going to love them for
whatever they want to pursue. To me, this is not work. This is fun,
this is a pleasure. And that should be the same for them, whatever they
desire to do. You spend most of your day doing your vocation. It should
be something that you feel passionate about, and that you love. v

–Boundary_(ID_c0Q8jSMpGYKpQ07igLu8Jg)–
From: Baghdasarian