ACHP Interview with Michael Herklots of Ferio Tego Cigars

Episode Summary

Michael Herklots sits down with A Cigar Hustler's Podcast for a long-form career conversation that traces his path from a cigar kiosk and the Gloucester Street shop in Boston in 1998-99, through nine years at the Davidoff flagship on Madison Avenue, into the Nat Sherman years, and finally to co-founding Ferio Tego. He credits early mentor David Kitchens for taking him under his wing, and talks about the pre-internet era of legendary sales reps — meeting Rocky Patel around 1999-2000 when he was selling Indian Tabac, along with Litto Gomez, the Quesada family and Christian Eiroa — while he was still studying at Berklee and chasing a career as a jazz musician. His guiding motto: "if I can do it, I will do it," which is how he ended up working seven days a week doing Zino Platinum events around the country for free, just for the experience.

The heart of the episode is the origin story of Ferio Tego. Herklots explains how he and Nat Sherman CFO Brendan (his business partner) worked together through the Altria acquisition, the failed 2019 sale, and the COVID-era wind-down of Nat Sherman — then bid to acquire the old brands from Altria and relaunched them under the Ferio Tego umbrella. He details how Quesada, Plasencia and Camacho put them at the front of the line during the height of the COVID capacity crunch and manufactured with no money up front, how they delivered 100% of orders to Pinellas Park, Florida by the third week of September, and how the Davidoff distribution deal put Ferio Tego in a portfolio next to AVO, Camacho and Zino — shipping Elegancia and Generoso to 400 stores on day one.

Herklots also opens up about the trade-offs: launching Ferio Tego alongside Timeless and Metropolitan so quickly that the flagship brand had only two SKUs until Summa arrived, and how he'd have loved to launch Summa and Core earlier. He and the host dig into the limited-edition arms race, why he measures PCA success in strategic conversations (roughly 40-50 leads a year) rather than order counts, and how the brand-retailer-consumer relationship has inverted so that brands must now create demand directly with consumers. The episode closes with practical talk on how to handle customer complaints about dry or damaged cigars, the pending class-action chatter around Cigar Aficionado selling subscriber data, and Herklots' appearance at The Great Smoke.

In This Episode

1. 01
   From a Boston kiosk to Gloucester Street
   Herklots' start in cigar retail in 1998-99 at the tail end of the cigar boom, when learning meant listening to generous sales reps.
2. 02
   Mentorship and the Davidoff Madison Avenue years
   How manager David Kitchens pulled him to New York, and what nine years at the country's most important cigar shop taught him about customers and character.
3. 03
   Music, Berklee, and saying yes to everything
   Balancing a jazz career with the cigar business, including working seven days a week to run Zino Platinum events for free.
4. 04
   Meeting his wife and life on the road
   A wine-and-cigar class introduction in 2006, and how he manages heavy travel with two daughters at home.
5. 05
   Brendan, Nat Sherman, and building a partnership
   Meeting the Nat Sherman CFO in 2011, growing the cigar business, the Altria transition, and winding the company down during COVID.
6. 06
   Acquiring the brands and launching Ferio Tego
   Bidding against other buyers for Timeless and Metropolitan, and how Quesada, Plasencia and Camacho produced on trust with no money down.
7. 07
   The Davidoff distribution deal
   Why the global luxury leader took Ferio Tego into its book, and what enterprise-level distribution meant for a three-person startup.
8. 08
   Limited editions, PCA strategy and brand equity
   Herklots argues for thoughtful, commemorative releases over monthly drops, and explains how he really measures a successful trade show.
9. 09
   Handling customer complaints and the Cigar Aficionado data lawsuit
   His policy on dry cigars and torn foot bands, plus a skeptical take on the class-action chatter around subscriber data.

Brands & Cigars Discussed

Linked items are in our shop. Mentions without a link aren’t currently stocked or couldn’t be matched with confidence.

Transcript

All right, we have the one and only Michael Herklots in the building from Ferio Tego. How are you sir? What's up man? It's good to see you man.

I'm very excited about this podcast. I am too. I'm excited about the day. We've got the whole day together.

Yeah, it should be entertaining. But the reason why I really am kind of excited about this one is, even though your tenure is my senior in this industry, Our stories are similar in a lot of ways. You started off in retail, just to really kind of briefly surmise. You started off in retail, and eventually you gravitated into having your own brand.

Now, kind of for starters, when you started, you don't really talk about the kiosk at the humidor, and I'm going to bash this name, however you say it. What was the cigar story? It starts with a G... Gloucester Street.

Yeah, that's not how it's spelled at all. Massachusetts is weird like that, Gloucester, Worcester, but it looks like Gloucester, Gloucester. Yeah, so when I started doing my research on it, I was like, I think this is it. Gloucester.

Yeah, so you started, you were there for about two years and two years, right? Something like that. Okay, so, like, what was, did you find yourself around anybody in that particular point where you might have had like a mentor or somebody that really kind of carried you along? And so, you know, you've got to get along into the cigar industry, 'cause that's really when you're in your infancy, right?

Yeah, but it was a such a wild moment in time because I loved working retail, but at that point, I was still so passionately focused on becoming a musician that as much as I took my job seriously and I loved doing the work, My long-term vision was moving to New York and continuing to perform and do all that, but there were, you know, I was very lucky, I've always been around older people, you know, my social circle was always just older, and so when I got into the industry, a little bit at the kiosk, definitely when I got to Gloucester Street, you know, the customer base, my coworkers, just everyone treated me like an adult, and it was a pretty important shop. So a lot of reps would come in, and they would treat me like an adult and be willing to teach. And you got to think time and place, too. That was '98, '99.

And so it's right at the tail end of the cigar boom. And there really was no resource for information. So it was very old school in that way. Like, you learned from people who were generous enough with their time to share.

And so that era of... sales reps was a really important era i think back i mean they were legendary reps and then even i mean listen that's i met rocky patel in 1999 maybe 2000 um when he was selling indian tobacco um i met lito around that time i mean all those i met jonathan you know all these guys were just starting out kind of when i was starting out and so it was a like looking back These are people who have continued to play a very meaningful role in my life over all those years, just wild when you think of where it all started. But I will say it's a long way to answer your question. The original manager at the Gloucester Street store when I was working in the cart, he really, he saw that I was very passionate and very serious.

And at the time there were free Wednesday night tastings and so I had no money so I would go to these free Wednesday night tastings and he could see quickly that I was really passionate about it and so he would always like spend a little extra time with me and teach me a little more and then ultimately when I went to Gloucester Street he had left to become the GM at Davidoff and Madison Avenue and then I was going to New York quite often and so I would stop by the Davidoff shop and see him. But even that was crazy. Like, I was 20, 21, you know, and they would bring me upstairs to the VIP lounge and pour me a coffee. Like, who the fuck is this kid?

You know, but then fast forward, he was like, look, if you're going to move to New York as a musician, you know, if you need a day job, you got one here. And so then when I moved to New York, I started working at Davidoff. And then certainly that's where I think he really became one of those key mentor-like figures. But I guess it did start in the era that you're talking about.

So who's the guy? David Kitchens. Is he still alive? Yeah.

You still talk to him? Yeah, a bit. He left the industry maybe 10 years ago now, but he was with Davidoff until 2008. Then he left to run Holtz in Philadelphia for a year or two.

Oh, no kidding. And then he had a place in Providence, so he worked on a store there for a little while, and then he left the industry, and he's back to building spaceships or something. So he saw the potential in you, obviously. Yeah, and then when you really, like it's funny, I still see people I knew from Boston, you know, and they always say like, you know, we always, you always spoke about cigars differently, you know, and that was even like my first year or two in, like, I didn't know what the fuck I was talking about, but it also didn't matter, because at least what I was conveying was what I experienced, which was not wrapper, binder, filler, country of origin, it was just like, this one tastes like this, this one reminds me of this, you should, I know what you like, you should try this, and so even like over the years now, I see people I haven't seen in 20 years, and they're like, dude, I I remember you, I used to come into Gloucester Street, you always had this recommendation and this, that, whatever, but definitely when I got to New York, you know, Davidoff Flagship Store, Madison Avenue was a serious place, the customers were wild, you know, it was the, probably one of the most important stores in the country at that time, so it gave me a lot of exposure to serious cats, you know, I mean, every manufacturer that was anyone wanted to be in that shop, and they came in, every, Every celebrity, every banker, anyone who was anyone, like, that was the place, and I got there when I was 22, so I had to quickly kind of, like, figure out my character and figure out what worked and what didn't, and how could I still be authentically me, but also, like, polish myself up for Madison, but then David really, really took me under his wing there, gave me a lot of opportunities, a guy named George Brightman, you'll always hear his name pop up with guys from my It's my generation because he just was a very generous guy who worked for Cigar Aficionado for a long time.

Yeah, I don't think he likes us too much. Oh, that's all right. He helped out. You know what?

He doesn't know you. I'll tell you that. Yeah. But he helped out Pete Johnson a lot in the beginning.

You know, everyone has a George Brightman story if you were active or growing in that late 90s, early 2000s period. Well, he's kind of popped up again, and he's been on a lot of the podcasts and stuff with Bear and with Coop and all these other things. He has me blocked. He blocked Palmer.

Really? Yeah. Well, these things happen. Yeah, it's no big deal.

He seems like a good guy. Honestly, he does. I just want to get him like a good camera, something decent, maybe like a reasonable chair so that, you know. Yeah, but that's, you know what, man?

Like, that's generational, bro. I mean, you know, it's like FaceTiming with your parents. Like, there's no, like, hold it up. Just hold it up.

Everything is done here, you know. I'm looking at your ear, mom. What are you going to do? That's all right.

Yeah, that's too funny. All right, so, I feel like, so you did Berklee College for four years, right, and obviously your dream was jazz, music, so on and so forth, and then as you're kind of developing, I feel like you had the need for the job, but not only that, I think that you saw opportunity with those jobs to kind of parlay, like, hey, you know, we can get the band in here, we can do these specific things, is that something that, was that your focal point when you kind of got into the cigar industry on the show? On the retail level? My focal point when I got into the industry in a retail level was making sure I could get a discount because I couldn't afford the hobby.

That's fair. But, you know, as an artist, man, you get cuckoo about stuff. You know, you find something you love and that passion button gets engaged and it's like, oh man, you just go down the rabbit hole of it all. And, you know, you want to be, every artist I know wanted to be an artist because it was their favorite thing to do, And they didn't want to do anything else other than their favorite thing to do.

And so they try and figure out a way to make a living. But then often they have to find a day job that they dislike in order to pursue the thing that they love. But I got lucky because I got a day job doing something I also really loved and I loved learning about. And especially when I got to New York, I remember we were having a lot of success with our band and some of the other projects I was doing.

And so I would take time off from the cigar shop to go on tour or to go play, and I really missed it, you know, like, I mean, I would bring my laptop and I'd like email customers and see what they need and call in orders. So I can also remember very early on thinking, like, I can't imagine not being involved in this, like, it's just something so special, especially then when you start a meeting, like, I met the Casada family, like, 2003. I met Christian Aroa and went to Honduras in 2003. Did he teach you how to retrohale?

Did who? Christian. It certainly came up in conversation. That's his thing.

Yes. Absolutely. Even then. I didn't participate, but he did.

But, you know, it's all just so circumstantial, and all these things just aligned. And I remember thinking, 2004, actually, interestingly, we were talking about George Brightman. He was working for Xenoplatinum, and he had to take some time away for some health stuff. And I was working at the time Wednesday through Sunday at Davidoff.

And George was doing all these events all over the country, and he couldn't do them anymore. So I said, look, if we can reconfigure these events and do them on Monday nights, then I'll work. And then Sunday after we close the shop or Monday morning, I'll fly to wherever this event is. And I'll do the event, and then I'll fly home Tuesday, and that way I can be at work Wednesday.

And they were like, you know, we can't pay you for seven days, like that's outrageous. I'm like, no, no, no, no, no, I don't even want that, but I'll cover it, just pay for my flight, pay for my meals, but you don't have to, I already have the job, I'll just go do it, it'll be experience. And so I worked like seven days for, I don't know, a year, like doing these events, but it was such an awesome opportunity. I met all these people, it gave me experience speaking on behalf of a brand and, you know, sharing it with people around the country, it was just, it was just an awesome experience that, um, my motto became, if I can do it, I will do it, and if I can't, then I can't, but, so that became this interesting balance of my life where I'd get our band to be like, hey, we got a week in LA, can I take a week off?

Yeah, go ahead, take a week off, great, let's go, let's go perform in LA for a week. Killer, then I'd come back and go do a cigar tasting in fucking Kentucky or something, you know, but that kind of just, believing that there is a reason why all of this is in my life, and trusting that there is a plan beyond what I can understand, but if the opportunities are presenting themselves, and I can do it, why would I say no to something that's so obviously possible? And so that was it, man. It was just, it was a series of saying yes to as much as I possibly could, and then in the moment, try and see why I'm there, what can I get out of it, and even if it wasn't clear in the moment, you know, even now, 26 years later, there are really meaningful relationships that have had, you know, pivotal moments in my career, or personal life, that all came, you know, from one of these little trips, or one of these tours, or one of these things, just happens.

Right. So, at what point do you meet your wife? I met her, so I got, I was, um, I was working for Davidoff Madison Avenue, and they bought a store on the west side, and they, they, um, it was a franchise, and Davidoff bought it from the franchisee, and they moved me there as GM, so I was just sales associate, and they're like, you're the guy, so they moved me there as general manager, and I was doing a lot of teaching for the American Sommelier Association, which is wine education, and so when I moved to the west side, I took that with me, and I was doing a lot of teaching for the American Sommelier Association, which is wine education, and so when I moved to the west side, I took that with me, and I was doing a lot of teaching for the American Sommelier Association, which is wine education, and so when I moved to the west side, I took that with me. I started doing the events there, and my wife's old roommate was the admin for this association.

And my wife's office was across the street from the mall where that shop was in. So the next class, this girl calls Tiffany and says, hey, my friend Michael's doing this event. You know, we're going to smoke cigars and drink wine. My wife said, that sounds terrible.

And then she talked to her mom that night, and her mom was like, oh, slap on some lipstick and go. You never know who you're going to meet. And she came in, and it was like, all these wine dorks, and all these people, and then like, in walks this elegant woman, and I'm like, where she was working for, you remember Zagat, the restaurant guys? Yeah.

So she worked for Zagat. So I'm like, dude, I just got here, like, where do you eat around here? You know, like, I've been eating in this Whole Foods downstairs, I want to die. She was like, I just get a salad and sit at my desk.

I'm like, well, that sounds terrible, too. Like, do you want to go to lunch tomorrow? She was like, yeah, I'll go to lunch tomorrow. I'm like, all right, let's go to lunch.

That was it. That was 2006, fall of 2006, I think. Nice. Then we started dating 07, and then rock and roll.

And marriage. And marriage, and then kids, and then suburbs. So you have two daughters, right? 10 and 8, I think.

11 and 9. 11 and 9. So close. I was close.

I had 11 and 9 originally. You had old information. But you said on one of the other podcasts, I was just trying to put it all together as far as the dates were concerned. So, you travel so much last year and the year before, especially, right?

You're constantly going around. How do you find the time? First of all, are you still traveling at the same pace? Let me ask you that.

Yeah, you know, I always say I'm not gonna, and it's no different than what I just told you. If I can, I do. You try and set a more reasonable schedule, try and carve out more time, you know, put as many of my family things in as I can so I don't miss stuff. But then, you know, if I'm out last week and I'm out next week and I'm home this week and then someone says, hey, do you think you can do an event on Thursday in Detroit?

I can. Right. And I'm trying to build a business, so fuck yeah, I'll go to Detroit. Right.

And then it's like, well, as long as I'm going to Detroit, I could come in Wednesday and then we can do two things in Detroit. And then before you know it, I'm gone for another week. Right. I mean, that's the forever challenge, right?

And your kids are right at the age, you know, 11 to 9, where, I don't know if they're into sports or anything, I think they're into, one's into gymnastics. Yeah, gymnastics and soccer and all of it. Right, and you don't really want to miss any of that stuff either, you know? It's really hard, and I do my best to make as much as I can.

Right. But, you know, I think they also, they understand what we're doing. I mean, they remember when, you know, daddy worked for another company, and I was traveling a lot then, and, and. Then COVID was great because we were, everyone was together, you know?

But then once we started getting back with Ferio, I remember explaining to them, you know, I'm going to have to start traveling again, but it's different because before I would travel because I had to keep my job and I had to prove, you know, that I'm doing a good job and that way I get paid. And now it's different. Now this is Ferio Tago and this is for us. We're not doing this for anyone else.

This is our family. This is Brendan's family. And this, I'm doing this for you, I'm doing, you know, this is a, this is a different kind of move. And I remember it was like after my, I don't know, it was like a, after the first six months or something, and I was traveling all over, and I had just gotten home.

And I was like, look, let's make, let's have a great weekend, 'cause I have to leave on, on Monday again. " She's like, all right, you have to go do it. I feel like daughters are more blunt than sons, you know? Could be, I don't have one.

Yeah, I know that you only have two girls, but I could tell you that, man, when my daughter speaks, it's like daggers. It's just cut throat, right to the point, extremely distinct, and you're like, okay, got it. Whereas my boys are a little more, they can be emotional, but they're not as direct. Yeah, that's funny.

All right, so I want to touch briefly on Brendan, because you mentioned him in a few of the other podcasts, but it's very, very brief. So, for one, who is he? I know he's obviously... Yeah, so he's obviously a business partner of yours with Ferio Tego.

You know, where did you meet him, and how did that relationship kind of build? So, before Ferio Tego, I worked at a company called Nat Sherman. I've heard about them. I like how he just says it like nobody knows who that is.

Well, some don't. I mean, let's face it, it was... We really only built the cigar business starting in 2011, so even though, you know, people that were from the Northeast or maybe even Florida because of the connection to New York had a lot of relationship with it, but otherwise, you know, if you go to Chicago, no one ever heard of that Sherman really, so I don't want to assume people know it, plus it's been gone for five years, so people who just started enjoying the hobby in the last five years wouldn't know about it either. So anyway, I worked for Nat Sherman, I got hired in 2011 from Davidoff, and Brendan was the CFO of Nat Sherman, he started a couple years before I did, 2009, and so he was actually really instrumental in either advocating, if the family wanted to keep the retail business and keep the cigar business, that they really had to go all in, take it seriously, fix some of the problems and make it a real business, and, I mean, Brendan tells a story really funny, That the Shermans, they were dealing with this recruiter who was like, we have to get somebody like this guy, Michael Herklots at Davidoff, and they kept bringing in these candidates, and the family would be like, well, you gotta find someone more like Michael, and then the recruiter came in one day and was like, how about we just go get Michael, and Brendan was like, finally, that sounds like a great idea, and then they reached out to me, and we had some meetings, and then, you know, it was like, right as we were doing the deal, Brendan tells me the story, it was so cool.

I'm like, all right, well, let's, you know, if we're going to do it, let's do it. So then we really got to work building the business, you know, and trying to grow it and being thoughtful. And, you know, I really appreciated his support, but also his discipline. I mean, he's a CFO, so like we were talking about this in the store earlier, you have one person who thinks very reasonably, very responsibly, disciplined, this is numbers, this is revenue, this could be investment.

But let's just look at this pragmatically with zero passion. I wish I could do that because I look at things exactly the opposite way and forget that things have costs and, you know, you need to get more than you're putting out and all that kind of stuff. And so that's what we did all through our time together at Nat Sherman was work together to grow the business, balancing my impatience So we worked great together, not without conflict, but it was great conflict because we had the same goal in mind, and so it was terrific. And then when Nat Sherman sold, then we worked together on that acquisition and transition into Altria, which was a pretty substantial body of work.

And then we grew the business together. We worked together with Altria for whatever it was, three years, and then COVID hit, and then we had to work together to try and sell the business in 2019, which we tried to do first, then when COVID hit, it killed the ability to sell it, and then we had to work together to close the business, and so when it was all done, you know, we were much closer than we had been ever, you know, and so then we were talking about who was doing what, and I was gonna do this Ferio Tego idea and just start something small and new he was going to take time off through the holidays and then look for something later but then the opportunity came um where we might be able to acquire the old brands and uh i i had engaged with altria and said look if you're willing to sell the brands we're going to buy the brands and so they were like look you got to put an offer in because other people are bidding and if you want it you know get serious i'm like i'm fucking dead serious so i called So, Brendan, I'm like, they're gonna sell the brands, and he's like, well, you know, I figured that was gonna happen, and I was like, well, I told him we were gonna buy the brands, and he goes, who the fuck is we? I'm like, alright, listen to the idea here. " And we got to work.

- And you had the relationships. - And we had the relationships. - Right. So...

- But we also trusted each other, and that was a... - Yeah, huge. - Like, if you think about that moment in time, especially in the Northeast, I mean, it was absolute chaos. You know, the pressure of COVID, the working from home, the literal deaths and health issues that were affecting so many people up there.

I mean, it was such a distressing time and now we're winding down this business and we were just exhausted, like just beat up and exhausted and at the same time, we're losing our jobs and we have to come up with whatever this new plan is gonna be and how do you even think about it when you've been stuck at home for nine months and just everything has gone wrong and so, you know, our business plan was like an afternoon of just brainstorming. Like, how might this work? And what could go wrong? And, you know, where are we exposed?

And is, do we really think this is going to work? Yes, it's going to work. Like, it has to work. And then I remember we just looked at each other.

He's like, look, I trust you implicitly. Can you make your side work? I'm like, a hundred percent. Can you handle all this, all the finance and all the back end and putting together the corporate structure?

He's like, a hundred percent. I'm like, dude, we've already done this before. Like, let's just fucking do it. He's like, all right, let's do it.

Then we had to tell our wives, which was a whole different, that was a whole different part of the process. But an equally good one. And they said the same thing. Like, you know, Brendan, you don't, his wife, like, Brendan, you don't know anything about making cigars.

Like, yeah, but he does. He's been doing it. And my wife's like, but you don't know how to, you know, do books and business stuff and whatever. I'm like, of course not.

I just know how to do everything up until that point. And that's, he's the CFO. He can do it. But together, we've been doing this already.

Let's just do it. And they were like, okay, go for it. So does he go to PCA too, or no? Oh yeah, he travels a lot, he does a lot of the industry stuff, he works a lot, we're distributed by Davidoff, so he works very closely with Davidoff in all of our planning and procurement, and then he works a lot with the factories, doing that planning and procurement, all of our corporate stuff, all of our trade stuff, and then he would come to every event that I go to, it's just, you know, it's very expensive to pay for two flights, and two hotels, and two… You can't stay in the same room?

One bed? Excuse me, I have a call. Hello? No.

So, you know, we're like local stuff. He does a lot. He's coming to Great Smoke this weekend. So he does a lot of the stuff and is doing more and more.

But if it's, if we're talking about a week in market with our representation and doing events and do it, it's better that I just do it solo and then he focus on still maintaining all the operations at home. That makes more sense. Yeah. All right.

So, Davidoff handles your distribution. And obviously you had a relationship with Davidoff, right? As Michael Wasp was, you know, high-fiving in the background over here. How did you get that to happen?

And what did that look like? Was it just a phone call? Was it a whole pitch? You know, because that's a big deal.

Having Davidoff handle your distro, that's up there. It's about as up there as it gets. Yeah. " For sure.

So I worked for Davidoff for nine years. Then I left Davidoff to join Nat Sherman. One of the blends that we make, our Metropolitan Host, was made by the Eroa family in Honduras that Davidoff subsequently bought in 2008, I think. They bought Camacho.

Camacho so that product that project stayed in that factory after Davidoff bought it when I joined Nat Sherman we were going to get serious about the cigar business and literally my first call on my first day was to my buddy JT at Davidoff you know like okay first day what are we going to do like we have this project here it's we're going to grow this business like we have to really work together so we immediately started working together again working on this host project and then we also had So I brought in some of the Davidoff brands into the Nat Sherman Townhouse and so it was just a an uninterrupted relationship from 2002 until 2020 and throughout the process we were keeping all our factory partners up to date you know when we were trying to sell then when COVID hit then we couldn't sell now we're going to wind down the business like it was constant updates to the factories of look this is where we are now this is where we are now so the last call we made in the November was, hey, don't throw anything out, don't do anything, we just bought the brands, so after the holidays, when you reopen the factories, let's engage, and let's talk about what this is gonna mean, and so immediately, they were like, great, we'll get to work, but how are you gonna sell this? Like, I have no idea, but we'll figure it out by the time these cigars are ready, so can you just start production? Which is, by the way, a whole other piece of this story, by the time we started production, now you're in the height of the COVID boom, and every factory was already at max cost. " And they put us in the front of the line, all three factories, and they started manufacturing based on what we thought we were going to be able to sell, with no money, because we had just spent all our money.

" All of them. The cigar rings started printing, everyone started manufacturing, and we didn't have to give a dime. That's awesome. And that's because, you know, my parents and my grandparents, they really believe in, like, you do the right thing, you stay above board, you respect people, you know, you treat people right, and I've always operated that way, and when all of a sudden, you know, this whole culmination of things happened, and I needed that little bit of room.

Every manufacturing partner was like, no problem. So then we're continuing dialogue with what's happening with production, what's happening here. These are the options that we're looking at for distribution and fulfillment and storage, whatever. And they said, you know, we should look at this.

Like, this is an interesting opportunity. Like, let's look at what we can do. And so we took a very different approach rather than just fulfillment or just representation. It was a much more, it was a very different way of structuring We were doing a distribution deal, but ultimately it ended us up in the portfolio, sitting next to AVO and Camacho and Zeno and those great brands, let alone Davidoff, and so ultimately that became the plan, which was awesome, but then the other problem is, now we went from Brendan and Michael and a couple of brokers figuring out how to bang on doors and sell cigars, to now we were going to restore these brands through Davidoff distribution, which was enterprise level distribution, we didn't have enough product.

on order manufacturing so then we had to call the manufacturers again and like okay you want to know how we're going to sell good news we're distributed by davidoff that's great news yes here's the updated po's and we need you know another 40 of what we said we were going to need on top of what we asked for and we need it by september and they're like what are you doing like we're gonna we're gonna do this right bro we had a hundred percent of our orders from all the manufacturers We're sitting in Pinellas Park, Florida by the third week of September. No kidding. Wow. All three?

Everything. That's impressive. I mean, to get one to do that is different. Everything.

Dude, Plasencia, Esteli, COVID boom, 100% delivered and right. Okay. No wet cigars, no bullshit, properly aged, like real deal, beautiful work. Wow, man.

All right. So, you start to take off here. And one thing that you've mentioned in previous podcasts, too, is the fact that if you were knocking on doors, okay, realistically, maybe you get to like 100, 200 accounts, maybe in your first year, but you kind of launched into a fact where you had 500 to 1,000 accounts somewhere in that realm, right in that threshold, so now you have PCA coming up, and you always kind of have these goals, I would assume, as far as where you want to be, what would you want to be? " How many accounts would you want that were new to open up Ferio Tego this year?

It's not the way I view a show. I should ask Brendan that question. It's a Brendan question. Well, you know, like I think every year we probably get 40 or 50 leads.

I think that's a really nice number. That's a realistic number. yeah yeah um but you know we count the leads we follow up we share it with the davidoff crew they follow up but more than just the leads for me it's the conversations and sometimes those conversations are with are with um our current supporters but look if if we have to fly all the way to new orleans or las vegas to write an order everyone is doing something wrong right but if If you're together with the majority of the industry, the best in class, are we really going to say two boxes of this, three boxes of this, five boxes of this, or are we going to talk about, tell me about your business exactly, and how you do business, and then let me share how we do it, and are we really making the most money together that we can, or what are we missing? So for me, it's the strategic conversations and like the real demonstrative moments of partnership that I leave saying, "Okay, these are the opportunities for this year.

It could be a special project. It could be a series of events. " Those are how we measure success. The sales are great.

The leads are awesome. But leaving with a strategy with, you know, two dozen partners, that to me is the measurement of success. And I think Brendan would say the same thing. Okay.

So yeah, that's kind of incalculable. Of course it is, which I know is brutal for financial people and people who think, you know, like most smart business people do. But as an artist, it's, you got to think differently than that. You have to think about, you know, who loves the work and who resonates with your story and resonates with the products that they will go out and share it and evangelize it and tell the story over and over and over.

That's worth more than, you know, a five store order. Sure. Is there a retailer, let me ask you this, is there a retailer that you've kind of seen maybe as of late in like the past six months to a year that you're like, that's somebody I would want to do business with. I like how they do things.

Whether you see them on social media or wherever. Of course. Yeah. Who is it?

You. We already do business. I know, but that's where it started. Yeah.

That's exactly where it started. Yeah, of course. It started at FPCA. And there's a handful, but at this point, we're three years in.

Right. Three and a half. And though Ferio Tego is in no way a household name, but I think among the The best-informed, well-educated, savvy members of our industry, I have to believe they've all heard of us and hopefully seen ratings, seen reviews, seen the success of our brand in market since our launch. So if we're still not doing business, then I don't know if year three is the year that I should be trying to convince someone?

No, yeah, I don't think that that's, I'm not, I'm not looking at that aspect. You know what I mean? I just think that... So sure, there's, there's great stores out there that we are not in.

I just think that real recognizes real sometimes. " You know, or you see, you just see them. And you can see that they're working hard, whether they're supporting your brand or not. So I have those conversations.

And once in a while, they work out great. Yeah, as we did. Yeah. Um, and sometimes they say, Oh, thanks very much.

Congratulations to you too. And I'll tell you what, man, that was you're not doing business. Our conversation was like a breath of fresh air. For me, PCA is so up and down, you know, they're really high highs and they're really low lows, right?

Of course. So you can, you can be sitting there for an hour or two with nothing going on and, you know, And then a retailer comes along, and they just punch you in the gut, you know, with, we hear the, I don't have the shell space, I'm not really interested, I just want to really try the cigars, or, you know, you could just tell that they just want some free sticks, and they just want to move on their way, right? Or they want to get out of the conversation. Yeah.

Which is also fine, bro. Right, I don't want to sit here and talk to you either. Right. Right, 100%.

So, you know, I think that on that day when, when we had kind of reached out, when we, when we had kind of met, I was like, that was fucking awesome. You know, that was, that was definitely, uh, You hobbling on one wheel. I was your leg. I did.

I popped my calf. So, so I'm that retarded dad that will do everything with their kids as far as athletically. So when it comes to playing flag football with them or practicing or anything like that, I'll go full sprint and stuff. And, uh, after it snaps, I continue to play with them anyways.

And it may come It was no surprise to you. I'm not that dead. And I have never snapped anything, bro. Oh, man.

I've popped both calves at this point. I don't even have calves. Yeah. I go from knee to ankle.

That's fantastic. There's no calves. How do I get that? I'd like that.

Just stop doing stuff? Like eating? Just give up food? That's it.

I really like food. I hear you. I do too. All right.

So if you're kind of looking back, like you said, you're still kind of in your infancy, right? Right? Of course. As you look at a child.

Exactly. Yeah. " Would you have done anything differently, looking back, saying, as far as your approach? In a perfect world, we would have done things differently.

Okay. In a COVID world, we just did it the way we did it. Sure. So, like, Flow, we launched Ferio, we also shipped Timeless, the first two Timeless at the same time as Ferio, um, it didn't give a lot of, we didn't leave a lot of room for, um, brands to be re-established, because we felt that it was so important to get the Timeless and Metropolitan brands back on shelves as quickly as possible to close that gap of absence.

And it seemed critical at the time. I don't know if it was critical, necessarily, but it made the most sense, given our manufacturing partners, our distribution partners, it just made the most sense at the time. But, you know, looking back, I don't know if I would have rather let Ferio live for a little while longer, and maybe launch Timeless & Metro in the first quarter of 2020, But, you know, time and place, man, it was just such a wild moment, and there were so many things happening, and it was just like, let's just, let's just do it. The faster it's done, the better for everyone, because then we can figure out what normal is going to be.

Because the other thing is, we didn't have a normal launch anyway, because it's not like this is a brand new brand, a brand new company, we're going to start with store one, right? Here's person zero, and then it's two, and then it's four, and then it's eight, because we let it rip through Davidoff's distribution, so day one, when we launched Eleganza and Generoso, we shipped to 400 stores the first day, so we couldn't take that approach anyway, you know what I mean? So, I don't look back with regret, I look back with like, you know, some level of combination of like wonder and PTSD that even got through it all. Well, you kind of always look to get better and the only way you can get better is if you kind of look at the past, right?

" It's like you've never said that in your life, why would you spend the next 15 months trying to reset your life back in 2019? And things will never be the same. They will never be the same and if you take the opposite approach and you learn during this period and you get scrappy and you get agile and you try new shit that you never would be able to do before, you're gonna come out the other side way better than you were in 2019. And I really think we did.

I think we've established a very small business that has a super comprehensive portfolio, and now we have the benefit of a great core portfolio that we don't have to innovate with. We just have to tell each story over and over and over and over again and continue to build the equity in the brands that we already have. Do you think that, I mean, Timeless and the Metropolitan are two totally different things when it comes to comparing Ferio Tego? Do you feel like, because you released him at the same time, Ferio Tego just didn't get enough spotlight at that point?

It did. It got lots of spotlight. Tons of spotlight. But again, it was only two SKUs.

Just Elegance and Generoso. I didn't have the, I wanted to do Suma, I wanted to do Core, but I had to get Metropolitan and Timeless back because these were important brands to people who have been selling them upwards of 30 years, like, you know, we got to get those back in market. Yeah, and it became a point where customers were out seeking them for, through other retailers, like, you couldn't get them anywhere else and once they were gone, they were gone, you know. And then we finally got Suma out a year and a half ago, two years ago, and I, then it was like, okay, boom, now Ferio Tego has presents beyond just two boxes now, and that is really lifted everything.

So I, I, I don't have regrets. I think we did it. I think we did exactly what needed to be done in our circumstance, which is, there's no, there's no case study for what we did. No.

You know, you can look at lots of startups, lots of cigar startups, and you can learn which ones did things well, and which things, which people didn't, and, but, there's no way, no, if anyone wants to do it, we are the first case study, so, feel free to, to beat us up and figure out what we did wrong, but, we're a one of one story, for sure. So now, okay, so we're going into PCA. You have, you know, more often than not, a lot of brands like to do limiteds, right? Some will do it every month, which you've kind of spoken your opinions on.

And then some will, yeah, maybe once or twice. And some will talk about maybe one release every quarter or maybe just two or three throughout the year. A lot of consumers, brand owners, manufacturers And so many publishers will actually use that as kind of an incentive to book an appointment at the show so that they can get that traction you don't have a limited right so what is your way of pulling other retailers into your store right into into the booth to really kind of talk about Ferio Tego because as as much as memes rule the world yes chorus King okay I agree. You can look at, I'll look at any retailer's point of sale system and look at their top 10 selling SKUs and they're not limited.

Well, just overall volume. I mean, that would make more sense. So what do you sell when you run out of the dog booger 2024? Well, the dog booger, the 2024 year was really good.

So I would put that in a sample. I'd put that in a sampler pack with the other, with the dog booger. But you know what I mean? Retailers need a sure thing.

Sure. And, eventually, retailers want brands that they don't have to evangelize because they're brands that their customers already know, love, trust, and want to buy. That's our model, and it sounds like a very, you know, new way of thinking or prehistoric way of thinking, but it's just, it's the way it is. I mean, if you look at the strongest brands in our industry, the most time-honored are often the ones with the least amount of innovation because they're just doing it over and over and over and over and over.

Yeah, I mean, that's not critical. It's not making me sound like criticism at all. Frankly, it's admirable because that's real brand, real brand equity. I think that that's true.

But now if I look back at the end of 2024, and especially Q3 or Q4 of that year, you started to see a dip, right? You started to see consumers smoking less. And a lot of those brands, what they did was they started pushing out a lot of different limiteds, you know, to boost their sales, to further that number so that they could finish off positive for the year. right so you know i don't have the answers me neither you know what i mean and and i love your view on things i love your perspective on things i believe on the whole chorus king thing i also believe in uh bringing attention back to the brand when it comes to one-offs or different things i do too and we did we did a we did a limited edition timeless right uh in 2022 um we're going to do a They've been doing a limited edition this year on another project, so to me, as long as they're thoughtful, like you can see the difference when you, look, I'm a Davidoff fan forever and now, you know, more so because they do our distribution, if you look at what they're doing, they're not just dropping flavor of the months every three, they're meaningful releases, commemorative releases, they have a real thought and structure, they can answer the reason why they exist.

Right. And it's not to close the gap on a tight year. It's because they're bringing something memorable and different to either celebrate a moment or offer an experience that can't be offered in mass. And I take that approach.

Maybe it's because I learned under that discipline for so long. So if we have something to celebrate, absolutely we're going to celebrate with something special and limited. But, you know, it also depends on where you are in your journey as a brand. So if you're an established brand, time-honored brand, then sometimes you need the headline and excitement of something new to keep your time-honored brand feeling relevant in a time when all these new things are happening.

But we are this kind of hybrid of legacy and new and being a three-year-old company with three brands, 12 blends, we have something new that you don't sell and it's much, to me, it's much more thoughtful to, rather than bring in something brand new that no one's ever heard of, so we're going to bring in something brand new that no one's ever heard of, we're going to be able to bring in something brand new that you don't sell. Yeah. And it's much, to me, it's much more thoughtful to, rather than bring in something brand new that no one's ever heard of, we're going to bring in something brand new that no one's ever heard of, and it's much more thoughtful. It's brand new, that no one's ever heard of, that everyone has to tell a new story of, well, if you don't have Ferio Tego, Timeless Sterling yet, make that your new, you know, let's grow the business with something that already has fans, so you can see a faster return, so that you can help build the equity and make, continue to make these brands and blends the ones that people go to after the shiny limited meme cigar is sold out.

You know, our portfolio is big enough, there's 14 stories, it's a lot of stories to tell, and you add one more, that's one less that they're going to tell from the 14 we have. Yeah, totally, and there's definitely some self-cannibalism or whatever, where, you know, your consumer is no longer smoking the one, they move to the next one, and so on and so forth. Yeah. I mean, I could see all of those things.

I can also see the fact that a lot of retailers aren't really good at their jobs, you know, that's always the downfall in this industry. And sometimes, like, to bait the hook, to keep them interested, you know, sometimes companies will make a new cigar every month or something like that. And I don't necessarily agree with it. I don't think I disagree with it either, you know.

What the cycle has shifted, when I started, company, brand creates cigars, retailer discovers brand, retailer and brand form a relationship that then the retailer evangelizes to their consumer, they share the excitement and the moment of discovery to the consumer, the consumer appreciates retailer and then discovers brand. Which is how it should be. And then goes back to retailer, retailer goes back to brand. Right.

Now, brand makes a product, then brand has to make customer fall in love with it, customer has to ask retailer enough times for it that then the retailer will order it, and then when it gets to the store, brand has to tell customer to buy it, and then they have to go back and find it. And then, come back again. Which is crazy. But it is what it is.

It is what it is. You know, it's, it's not frustrating when it's just the norm, it's not just our industry. Right. It's beer, it's sneakers, it's, you know, the whole relationship of brand and consumer and retail has just shifted because it's become easier for consumers to have relationships with brands.

Right. And so, if that's what it is, no problem, then it's our job to make the retailer's job easier. It's easier. For sure.

It's just the way it is, you know? And if you fight it, then you get frustrated, but you also don't win. No. So you have to just look at it.

If this is the language we're talking now, then let's go, you know? Right. No problem. I'm going to work harder.

I'm going to do more events. I'm going to get out on the road. I'm going to help make the relationship stronger with our retailers, but I'm also going to spend most of my time with your consumers. And your consumers are going to come because I'm the one that put it out on our social brand, our brand social media, to connect that circle again.

Right. But that's what it is. Right. All right, I got two more questions, a little, you know, a little bit further down the road here.

Okay, so speaking of that structure, I had a customer of Postanya reach out to me today. They emailed me and they said, "Hey, I bought some cigars. I got it from a retail store and I've just received the product and it was all extremely dry. Now I know this account.

I haven't done business with this account for years just because I didn't like what they were doing with the product. And I'm not the person to have that argument. I'd just rather say, man, we're done here. Customer asked me if there's anything I could do for having those bad cigars.

Yep. So, what do you do in that situation? Well, first of all, I always respond. Me too.

Because lots of brands just ignore it. Yeah, you can't dead air it. So, you have to respond. My rule is always, look, as much as I'm grateful for our relationship consumer, we live and die with our relationships with our business partners.

So you're not a customer of ours, you're a customer of theirs, and so the first thing is, you have to reach out to your retailer, because that's who you did the transaction with, and I can reach out to the retailer, but you did the deal, so you should really work out with your retailer how to make that whole, but keep me in the loop, because if that retailer says, "Hey, Pound Sand," well, obviously, they're not looking to keep you as a customer, ever. And so then, if I know that it's in our best interest to keep that customer as a customer, then you find a way to help them out. And, you know, I don't think it has to be 100% restitution. I think people are really just looking to, it's almost just a pulse check on, you know, how serious are you, you know, what are you going to do?

But I had a guy actually reach out the other day who said he bought, oh, he was saying that when he takes the foot band off his elegancia, it pulls a little piece of the wrapper leaf off. Oh, God. And it's happened, you know, four times. And he sent me a picture of the foot.

And I said, look, first of all, thank you for sending this directly to me. And, you know, I'm sorry to hear it. And foot bands are tricky. And, you know, you have to take a little care, the good news is the cigar didn't unravel, it didn't fall apart, and as soon as you light it, that part's gone anyway, but obviously that's not a fault of your manufacturer, that's just one of the realities of this, it's not a systemic problem, certainly, or I would know it, but if you'd like, when I get back to town, if you want to give me an address, I'd be happy to send you a couple elegancias, and I'll take the footbands off myself, and that way, you know, they'll be alright.

And he wrote me back. He's like, "All good, man. No sweat. I just wanted to let you know.

" That's cool. Perfect. You know, but if you said, "Hey, that'd be great. " All right.

I'm not gonna... I can't send you a whole humidor full of cigars, but I'll send you a couple cigars. What the hell? You know?

For sure. Okay. That's a good way to handle it. But on larger issues, I bought two boxes and they're dry.

Well, they weren't dry when we delivered them. Right. And so you really have to have this conversation with your retailer. Right.

And then, of course, you have to evaluate your relationship with that retailer, too, because if yours are dry, they're all dry, and if they're all dry, that's the end of that. Right. All right, one last quick topic. So, I don't know if you've seen this circulating, but Aficionado is allegedly being, there's a lawsuit pending with them as far as selling data.

Really? Yeah. You haven't heard that at all? He doesn't subscribe, so he's not getting any of that.

So, you're not a subscriber. So, it's been, it's been, so here's what's kind of remarkable to me, is it's kind of all over social media. it's like it's in my feed you know really yeah like recently yeah i've been on the road i haven't looked at my feed so you know i get hit up with this and i'm thinking to myself wait a second how do you know that this fits for my profile right like how did instagram give that away to the lawsuit people about aficionado you know i'm saying i don't even understand what it is so So they're supposedly, aficionado had sold the data of their consumers, without the consent of the consumers knowing. Name, address, phone number, that type of stuff.

Yeah. And now there's this lawsuit that's pending on aficionado. So you haven't heard that yet. Who's suing them?

It's a class action suit some lawyers trying to get together. You know what, man? Everyone has my name, address, telephone number. I mean, honestly, guys, what's it worth anymore?

Could you imagine trying to say, hey, listen, I have this really valuable database of name, address, and phone number of men between the ages of 35 and 60, 30% who have died already, and I don't know. I thought that was kind of crazy too, right? Because, you know, our phones listening to us 24/7, if I say electric scooters, all of a sudden they're going to be on my feed, then that's perfectly fine. But meanwhile...

It doesn't feel like a class action lawsuit that's going anywhere. And I have to believe that my data has been sold so many times, significantly greater volume, greater price, and to higher targets than whoever would want to buy Scarficionados list. Right. So I won't lose sleep over that one.

No. I just thought it was crazy, man. It is crazy. All right, well, I think that's pretty much where we're going to wrap things up, man.

This was great, bro. Thank you so much for coming out and doing this podcast and doing the cutting light upstairs. I appreciate the opportunity to share the story because as many times as you share it, there's still infinite number of people who haven't heard it. Sure.

I mean, I told you last year, I think what you guys are doing with this show and with all your content and all your work, even the shop, I mean, if you guys haven't been to this store, it's so well appointed, it's so well lit, you know, you know who works there, you know who doesn't, it's, yeah, I was saying to one of the guys, like, I've been in, I've probably been in 600 stores in the last three years, two and a half years. And you just know when a shop has it right and immediately you're like, you're in the 1% of the 1%, you know, which seems so crazy but when so many stores are doing things so poorly, not because it's bad but just because they're not thinking differently or trying harder. When you walk into a business that is clearly focused on the business and the customer experience and caring about your vendors and making sure that it looks good and it's well lit, man, it's just such a relief because you know that the scenario that you just described with the gentleman with dry cigars from a bad retailer would never happen here. Correct.

that we were talking in the car there's and you asked the question too are there retailers that you want to be in sure i want to be in every retailer and there's legacy retailers that have been in business forever it would be an honor to have a place in their humidor but i'm also really proud to be in the new stores and the smaller stores and the and the single It's just like this is where we wanna be, this is where we're gonna grow, because this is where our story is gonna be shared, and told, and loved, and revered, so I'm, from this, to the show, to the store, it's just, man, you guys do it, you do it right, I'm super pumped for the rest of the night. Thanks, man, I appreciate that, dude. And then you're gonna be at The Great Smoke. And then The Great Smoke, man, Saturday.

You're gonna be there this Saturday. It's gonna be awesome. It always is. Yeah, it is.

It's a great experience, for sure. I'm hosting the virtual site again, so I got a full day on camera, and I don't know when this is going to air, but... I'm probably going to release it tomorrow. Oh, cool.

So then, if you're watching this on Friday, then make sure you can tune in Saturday on YouTube and Facebook and watch The Great Smoke, too. Full dose of Michael Herklotz throughout the weekend. Brutal. Do it in small doses.

Break it up a little bit. Well, thanks again, bro. I appreciate you coming out, man. Thank you.

All right, guys. Thanks. Subtitulado por Jnkoil

Show Notes

In this interview, we have the pleasure of speaking with Michael Herklots, a true visionary in the world of premium cigars. As the co-founder of Ferio Tego Cigars, Michael has been instrumental in reshaping the landscape of the cigar industry. Known for his deep knowledge, unwavering passion, and dedication to the craft, he shares his insights into the artistry behind Ferio Tego's exceptional cigars, the future of the brand, and his personal journey through the world of fine tobacco. Join us as we dive into the mind of one of the most influential figures in the cigar world today.