Villiger Cigars North America Restructures For 2016
European concern Villiger Söhne AG is in the midst of restructuring its cigar division, Villiger Cigars North America Inc., a subsidiary formed especially to distribute its handmade cigars to the U.S. market. The major changes include a relocation of its headquarters from North Carolina to Miami, appointment of new management and a move to more in-house sales , as opposed to independent sales representatives.
Though Villiger has been producing machine-made smokes for 128 years, it's only been making cigars since 2008, when it debuted Villiger 1888, a handmade cigar produced in the Dominican Republic. In the past eight years, the company has made some headway in the U.S. market, adding many brands to its portfolio like the Villiger Colorado and Villiger Talanga (made by the Plasencias in Nicaragua), as well as edgier brands such as Cabarete and Trill, which were blended and packaged to appeal to younger smokers but do not carry the Villiger name.
But the company has recently gone through a number of leadership changes. In late 2014, Villiger Cigars North America (VCNA) dismissed its president Roy MacLaren as well as its director of marketing. The responsibilities were divided among company CFO Patrick FitzGerald and vice president Shawna Williams—both of whom parted ways with Villiger in the second half of 2015. Currently, Villiger Cigars North America has no president nor a CFO, but announced that it will be naming a new general manager in the near future.
"We will be naming our new general manager who will guide us into this new phase of our North American entity," said Michael Blumendeller, managing director for VCNA. "While it is not yet time to reveal this new GM, rest assured this person comes to us with many years of experience, specifically in the cigar industry."
Villiger has also let go a large portion of its U.S. sales force. "As part of this restructure, we have determined it best for the interim to strategically move to a sales structure of brokers and inside sales ," Blumendeller said.
In April of 2015, VCNA entered a logistical agreement with Sutliff Tobacco Co., which currently provides warehouse space and backoffice sales , such as customer service, invoicing and s receivable. The move was made in order to allow Villiger to concentrate more closely on product development and market trends. The logistical relationship between VCNA and Sutliff (one of America's oldest pipe tobacco companies) ends on March 31 and will not be renewed for 2016.
Another major part of VCNA's restructuring is its physical relocation. This year, Villiger plans to move its headquarters from Charlotte, North Carolina to Miami, citing easier access to the ports of entry. A Miami presence also means shorter distance between company headquarters and the factories that produce their cigars, which are located in Nicaragua, Brazil and the Dominican Republic. VCNA is hoping to be fully settled in Miami by the end of March.
Despite the somewhat turbulent changes, Villiger has not ignored product innovation. At the 2015 IPR trade show in New Orleans, Villiger introduced new cigar brands to the industry—Villiger San'Doro Colorado, San'Doro Claro and San'Doro Maduro as well as Villiger Celebration—a good indication that VCNA is still interested in developing and expanding its market position in the sector.
In business since 1888, Villiger is best known for its dry-cured, machine-made cigars, and it sells roughly 1.5 billion of them annually. The U.S. remains its largest market for cigars. For updates on Villiger's new strategies for the U.S. market and information on the new general manager, see an issue of Cigar Insider.
This article first appeared in the January 5, 2016 issue of Cigar Insider.
