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Gaming Guru

Chris Jones
 

Nevadan At Work: Joe Gold; Chief Executive Officer, Havana Honeys

4 April 2005

Some people claim to live and breathe their work, but Joe Gold literally inhales the fruits of his labor.

As owner and chief executive officer of Las Vegas-based Havana Honeys, Gold and associates have quickly turned a small start-up venture into one of the world's fastest-growing premium cigars brands.

First sold in local bars and restaurants in 1998, Havana Honeys are now available throughout North America, with distribution deals in Russia, Israel, Taiwan and mainland China on the horizon.

"In the last few days some people have sent me three e-mails from Benin, looking to buy our cigars. I'm not even sure where Benin is," Gold said March 23 from his company's headquarters just west of Interstate 15 opposite Bellagio. "How has someone from Benin even heard of Havana Honeys? This whole thing has taken on a life of its own."

Though he says he knew nothing about the cigar business just 10 years ago, Gold was intrigued when an acquaintance told him he earned $2,000 to $3,000 a weekend placing cigar girls in various California restaurants and nightclubs. Sensing an opportunity to use the same business model in Las Vegas, Gold set out to develop his own cigar brand.

After forming a partnership with Randy Sutton, a veteran Las Vegas police officer, Gold gradually met with others who fostered his real-world education on the cigar industry. After some time, he decided flavored cigars offered the most potential, particularly if those cigars were well-made and marketed as an upscale brand.

Aided by the ubiquitous presence of the "Honey Girls" -- a Hooters-like marketing ploy right down to the orange shorts and tight T-shirts -- success soon followed.

Havana Honeys has in less than seven years sold millions of cigars at prices ranging from $1 to $12 each. Despite that achievement, Gold won't let the smoke go to his head.

"People say to me, 'You're a CEO now. You're a big deal,'" Gold said. "But really, I'm just a cigar peddler. That's all I do."

Question: What made your cigars so popular so soon?

Answer: First of all, you've got to have a top-quality product. I can have all of the best graphics, marketing and whatever, but if the product doesn't hold on its own, it's no good.

Secondly, the graphics and packaging. I came up with different tins and tubes that allow the cigars to last up to a year without being humidified. That way we could go into the finest cigar store, restaurant, or any venue and reach any market.

Question: You're based near the Strip, but where are Havana Honeys made?

Answer: The best cigars are coming out of the Dominican (Republic), not Cuba, so I went down there and found a factory to make the cigars for us. I didn't know anything about cigars, but I knew the kind of flavor I wanted so it would appeal to both men and women.

After I while, we got our own factory. Looking back, I must have been nuts. I was in a Third World country and you could probably write a book on what not to do there by looking at what I did. But I lived in the Dominican for 10 months and eventually I put a factory together.

Question: What was the company doing in Las Vegas while you were away?

Answer: Cynthia Ellis started working for me in the office. Today she's our vice president of operations.

She had worked with Winchell's (Donut House) and Wal-Mart, so she used her extensive background to create the idea of using Havana Honey girls.

And we just kept expanding our line. First we offered only honey, vanilla and rum (flavored cigars). Now we also sell chocolate and cherry, and we're the only company in the cigar industry with a blackberry-flavored premium cigar.

Question: So your initial step was as a manufacturer, not a distributor or retailer?

Answer: Yes. But about 6 1/2 years ago we acquired a concession to operate a cart at the airport (McCarran International), and that was very successful.

We marketed it, we merchandised it, and the airport offered us the chance to build the Havana Honeys cigar store, which we opened about a year ago.

We're one of the top-selling stores in the airport, and there's no cigar store like it. We're going to branch out into franchising opportunities.

Question: Has that location been a big help in growing your brand?

Answer: If I could have a cigar store anywhere in the world, I would pick the airport in Las Vegas. You had 41 million people going through that airport last year, and probably 30 million of them walked past that store. And they're from everywhere -- not just from the United States, but from the world.

It doesn't matter where you go on this planet, if you say Las Vegas, it's magic. When they see our cigars in the airport, it's brand-building that gives us recognition and validity because we're associated with Las Vegas. Same goes for the convention centers. They really get people to come here and give (local businesses) plenty of opportunities.

Question: But there are all sorts of products sold at the airport. What else helped put your product in people's hands?

Answer: We were very fortunate that Thompson Cigar Co. took a chance on us. Nobody had heard of Havana Honeys, but they put us in their catalog.

You don't pay to get in that catalog -- they buy (your product), and if it doesn't sell, you're gone.

Thompson is the biggest thing in this industry, so their putting us in the catalog helped us get recognized, helped people to say, "Hey, let's take a look at this," and that really helped us. And we've also been very aggressive in getting to distributors.

Question: In what way?

Answer: We do business-to-business telephone sales. If you have a cigar store or 7-Eleven, we'll call you. And I started getting booths at conventions like bar and restaurant shows so we can have a presence.

If people see you there year after year, they take you seriously and start taking on your products.

Question: Could this business have been as successful had it launched in, say, Denver or Kansas City, Mo.?

Answer: Vegas has helped us immeasurably. The airport, the exposure of having our products sold in the hotels -- it's an unbelievable power, because everyone wants to come here.

Question: What brought you here in the first place?

Answer: My family and I used to come out here all of the time; my mom and dad loved it, and I always wanted to live here. Sometimes life leads you in directions you never planned, but I love what I'm doing here.

Question: How did you finance the company?

Answer: Randy (Sutton) and I started it. He put a little money in, and I put up the majority. ... He isn't going to stay with the company much longer, though, because he wants to pursue other things.

Question: How many people do you employ?

Answer: We have about 200 people (working) in the Dominican, and here in Vegas, between 50 and 75.