By Bob Ross
Tampa Tribune
November 13, 1995


1895 was not a good year for workers in Cleveland.

Factories were closing, jobs were scarce - especially for a 20-year-old Hungarian immigrant.

Julius C. Newman couldn't find an employer, but he had experience as an apprentice cigar maker.

So, as he recalled in his 1957 autobiography, "I decided to make my own cigar table out of some old boards and to turn the family barn into a one-man factory."

He borrowed from relatives, bought $ 50 worth of tobacco and within a week or two he had rolled and sold 2,500 cigars.

One hundred years later, one of his sons and two of his grandsons own M&N Cigar Manufacturers Inc., the thriving, Tampa-based business that the Newmans have built into the nation's largest importer of premium cigars.

It is also the country's oldest nationwide cigar company still operated by its founding family.

Survival was a struggle, especially the first 90 years.

World War I created massive problems. Shipping was restricted and prices soared - not only for tobacco, but also for paper and wood needed to make labels and boxes. Prices were driven up by higher federal tobacco taxes. Labor unions demanded higher wages.

Not only that, but after 50 years of cigar dominance in the smokers' market, a serious challenger arrived. During the war, cigarette companies shrewdly supplied the Red Cross with millions of free samples for soldiers. Servicemen who had been cigar smokers came home hooked on cigarettes instead.

The J.C. Newman Cigar Co. faced plant closures and possible bankruptcy. There had been nearly 300 cigar factories in the Cleveland area in the early 1900s. In 1927, the city's two main survivors - J.C. Newman and Grover Mendelsohn, who owned the Rigoletto brand - joined forces to create M&N Cigar Manufacturers Inc.

The merger was accomplished just in time to meet another crisis. The Depression wiped out huge chunks of the cigar industry. Production plummeted from 8 billion cigars in 1920 to 4 billion in 1933. But the percentage of machine-made cigars skyrocketed, from 18 percent in 1926 to 75 percent a decade later.

M&N survived the crash - and the national imposition in 1933 of a minimum wage for its workers. In 1938, J.C. bought out Mendelsohn.

In 1935, J.C.'s 19-year-old son Stanford started working as a salesman for the company. Soon, Stanford was studying the tobacco business from farm to factory. After his World War II military service, he returned to the family business to stay.

Tampa's world-famous cigar industry was changing during the postwar era, but one factory's demise became M&N's opportunity. In 1953, J.C. Newman bought the recently vacated, 100,000-square- foot Regensburg factory at 2701 16th St. in Ybor City, where the company still is located.

J.C. Newman never retired. He worked until he died in April 1958, a few days short of his 83rd birthday.

Five months later, Stanford Newman - aware that the company needed to acquire a major premium brand name - bought the well-known Cuesta-Rey label from Tampa manufacturer Karl Cuesta.

During the '60s and '70s, Cuesta-Rey and Rigoletto kept M&N among the nation's sales leaders. But it wasn't easy, especially after Cuban tobacco became unavailable in 1961. Stanford Newman obtained enough African Cameroon wrapper (the cigar's all-important outer covering) to keep Cuesta-Rey competitive.

Stanford's brother Millard had been the company's director of sales since 1947. Stanford's sons Eric and Bobby both learned the cigar business and joined the company upon earning their master's degrees in business.

Today, Eric, 47, is the company president. Bobby, 44, is executive vice president and Stanford, 78, is chairman of the board.

From 1958 until 1986, Stanford Newman owned one-third of M&N, Millard Newman owned another third and their sisters Elaine and Helen shared the remaining third.

"Family businesses are all difficult," Eric observed last week, "especially when it's in the third generation, and in an industry that is not expanding. Something had to be done."

At first, Millard Newman - who is also a noted collector of antique Rolls Royce automobiles - wanted to buy out his brother. But he couldn't arrange the financing without mortgaging his prized car collection.

So Stanford became the owner instead.

"We gave up the capital in the company," Eric explained. "We (Stanford's side of the family) got the stock, and they (the other siblings) got the funds. For the next five or six years, I wasn't sure if it was the smartest or the dumbest move we had ever made. We were heavily leveraged from the banks, and they were nervous at the time because of the S&L crisis. They were stern with us, but fortunately, things worked out."

Eric Newman now calls it "a miracle." Only three weeks after the '86 buyout, famous cigar maker Arturo Fuente "asked my father to get together on a deal."

The deal was a milestone for both parties. Fuente needed a solid American distributor and the Newmans needed a reliable offshore manufacturer to get them into the burgeoning market for premium, handmade cigars.

So M&N became Fuente's exclusive American distributor, and Fuente's factories in the Dominican Republic starting making Cuesta-Reys and La Unicas for the Newmans.

"We put our strengths together," Eric Newman explained. "Their big strength is manufacturing. They are second to none. We feel that we are the best at selling cigars. It has been a great mutual relationship. And our association with the Fuentes makes us the largest cigar importer in the country."

Imported cigars are from four main countries. In 1994, Newman said, 67 million of them came to the United States from the Dominican Republic, compared to 57 million from Honduras, 11 million from Jamaica and 6 million from Mexico.

M&N brands account for about 24 million cigars a year, or 36 percent of the total Dominican market.

The numbers will never be as big as they once were. In 1964, Eric Newman said, there were 8 billion cigars sold in the United States - a peak provoked by the surgeon general's report that cigarettes cause cancer. By 1992, cigar consumption was down to 2 billion a year.

"It will probably go up to 2.5 billion this year," Eric Newman guessed, "but that doesn't tell the story because dollar sales are greater than ever. The big surge has been on the high end. A whole wave of younger people are paying good money for good cigars. So manufacturers can afford to make a better product, and growers can afford to raise better tobacco.

"When Grandpa J.C. started, everything was rolled by hand," Eric said. "The whole industry has gone full circle, from handmade to machinery, and now it's going back to where we were 100 years ago."