How Ferio Tego Cigars are Like Your Favorite Song (Feat. Michael Herklots) | Ep. 49

 [Rob Gagner] – Say the name of the company for me.

[Michael Herklots] – Ferio Tego.

– Ferio.

– Ferio Tego.

– Tego.

– Ferio Tego.

– Boy, I think this morning in the shower, I said it six different ways, in my head.

– Let me hear all of them.

– Ferrario Tegow.

– Great. No.

– Fierro Tigo.

– That one I hear a lot, not correct.

– Now you’re gonna mess me up. What is it?

– Ferio Tego.

– [All] Ferio Tego.

– Ferio Tego.

– [Rob] There’s a story inside every smoke shop. With every cigar and with every person. Come be a part of the cigar lifestyle at Boveda. This, is Box Press. Hey everyone, welcome to another episode of Box Press. I am your host, Rob Gagner. I am at 2021’s PCA show and I am sitting next to Michael Herklots. Now, the name is, not just the myth and the legend, but he is a legend, but, he’s here now with his brand new brand, Ferio Tego. Michael, thank you so much.

– Ferio Tego, good to see you my friend. You’re good?

– I’m great.

– 9:00 a.m. in Las Vegas.

– We gotta be the only people up and moving at this point, right? This is it.

– Yeah. People with kids, people that get up early.

– Yes.

– And insomniacs.

– And people with interviews at 9:00 a.m. Thanks for booking this at nine, by the way, in Las Vegas. That was thoughtful. Really appreciate that, bro.

– You have a busy schedule, man. You told me-

– No, you’re right, you’re right. I signed up for this.

– There’s three people at my booth, you said. And earlier would be better, so I said, “Well, let’s just crack at it in the morning.”

– I said this was perfect, and I can’t thank you enough for having me.

– We got coffee. We got cigars. We’re smoking the Prestige.

– Timeless Prestige.

– Timeless Prestige. This is great, in this format, is this really popular format?

– Well, in the six by 38, I would think this would just rule the world, as it turns out, nobody wants this format at all, except for you, me and like seven other people. So as we bring back Timeless Prestige, unfortunately we’re not leading with the six by 38 Especiales, but in 2022, we are gonna bring this back.

– Great. Well, the 2% sales will go to

– [All] Us.

– Exactly. That’s it.

– There’s so much to talk about with you and what’s going on and you have so many years of experience. Just for my consumers and the people watching this show that may not be listening to the KMA interviews that you do and all the other ones. What I love about your journey the most, is that you started out as a consumer at 19, moved into working retail, moved into managing a retail store, moved into being a basically, what would you say? The VP of Nat Sherman? So that role is very much all encompassing on the manufacturer side. So consumer, retail, manufacturing. Who else in this industry has that breadth, of lineage?

– I don’t know.

– [Rob] Not a lot.

– And that’s a poor answer, but what I’ve appreciated about my own journey is I come from a small town. I come from a family of hardworking folks.

– What small town, where?

– Northeast Connecticut. It’s called Danielson, Connecticut, very small town. But I was brought up with this idea that you’re not entitled to something. You have to work for it. And you work hard. I was so excited to get a job at 15 and 10 months, because that’s when you could get your first job.

– 15 and 10 months?

– 15 and 10 months. You could do Driver’s Ed and you could get your first job. And for me, that was, I just couldn’t wait to work.

– What made you wanna work? What about school?

– Oh, I went to school.

– Yeah. But like school didn’t excite you. You wanted to get out and do stuff.

– No, school excited me, music excited me. But I wanted a job. I wanted to transact. All my jobs were always retail, customer-facing. I worked in a pharmacy. I worked in a donut shop. There’s something about that engagement. The fundamental, basic piece of taking someone’s money and putting it in a cash register and giving them some change and saying, “Thank you.” That basic kind of thing is great.

– I gotta ask, right there, when you did that, did you do it perfectly? You gave them exact change back, always?

– I gave them everything they were entitled to or more. I would round up to them.

– You know what I did?

– [Michael] You stuck it in your pocket?

– I rounded up.

– And you put it in your tip jar?

– No, I rounded up, I was just like, “I’m not gonna grab four pennies. I’m just gonna give you a nickel and a dime.” By the end of the day, my till was short $4 and 13 cents. My manager had to sit down and talk to me and she goes, “What is going on?” And I go, “Oh, I just was rounding up. I thought it was more efficient.” She goes, “Yeah, no, we’re a publicly traded company. We gotta count for every dollar.”

– No, I was to the penny. The only thing I would do though is try and upsell. If I knew it was gonna be like $8.01, I’d be like, “Why don’t you throw a munchkin in the deal? It’s like another 60 cents.” And then I’d round them up, I’d upsell.

– And you won’t be jingling with all this change in your pocket.

Getting a job at a tobacco shop to pay for a cigar hobby

– Exactly. But I’d upsell. But back to your question, my journey, in hindsight, looking back, what I appreciate about my experience is the fact that I’ve been able to do every job. There was no visions of grandeur walking in. I didn’t say, “I wanna own a cigar company,” when I was 19. I started in the business as a passionate hobbyist that couldn’t afford the hobby, as a music student.

– [Rob] No one can, when they first start, in my opinion.

– So, I had to get a job. And so I got the job, in cigars because I figured that was the best way to do my hobby and not have to pay, because I couldn’t afford it. And over the years, as my jobs have changed, those opportunities have evolved. In my head, I’m still a passionate hobbyist. I’m just 41 now instead of 19. And so, my excitement for just having a job has evolved a little bit too. Now I need to make sure I pay for my house and do all the extras. But it comes from the same place. And when I look back now, over 22 years in the industry, the fact that I spent six years in the same job. No promotion, no extra button or a badge. I did retail sales for six years. No promotion. You know what I mean? I just did the job.

– There is no promotion, unless you wanna manage the store, in my opinion.

– Right. And that role wasn’t open. Because my boss had it. And so that meant that’s it, that’s the job. And I think for a lot of young people today, there is this need for constant badges and trophies.

– That’s a good point. The need to try to climb that corporate ladder or whatever ladder system, for promotions or increases in pay for millennials, they have a short attention span. For that.

– But the fact is that’s not the way the world works. At least not the world that I grew up in. And so if I show up to work, in the same job today that I had yesterday and I get a check, you don’t owe me anything else. You know what I mean?

– [Michael] That’s the contract.

– Right.

– That’s it. And it’s my job, to exceed your expectations in a way that you look at me and say, “I need this guy to stay,”

– That’s key.

– “And this guy’s gonna grow.” And that also means that I was fortunate enough to have managers with balanced egos where they weren’t afraid to promote me. Right? And to get behind me.

– Yeah. That can happen.

Succeeding at work is doing more than your job

– Because I wasn’t out to eat their lunch. I wasn’t out for their job. I just wanna do my job and I wanna get paid for it and I wanna deliver, and I wanna exceed your expectations. That’s what I want to do.

– Exceeding.

– Six years, in the same gig.

– Yeah. Exceeding the expectations to me is the most important part because, Drew Emmer one of the guys that works for us, he said it really well, “I always want Boveda to get more out of me, than what they pay me for.” I want you, as the employer to get more than what you pay me for, always.

– Always.

– Because if it’s the opposite, you might be on the chopping block.

– When I got to Nat Sherman, our first store director that I hired was a very good friend of mine that used to run a steakhouse called Rothmann’s, his name is Pat Felitti. And we were right around performance review time, and there were a couple of people who were very disappointed because they had met expectations. And that’s where they lived, meets expectations. Which is not a bad review, Right?

– No.

– You meet expectations,

– [Rob] That’s great.

– You’re doing your job. And one of the employees, this is like 2011. One of the employees was like, “Yeah but, yeah but, I did this, I did this, I did this, I did this.” And Pat goes, “Congratulations, you don’t get extra credit for doing your job. You want extra credit? You have to do extra.” And that stuck with me forever, after I heard him say those words, “You don’t get extra credit for doing your job.” That’s right. And I apply that to this. So, I work really hard to create a blend that’s unique, that smokes great, that burns great, that tastes great, that’s the same every year. And that is meeting expectations. You know what I mean? I don’t get extra credit for making great cigars every year. That’s not enough. The only way we get extra credit is to do more and exceed expectations. It’s a hard thing to do in this business, man.

– So, that resonates with me because the typical marketing jargon is quality and consistency. If you’re not doing quality and consistency for your cigar brand, in this market, probably shouldn’t be in it. Because that’s, doing your job.

– You can’t be in it.

– Yeah, right?

– And you won’t be, by the way.

– Right, no. Yeah.

– Even if you think you should be, the general voting population with their wallets and pocketbooks, will make sure that you are no longer in the business.

– Exactly. It’s a foundation to what you need to do, but it is not, like you said, extra credit.

– Right. And then, so how do you earn the extra credit? That’s the hard part, in this business.

– Well, answer your own question because you of all people, would be in the best seat to answer that. How would you earn extra credit with the consumer? Is it the band? Is it the artwork?

– That’s the extra. So if everyone’s making good cigars, and they are. I mean, let’s face it, there are great cigars in every booth on this floor there are great cigars.

– Let me tell you, too, great cigars, with bad bands. You know what I mean?

– Could be bad bands, could be good.

– [Rob] Artistically, you know what I mean?

– I’m not gonna talk about good or bad.

– But there is.

Staying true to who you are in the cigar business

– There are great cigars in every booth on the show. So, how do you exceed expectations? I think gets into what that brand proposition is. For me, and I think I applied this as I worked for Nat Sherman for 10 years, and I’m certainly applying it now, with Ferio Tego. I really believe in honesty, in clarity and authenticity. That is our driving force. As much as I love the romance and fanfare of stories from a marketing perspective. For us, that gets a little thick. And what we are doing now, especially as Ferio Tego, but we did it to a large degree at Nat Sherman International too, is leading with gratitude, first. Honesty, transparency, and humility. A little bit of grace, a little bit of elegance. And what you see is what you get, with us. There’s no secrets, we’re open, we’re truthful, we’re honest, we’re hardworking. And we are, hopefully, dependable. And we’re gonna continue to do the same thing we did last year, the same thing we did five years ago you’re gonna get next year and the year after that. Because, when you are completely honest, transparent, and authentic, it’s awfully easy to be consistent. When you start putting the layers of paint and trying to craft new messaging, and then you have to stay on your talking points and you have to remember what you’re supposed to say, it’s a lot of work. And I’m not willing to do it. You know what I mean? I would much rather just be honest, keep people up to date, allow the product to speak for itself, give credit where credit’s due. I didn’t roll this. I helped create it, but the Quesada family makes this, this is their tobacco, they roll it. I’m not Don Miguel Herklots, I’m Michael Herklots. I’m a gringo that lives in New Jersey. You know what I mean? I don’t wear guayaberas. That’s ridiculous. I don’t wear a Panama hat. I don’t stand in the middle of a field and smell green leaves. None of that is authentic to me. What’s authentic to me is the relationships I’ve built over 22 years and developing product that I believe is great, and then relying on the people that know it best to continue to produce it and get behind me, and we deliver that to market and people continue to buy it. That’s as authentic and honest and transparent as I can get.

– With a retailer, that honesty part, is key. But where do you feel like sometimes companies might slip up in honesty with the retailer, that hurts the retailer the most? Or the consumer? You can translate that either way. Like a brand that really wasn’t completely honest about something. And then ultimately the end consumer has to pay for it.

– I don’t wanna answer that in any way that would be disparaging to another company. But, one thing that I think is so unique about our business, there are lots of similarities and adjacencies to the wine world. But, in the wine world, there are governing bodies of the industry that require a certain level of transparency. You have to disclose your alcohol content. You have to disclose some level of blend. If you wanna call yourself a particular wine, right? You have to be X percent Sangiovese, or it has to be X percent Cabernet to be X.

– Basically the terroir, where it’s from, right?

So you think you know about cigars?

– There are qualifying criteria for you to claim that what you say is what it is. Well, we don’t have that. For a fact, there is a lot of marketing license that is allowed to be taken, when you are talking about product. Whether you’re talking about seed, or you’re talking about blend. And the reality is that it’s our job to keep the blend the same every year, despite the fact that the ingredients change, right? Right? So what we say it was when we launched is probably very different than what it is eight years later. Because you have to adapt to keep the experience the same, the blend changes, but we don’t update that. We tend to say that it’s the same from a marketing ingredients standpoint. And so that starts bending truth, which is totally cool. But the problem is, as consumers have really embraced the idea of connoisseurship, and trying to learn and memorize the facts, and then equate that to experience. The reality is, that in some cases, consumers are learning false information. Because what they’re applying as fact, that a drying effect on the palate, or a dark ash equals this particular tobacco or magnesium in the soil or all these things. The reality is, that those facts have changed over time, but you’ve memorized and memorialized in your brain that that little factoid applies to this little tidbit of information. And so, you learn wrong information. And now the problem is you share wrong information because it only takes about six months to be an expert. You know what I mean? That’s really all you need. You need three or four reviews. You need to smoke a handful of cigars, and you need a small population of followers before you become the provider of information. And so, now that information starts being shared based on wrong facts. And before you know it, this very educated population is educated with the wrong information. That’s problematic. So, going back to your question, the need for transparency and honesty, I’m not disparaging anyone who takes a different strategy, but for us, we need as much open transparency, not just so people understand our product, but so that we are educating a consumer base with real information. If our consumers are really educated with the right information and the right set of facts, and our retail partners are educated with the right set of facts, that’s a much healthier environment for us to win in.

Learning how to blend cigars

– Right. Blending to me, is a hard aspect to get around. You have many years of experience. Do you remember the first day you went to try to figure out how to do blending? Were you nervous?

– When I was 24, I started going down to the Dominican Republic. The general manager of Davidoff at the time, guy David Kitchens, great mentor of mine. He used to go down every year on vacation and spend time with the Quesada family. And one day he’s like, “Come on this trip, just come take five days off, come with me.” I had no money. He’s like, “Don’t worry about it. I’ll help you out. Just cover your flights. I’ll pay for your hotel.” And he was really generous.

– So it was a personal trip, not a work trip?

– No, no, it was a vacation. And I went down and I spent time with the Quesadas and we just hung out in the factory. And that was my vacation. It was just hanging out. Smoking cigars.

– Were married at the time?

– No. 24. I was 24, I was a kid, man. I was single and it just sounded like a great idea. And I was grateful for the opportunity. And that really turned into this, what has now become a very special relationship with the Quesadas and they are my family. I give that as context because what they would do when we would go down there is just simple things like, “Hey, taste this, taste this. Oh, we’re working on this, we’re playing with this, taste this.” I’ve always been driven to figure out the why, in everything. So I would taste something and ask, “Well, why is it spicy? Why is it strong? Why does this suck?”

– I like your style.

– I don’t like this. Why does this suck? That push to get to the why, really allowed me to learn this kind of cause and effect piece.

– My brain works the same way. I have to know why, so I can be more educated on what to do with that. It’s not necessarily,

– So I don’t repeat a mistake.

– I’m questioning, are you sure? It’s okay, but why? And then, okay, great. So now I know, and I can adjust when that happens.

– It was not a deliberate, today is July 12th and I’m gonna start blending today and let’s figure out how this works.

– Just happened organically.

– It was incredibly organic. It was really because the Quesadas were so generous and open about just allowing me to learn on their time with their tobacco, with their people. And so, as time went on, one of the things that really stands out when the Quesadas were going to do the Quesada 35th.

– I heard this story.

– So it was like 2008, nine something.

– They kept it a secret from Manuel.

– Yes. But they called me. I’ll never forget. I was in New York, at my desk, Davidoff Madison Avenue, phone rings, it’s Raquel and Patricia. And they say, it was like a Tuesday, and they were like, “You need to come to Santiago on Friday.” And I was like, “Oh my God, Manolo’s sick. what happened?”

– Oh.

– And they’re like, “No, no, no, everyone’s fine. Everything’s fine. But we need you to come down this weekend.” And I was close with the girls and the young ones, as Manolo calls them. And I was like, “Okay.” And they’re like, “But don’t tell our dad.” And I’m like, “What is going on here? This is not good.” So I show up, they pick me up in the airport and I’ve been going down for five years, six years at this point, they’ve never picked me up at the airport. They pick me up at the airport. I get in the car, no one’s saying anything. I’m like, “What the hell is going on? What am I doing here? What’s going on?” We show up, now where the factory is today, was a tobacco warehouse and processing facility, we show up there. I get out of the car. The whole crew of young ones is there. I sit down and was like, “Would someone, please tell me, why am I here? And what’s going on?” And they said, “Okay, we wanna do a cigar. We wanna do it under the Quesada name. We wanna make it different. You need to help. What do we do?” And they had all these bales open. There were like three employees that were there that were moving bales over for us to taste. And I was like, “Holy, okay. Let’s start.” And we smoked crazy tobaccos. And we actually said, “Okay, what we have to do first is make sure that this does not taste like a typical Fonseca, S.A.G. product.” So, we started with unfermented tobacco. Let’s start with this. This just came in out of the field. So let’s smoke this and taste it raw and figure out if that doesn’t taste like what the cigars typically taste like out of this factory, then that’s where we’re gonna start. I think three of us threw up almost immediately.

Why you don’t use unfermented tobacco in a cigar

– [Rob] Oh my God!

– Because it was high ammonia, high nicotine. It was a terrible idea. But it allowed us to taste something in the building that didn’t taste like everything else had tasted. That was probably the best learning experience, was working on that product because we figured it out together, the whys. We lit up that tobacco. Why don’t we use unfermented tobacco? I know, it makes you vomit, right? But we got to experience the why. We had real discovery. But then we also realized that there was some unique flavor in some of that young tobacco. So, we started playing with it, just a little piece, a quarter of a leaf, in the middle to change the profile in a really dynamic way that when you add all these other brilliant tobaccos and that one little piece that is so different, it takes the experience of this cigar and completely made it new and different, when you compare it through the lens of everything that had come out of that factory before. So, learning those whys, hands-on, on a Saturday afternoon, throwing up, was the greatest blending tutorial of my life.

– [Rob] I love it.

– Then we were on a roll. Then we also had Manolo’s blessing and buy-in after he was a little angry. After we presented. It wasn’t my job, but I still got to participate with the Quesadas. When I did join Nat Sherman, and it was time to really resurrect what had been a highly respected, but nostalgic brand, when it was time to take this to a new direction, because of the Quesada’s generosity and allowing me to play and allowing me to participate, first of all, they were the first ones I went to. And in fact, this is the first blend we did.

– [Rob] Really?

– Was the Prestige, this blend.

– Phenomenal.

– It was number 10 cigar the year, Cigar Aficionado, the year we released it. Incredible man.

– And that 35th anniversary.

– Was dynamite.

– Yeah. It was dynamite. You also said something very interesting, which I wanna clarify is, they said they wanted to put their name on it. At this time, they did not have Quesada on a cigar name.

– [Michael] Ever.

– So, not only are you keeping the secret from Manuel, you’re putting the Quesada name on a cigar that he’s not advising, and you’re trying to create a brand new blend, like you said, that doesn’t taste like anything else in their lineup.

– Yup.

– That’s three major hitters that you gotta hit out of the park.

– So that was ’08, maybe. I was 28. I had never been in that country without Manolo’s blessing. We put all this together. On Saturday and Sunday. Manolo has no idea I’m there. And we decide Monday, we are gonna present. Because I said, “There’s no way we’re just gonna pitch this idea. We have to present.” So, we put together a PowerPoint to present this idea to Manolo. And I was leaving Monday afternoon. So we get to the factory early, before Manolo, which is early, because Manolo gets to the factory early. And I’m sitting in this conference room, having a coffee, completely shaking in my boots, what is gonna happen when he walks in? Manolo walks into the factory, and I can hear his voice, which is this booming, thunderous, incredible voice. And he walks by the conference room and he goes, “Hello.” And then he walks back and he goes, “What the hell are you doing here?” And I was like, “Manolo, don’t be mad. Hold on a second. We got a little thing.” Turns around, Raquel and Patsy are there they’re like, “Papi, hold on.” He just goes into his office, closes the door. So I’m like, “Okay, this is where we’re starting.” So, I went into his office and I was like, “Manolo, we wanna present you with something.” And he’s like, in his classic Manolo, shaking his leg, looking at me, he’s like, “Okay, 10 o’clock.” And it was like seven. I was like, “Do you have time now?” He’s like, “10 o’clock.” All right, 10 o’clock. We suffered in this conference room for like two hours, until 10 o’clock. He came in and we presented the whole thing, and why we did it and apologizing for showing up. And we have these blends. And we want you to taste them. And we wanna do this different. And it has to be Quesada, the whole thing. And he goes, “Okay, thank you very much.” And he stood up and he left the room.

– He didn’t give you an affirmation, a blessing?

– That was it.

– Nothing?

– Nothing. And I’m like, “Well, now what?” And now I gotta go to the airport. I haven’t even got a hug from this guy. You know what I mean? I finally, I went into his office and I’m like, “Manolo, we have to leave. And I’m sorry.” And he’s like, “Son, I’m proud of you, but don’t ever do this again.” And I was like, “Got it. I’m gonna go to the airport.” And he was like, “Okay, bye.” And that was it. But man, what that did, I think it affirmed to Manolo that his time and his hard love over all those years, forcing people to learn the hard way, it paid off. And we did deliver, and we exceeded his expectations. And so much so that he made a blend, after we pitched the idea, he decided to make a blend. We did a tasting at Davidoff in New York, with Gordon Mott and Dave Savona.

– [Rob] Oh.

– Blind tasting of our blend and Manolo’s blend for 35th. Blind tasting. And we sat upstairs in this beautiful little lounge that we had in the Davidoff store. And Manolo said, “One of these blends, is the young one’s. And one of these blends is us, the old ones,” meaning him, “And I want your opinion.” Before we launched something, he wanted Savona and Gordon Mott’s opinion on these blends. We did a blind tasting and we won. And he said, “Son of a bitch.” Great. And that’s the blend we went with and it was incredible.

– That’s great.

– Incredible.

– People still talk about that blend today.

– I think I have five left.

– Wow.

– Five sticks. For me, I look at that as, it’s like looking at a yearbook. You know what I mean? Every time I look at it, I’m transported back to that moment in time, where now in hindsight, I was 28. You know what I mean? Raquel was probably 30. We were kids. We had no business doing that.

– And I just wanna clarify, Manuel is his proper name, and you guys call him, as family members, Manolo. That’s like his nickname, right?

– So, Manolo, this is the way Manolo says it, which I can hear him saying it, Manolo, and then Manolito, these are diminutives of a proper name. So Michael, Mike, Mikey.

– [Rob] Right.

– Manuel, Manolo, Manolito, is the same thing.

– [Rob] Got it.

– Manolo is the diminutive, familiar version of Manuel.

– Got it. Like Robert for me, people call me Rob.

– And then Rob and then Bobby or Robbie, right? Depends how familiar you get. Manolo is a very familiar way of saying Manuel’s name.

– Yeah. Because my cousins call me Robbie.

– And you wanna punch them in the throat every, no I’m just kidding.

– No, I love it. Like you said, it’s that closeness. It’s that endearment of you knew me, when I was crapping my pants and running around trying to keep up with everyone.

– It’s funny, man. When someone calls me, Mike, and I don’t care what you call me, no problem. But, when someone calls me Mike, for me, that’s like, this is someone from high school. For sure. Because I was always Mike. If someone calls me Herk, Herk was college.

– Oh!

– So when someone calls me Herk, I’m like, “Dude, who’s here from Boston?” You know what I mean?

– [Rob] Yeah.

– And also Herk, for some reason the Ashton crew, they all call me Herk. And there’s like a handful of other people that call me Herk. But Herk is so specific. If someone calls me Herk, that’s an inside baseball-

– You’re ready to get a shot thrown in your face. Let’s go party.

– Totally. And if someone calls me Mikey, that was my first year at Davidoff, people called me Mikey. If someone calls me Mikey…

– Like who’s from Davidoff?

– Right. That’s a very specific moment in time.

– That’s so interesting. In high school and grade school. So, we’re just transitioning into high school, but I went to two different grade schools, both private Catholic schools. At one, I was Robbie Gagner, which is not the French way to say my last name. It’s Gagner. So, I corrected that when I went to the new school in seventh and eighth grade. I was Rob Gagner. This was part of my growing out of my adolescence. So it’s, Robbie Gagner, Rob Gagner. We go to high school, the two schools now meet, right? They’re both Catholic schools. We’re going to a Catholic high school. And somebody says, “Oh, do you know Robbie Gagner?” And they go, “No, but I know Rob Gagner.” It’s the same person, it’s me. And they come to eventually find out, “Oh, we were talking about

– Talking about the same cat. the same person,” it was me. I just found that very interesting that you try to graduate your name to a more refined and mature person.

– Well, I will tell you, what that example highlights for me is what I experienced when I went to college. You get very few moments in life where you can reset.

– Right.

– Where you show up to a completely new audience, and in that moment, you can be anything you wanna be. When I grew up, I was always into theater and music and acting. But I was a pretty shy guy.

– Really?

– Yeah. I was okay getting on a stage. No problem. I could jump on a stage and

– Playing the drums.

– perform, whatever. Acting, singing. No problem. Three people are having a conversation on the other side of the room, there is absolutely no way I’m walking over and introducing myself. None. I will stay by myself.

– I would totally think somebody who enjoys sales, would not be that way.

– But it’s different, when you’re sales you’re on stage. Right? I’m in character. When I’m behind a register-

– See, I’m not, it’s just me. I wanna have that conversation with those three people over there, because I find it interesting and I’ll go seek it.

– I couldn’t do it.

– [Rob] See?

– Unless I was in costume and character. So, if that’s part of my job, I can do it no problem at all. But if I’m off the clock, just me, as an eighth grader and those are four people having a conversation, I don’t know them, there’s no way I’m going in. But, I didn’t wanna be that way. And I knew that I could jump on a stage without paralyzing stage fright. I knew I could jump into character and perform and do all those things. It was something about that, that I just had a problem with. When I got to college… So I grew up in a small town, and I was a big fish in a small pond, musically. I was the drummer. I got all the gigs, we performed a lot. It was great. I remember getting to college, and I was also in a small town where my father grew up, and my grandfather grew up, so if I said, “Herklots,” people would say, “Oh, your dad’s Doctor Herklots. Your grandfather was at the college, he owned the newspaper, right?” All this. When I got to college, I remember, I was in line for registration and they were like, “Name?” And I said, “Herklots.” And they said, “Could you spell that?” And I realized, it was probably one of the first times someone asked me to spell my name. And it was a light bulb.

– [Rob] Oh, wow. Because I was like, “No one knows me, this is totally new. If I started speaking in a British accent right now, no one would have any reason to think that I’m not from England.” Do you know what I mean?

– [Rob] Right.

– That was a moment for me, where I was like, “Okay, shy is over. I get to start fresh, no bias, no preconceived ideas. So, Michael Herklots, at Berklee, is going to be a very different person than Mike Herklots, from Killingly. I know I can do it. I’m gonna do it.” And I became way more outgoing, way more engaging, way more social.

– Perfect timing.

– Perfect timing, you get that reset. Just like you.

– [Rob] Yes.

– One quick change in pronunciation of your last name allowed you to take on something different, right? Evolve a little. Polish a little.

– Right.

– And continue on. You’re not different, but you’re just kind of fine tuning and tweaking as you go. I think that it’s such a unique opportunity for folks that a lot of people don’t take the opportunity to see when there is the opportunity for a reset.

– You gotta see it.

– And a restart. You have to see it. And for me, I was Boston Michael, Berklee Michael, was very different than New York Michael. When I moved to New York and started working Davidoff, that was another one of those resets. That was nine years of my life at Davidoff. When I joined Nat Sherman, that was another moment. It was that, “Okay, Nat Sherman Michael Herklots, will be different than Davidoff Michael Herklots.” So, you tweak and you polish and you figure out, right? What’s the next chapter?

– [Rob] I love it.

– And now here we are, Ferio Tego Michael Herklots. I’m completely out of ideas. So what you see is what you get. But I think those are really important moments.

– It’s still too new, we don’t know what we’re gonna get.

– [Michael] That’s right. And we’re still evolving. Let’s face it.

– Yeah, you’re selling a ton here at the show.

– Bro, let me tell you, we are the only booth at this show with nothing to sell, no prices, no product, no samples. I have nothing but hugs, stories, and you know…

– So you go to a trade show with no inventory.

– [Michael] Yup.

– No price sheet.

– [Michael] None.

– Just to set the record straight for everyone out there, that’s probably the number one thing people walk around and ask for, “Can I get your price list?” I don’t have one.

– And a sample.

– Do they just look at you like, “Did you show up to the show?”

– Well, let’s be clear. This was not plan A.

– [Rob] No.

– Right? I was not thinking four months ago, “I got this great idea, trade show, we’re gonna show up with nothing.” That was not plan A. But, while I’m sure while everyone can appreciate the fact that production requires a certain amount of agility and flexibility. Particularly, at the tail-end of a pandemic. It is what it is.

– Yeah.

– However, this organization was not as flexible. So when I said, “You know what? We’re about 45 days late. Do you think we could push this trade show to September 15th?”

– Just for you?

– Yeah, they said, “No.” They were unwilling to do it. So, what do we do?

– He’s a legend, but he’s not that big of a legend.

– So what are we gonna do? What was important to Ferio Tego, to us, was that we have to be here. This is the first opportunity to be with our peers, in almost two years, we have to be here. And so if that means that we have to be here differently, that’s what we have to do.

– I commend you for taking it. Because you gotta do it.

– We had spent the money, we had invested in our membership, it was one of the first things we did once we formed the company, was we joined PCA. Immediately. And then we made sure that we had our deposit for our booth. Immediately. We had no plan. But we still made sure that we were set up with this association.

– Whether you got product or not. You’re going to the show.

– We’re going to the show.

– Because this show, really is the bread and butter and the lifeline of this industry, in my opinion. And maybe you don’t agree. But when I came here, my first time, I was like a kid in a candy store. Walking around, looking at the amazement of the booths. My jaw was practically open the whole time. And somebody came around the corner and saw the expression on my face and said, “Are you new here?”

– First day?

– Yeah. And I think it was Liana Fuente. And I’m like, “Yes, I am.”

– I can remember that feeling. My first show, which was Nashville, I think 2003, was my first show. And it was absolutely the same. My experience has changed. I don’t come in jaw-dropping. But, my perspective has changed. And so now I look at the show floor as a representation of our industry. And think to myself, “Wow, this is still a very special, intimate, unique industry, when you look at this floor.” But going back to your point, so yes, this show, is the show. There are lots of shows. And they’re all important and they’re all meaningful and they’re all different. But this is it.

– This is.

– But the reason this show is the show, is because this association, is THE association. I think this is the work that PCA is doing right now. Because it’s no secret that over the last two or three years, PCA has had some ebbs and flows of identity of support. But, let’s not forget. The Premium Cigar Association, is the association, trade association for the premium cigar industry, full stop. And so what that means is, the PCA is not a seven-day event. The PCA,

– Feels like it.

– is a 365 day a year association. And because they are the leading association of our industry, that’s why this show, is the show. So, there’s obviously work to do as an association. There’s work to do as an industry. There are a lot of differing opinions on how to make this all better and more meaningful. But, when you look at this show, this shows you that we are way closer aligned than we are apart. That’s a fact, as an industry. There’s obviously still work to do, but that’s why we’re here. With no samples and with nothing to sell and with no prices, because this is the association of this industry and we have to be here, and we have to participate.

– So for you, it’s just, hugging, shaking, kissing babies.

– And asking for patience, understanding and support. And we’re getting it. It’s been outrageous, man.

– You’ve earned it.

– Well, we’re trying to earn it. We haven’t earned it as Ferio Tego. There’s no credit due. We just started over, right? It is what it is.

– No extra credit given, until you do the work.

– So I’m proud of my time with Nat Sherman. I’m proud of my time with Davidoff. I’m proud of my contribution, I hope, that was meaningful for the last 20 years in this industry. But standing in that booth for the last three days, as Ferio Tego, I don’t get extra credit, for 20 years in the business. I’m sorry I don’t have prices. I’m sorry I don’t have product yet. But all I can do is shake hands and ask for support. And we’re getting it. And I’m grateful for it.

– I would be, as well, grateful for the support of retailers. Because that retail line, is the most important part of your business. And you’ve had so much experience with that, with Davidoff and Nat Sherman, and building a sales team from scratch. And then having to have a portfolio that can support a shop with the proper amount of SKUs that bring people in for new stuff, but also bring people in for the regular stuff. The stuff that I think you said it so well, that they rely on. That they wanna smoke every day, or wanna smoke on a regular basis. And you also said, after the pandemic of COVID that that’s what’s gonna be the primary driver to get the consumer back into the retail shop. Here’s what we have. Let’s not focus on releasing a bunch of new stuff. And I know that was all with Nat Sherman, but do you still believe that’s what’s bringing people back into the shop? What does the shop have, that I normally always smoke? And let me get back to socializing with my friends.

What are meme cigars?

– There is a cultural, common theme. We have meme stocks now, right?

– Meme stocks?

– Meme stocks. These stocks that get shot up, people make a ton of money on them.

– [Rob] Oh, sure.

– But they’re not based on fundamental cores. The people analyze the stocks and we have no idea why they’re rocketing, but they are. And we also know they’re gonna crash. But great, you can make money.

– At some point. But you’re hoping you’re gonna catch it.

– There are meme coins, within the crypto world. They show up out of nowhere. There’s no use case. It’s a meme coin and people can jump on, ride it, and then they go away and you have to find the next one. I think there’s a culture of meme cigars. And that’s not a criticism, because I think meme cigars, I call them meme cigars. I think they’re great. These little one-off, in and out, this constant rhythm and cadence of new release. Crazy cool.

– Small, limited.

– I think it’s an unbelievable unbelievable model. I think it’s great. But that’s not our model. Our model is, once that cigar of the month sells out, you know you can come back to us. We’re core. So, if you look at Metropolitan, for example, our Metropolitan Connecticut has been made consistently, since 1995. The same with our Host, Metropolitan Host, 1994.

– Isn’t that having an anniversary, the Metropolitan brand is?

– It is, I’m not sure we’re gonna be organized enough to celebrate it, but it is.

– Well, how many years has it been in-

– It was 1994, 1995. We’re actually now approaching 40? 1994. 2024. We are going to approach a pretty big anniversary.

– [Rob] Wow.

– Timeless is celebrating 10 years next year. But we need things that we can depend on and rely on in our lives. You go to your doctor, because that’s your doctor. You go to your dentist, because that’s your dentist. You don’t change dentists every time you need a cleaning. You don’t change doctors every time you don’t feel well, because you have a relationship that you trust. That’s a philosophy that we’ve believed in, that probably predated me at Nat Sherman, but I shared. It’s one that I embraced throughout 10 years of Nat Sherman. And it’s one that we were absolutely going to embrace at Ferio Tego. This is not cigar the month. We have brands, and this is what’s so interesting about Ferio Tego, is because we were able to acquire these brands, we were able to carry on the legacy. It’s a legacy of consistency. And it’s a legacy of dependability. That’s an awesome responsibility to carry on. So, moving forward, we are going to continue to do the work we’ve done. Creating a blend, is not an easy thing to do. Maintaining that experience for 25 years is infinitely more difficult because the materials are changing, and yet the experience, every time you light it, has to be the same. But that’s something that we have been able to do, now, since let’s say 1994, it’s something I’ve participated in since 2011 with Nat Sherman. And that’s because we have great partners: Quesada, Plasencia, and Davidoff. They do the hard work. We get to work closely with them to make sure that we’re all on the same page. And together, we’re fully aligned on what’s most important. Which is quality and consistency and behavior of blend and experience. And we’re gonna do that. Again, for another 10 years and more. We’re fully committed to that.

“Give that man a Nat Sherman cigar!”

– You talk about that legacy, and Tim, one of the owners of Boveda, had told me, the Nat Sherman brands, when a baseball player would hit a home run.

– When a football player would score a touchdown.

– When a football player, would score a touchdown.

– [Michael] When the Giants scored a touchdown.

– When the Giants?

– [Michael] Yup.

– Would score touchdown, they would say, “Buy that guy a Nat Sherman cigar.”

– Guy’s name was Bob Papa, predated me. Bob Papa on, I wanna say it was CBS Radio. I think it was CBS Radio. He’s still on the air. Anytime someone scored a touchdown when Bob Papa was the commentator for a game, every touchdown, “Give that man a Nat Sherman cigar.” I had no idea because I’m a musician, I don’t watch sports, I don’t know what a touchdown is.

– I don’t know what a touchdown is.

– I can’t tell you how many times when I would introduce myself and say I worked for Nat Sherman, people would just say, “Give that man a Nat Sherman cigar!” It was ingrained in culture,

– [Rob] Really?

– particularly in the Northeast, yeah.

– That is so cool. It’s part of pop culture.

– Yeah. It was incredible.

– What a weird feeling.

– Crazy. And also really amazing point of pride.

– Exactly. Wow. You can’t pay for that. It’s unbelievable. It’s amazing.

– I think the stuff that is the most valuable is the stuff you don’t pay for.

– Exactly.

– You can spend all kinds of money on all kinds of great things. None of them are worth more than the things that you just earn.

– Well said.

– It’s a special part, I think of our culture, Nat Sherman’s culture. And it’s gonna be a part of Ferio Tego’s culture. We’re not gonna take anything for granted. We’re gonna earn all of it. We’re gonna work harder than anybody because we have to.

– Right. Like you said, you can’t rest.

– You can’t.

– Take it to the next level. What is the next level for you? Do you feel like you know it? Or is it just gonna be something that organically happens and you know, you’re gonna push for always the best.

– Man, if we have learned anything, in the last 24 months, it’s that whatever you think is gonna happen is not gonna happen. So, all you can do is be as prepared as possible for the fact that anything can happen. And let’s face it. You can be as prepared as you wanted to be in 2019, gearing up for 2020, and as prepared as you are, or were, you could not have seen a global pandemic that would shut down the world and kill hundreds of millions of people. And what I’ve taken away from that is you need to work really hard. You need to be really prepared. You need to think outside of the box. But you also need to understand that there are things in this world that are just beyond your control. You have to concede that things are gonna happen. And it’s how you respond and react to those things that allow you to win. We had a great business with Nat Sherman International two years ago. We went out of business. Not because our product was bad or because sales were down. It was things that were beyond our control that forced us to close. Our response, today, is we have a company called Ferio Tego, but if you asked me in 2019, what my plans were, I can tell you for sure, it was not, between you and me, I’m thinking I’m gonna start my own cigar company. I’m gonna call it Ferio Tego. I’m gonna buy these brands. It wasn’t in the cards. It wasn’t in my mind. It wasn’t a goal. But, you have to deal with the facts of the day. You have to get above the chaos and look at your options. And then you have to make the best decision with the information you have and go forward. So, all I can tell you is two years from now, we’re gonna be at a better place than we are today. I can definitely tell you, two years from now, I am gonna have sell sheets and price lists and products at a trade show. That’s for sure.

– There you go.

– But beyond that, I don’t know.

– I have to say, though, when I first heard that Nat Sherman wasn’t gonna get sold, and all the hard work you put into that, wasn’t gonna come to fruition, I immediately thought, and Tim even said it too, why doesn’t Michael, buy the names and start his own company or continue on the legacy. That thought popped into my head right away. For you, when did it pop into your head?

– So I think it’s important, we had very specific criteria for the transaction. Altria was very clear. This was not a money-making proposition. They weren’t looking to sell this company and profit. There were a lot of things that forced the decision to exit the premium cigar business or retail business. But they did it, I think, regretfully, because they didn’t want it to go that way and with reverence for the legacy. And so, the criteria of the transaction to sell Nat Sherman International was a mutually beneficial transaction, number one. But the best outcome for the people in the company, two. And number three, to find a buyer that would carry on the work and embrace the legacy of the brand. COVID made that transaction impossible. But what was never contemplated was just selling the brands. That wasn’t the deal. The deal was to find the right fit for the right buyer to carry on the legacy. So, when we announced that we didn’t sell, we also announced that we did not sell the brands. That was it, everything’s over, and this goes in the history books. But it was following that, because now we had to do the work of winding down and shutting down, which was incredibly emotional because we were winding down a healthy business. We were discontinuing healthy brands. That was a real emotional drain. And my partner Brendon, who was the former CFO of Nat Sherman, we were working together almost every day. Masked up, in an office, in a pandemic, winding down every night saying, “This sucks, this just sucks.” And there came a point where we were just spit balling ideas and figuring out what we’re gonna do. We know we’re losing our jobs. What if we just ask? Maybe we just ask?

– Can’t hurt to ask?

– Would you consider selling the brands? I know you’re not selling the brands, but would you consider selling the brands for us to continue the work? And we approached Altria, with basically a plea. Would you consider selling the brands to us and allow us to continue this work ourselves? And it was met with a resounding, yes. Make an offer. Let’s work through this. Let’s figure out how to do it.

– And you even got the Shermans involved.

– We didn’t get the Shermans involved, in any way, other than letting them know that we were doing it. But they were not involved.

– I thought you had said, you had even asked the Shermans, “This is what we wanna do. We want to acquire the brands. Are you comfortable with that?” And they gave you a resounding, yes.

– It was fast forward. It was once we understood that we could, once we knew from Altria that we could, then we shared the news.

– [Rob] With them.

– With the Shermans and we didn’t want it to be a surprise, of course.

– Sorry, that’s what I meant. And then they were ecstatic that you were going to do that.

– From the moment we started curating the idea, to the moment we announced it, to the moment that we announced our distribution deal, there has been nothing but a steady drumbeat of support. It’s been unbelievable. There’s this real, genuine sense that people are rooting for us. It feels like a very unique thing. People say that we’re a family industry and we all help each other out, and that’s true, but there’s something about this that feels very different. About the advocacy and the enthusiasm and the way people are rooting for us to win. I don’t know where it comes from, but it’s definitely real. And it’s definitely awesome. And it’s definitely authentic. And if this enthusiasm, in any way, correlates to sales, we’re gonna have an inventory problem. And we’re gonna have to ask for continued understanding and patience, no different than we’re doing right now with no samples and no price lists. Because we may have underestimated demand. And I say that humbly. If I’m wrong, and we’ve forecasted correctly, and we’re gonna try and get back to stores and we’re gonna bang on doors and we’re gonna ask for the sale. We’re gonna work hard for this. But if this enthusiasm correlates to what is already in the market for demand, there is an awfully bright light at the end of this tunnel.

– Phew.

– It’s really exciting.

– I love how you pose that there’s a drumbeat that’s happening from the outside in to keep you going, because you play the drums.

– Because I’m a drummer.

– I love the fact that now people are playing the drums for you, to keep you going.

– Man, there was nothing more important in any great performance, than the rhythm section. You need a great bass player and a great drummer. But nothing kills their performance, than a drummer and a bass player that overplay. It’s all about making sure that the rhythm feels good. And if it feels good, you’ve got a very happy audience. But the minute a drummer starts throwing his sticks around and the bass player starts going crazy. It becomes a distraction. And then it becomes a gimmick. And then this band sucks. Right?

– True.

Why smoking Ferio Tego Cigars is like hearing your favorite song

– I think that’s a learned discipline. As a drummer, I spent a lot of time overplaying. I spent a lot of time trying to get attention. That’s not my job as a drummer. My job as a drummer, is to produce a foundation of rhythm that makes everyone feel good. And that makes the show right. When I look at my career, I spent a lot of time being young and looking for attention and doing it all wrong. It was authentic for me in the moment, but I wore crazy suits. I did everything I could do, to get attention. And that becomes a distraction. And when you are distracting, it becomes a negative. At this point, I just wanna be a disciplined drummer. I wanna keep a very steady rhythm, that people feel. I want folks to be around our brand, to be around our products, and I just want it to feel good. When you hear Sweet Caroline, that is a great song. No one talks about the drum part on that song, right? Because it just has to feel good and everyone sings it. The reason it’s great, is because the drummer and the bass player do exactly what they’re supposed to do on that song, and they make it feel good, when you get to that chorus and everyone sings it. Our job today as Ferio Tego, is to not be distracting, it’s to be your favorite song. That’s it. To have steady rhythm, that makes you feel good. Every time you select it, every time you cut it, every time you light it. And it’s as good as the last one you had and it’s as good as the first one you had. That’s our job.

– [Rob] I love it.

– And it’s gonna work. Or at least I hope it will.

– Yeah. Michael, I don’t think we could end it any better than that. What’s coming from Ferio Tego, is going to be amazing. You’re working hard for it. We appreciate you picking up the legacy that is Nat Sherman and carrying it on. Just a resounding, thank you.

– Thank you. Thanks for this platform. Thank you for doing what you do and allowing little guys like me to have a platform and talk to people and just ask for consideration. That’s all I would ask for. One shot, maybe two.

– I think it’s worth it.

– I hope it is.

– It’s definitely worth it. Thank you.

– I appreciate you, man. Ferio Tego.