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Story of the Trinidad Family and the wholesale cigars Cuban Tobacco Industry

This story was written by Diego Trinidad and was re-printed with his permission. 
Editor

DARING TO REACH FOR GREATNESS
By Diego Trinidad

The first Trinidads emigrated to Cuba from Seville, Spain in the late 19th century. By 1900 the family of Ramon Trinidad was well established in Santa Clara, the capital city of Cuba's central province of Las Villas. Brothers Ramon Jr. and Diego were very close, even as young boys, and by their 20s they soon showed the entrepreneurial spark that would catapult them into the elite of Cuba's industry. The brothers would buy hardware and kitchenware in Santa Clara at wholesale prices and go into the countryside on horseback to sell to isolated peasant households. They made healthy profits and provided a needed service, but it was long and burdensome work.

Cuba's premiere tobacco producing land is in the western-most province of Pinar del Rio. But there is another region just as important around Manicaragua, in southern Las Villas which also produces excellent tobacco. Diego realized that as Ramon and he returned from their selling trips, their empty mule trains could bring back something valuable to Santa Clara. That something was leaf tobacco purchased from Manicaragua growers and then sold at a small profit to Santa Clara wholesale cigars manufacturers. But after a few trips, the brothers saw that much bigger profits were on hand in the manufacturing field.

Diego had a girlfriend in the small town of Ranchuelo, about 20 miles from Santa Clara. While visiting his girlfriend, he met two skilled cigar makers there. Realizing the potential, he and Ramon moved to Ranchuelo in 1905 and with seven cigars makers launched Trinidad y Hermano from the living room of their small rented house. They did so well that in two years they bought a large building next to the city hall, their first manufacturing plant. By now they had about 50 cigar makers and had a prosperous business. But an accident almost sank the fledgling venture. Diego bought a crop of leaf tobacco twice as big as usual. A few days later, to their horror, the brothers discovered most of the crop was ridden with worms. Ruin beckoned. Then Diego came up with a brilliant idea that not only saved the day, but also transformed the business. They chopped up the salvageable part of the tobacco crop to make cigarettes, and suddenly, their factory became a cigarette factory and they almost doubled their profits by year's end.

In 1919, they expanded again, building a new two story factory along the important Santa Clara-Cienfuegos highway. The 10,000 square meter modern building housed newly acquired cigarette making machinery and the secondary hand made wholesale cigars operation. The second floor was used for tobacco storage and aging. Around 150 employees worked full time by then and the Trinidads were on their way to becoming one of Cuba's larger cigarette makers.

In 1920, the two brothers, although they continued to be extremely close personally, each began to drift apart professionally. Ramon, always the "diplomat" of the family and always more interested in public relations, went into politics. That year, he was elected mayor of Ranchuelo for four straight terms. In 1930 he was elected to Congress in Havana as representative for Las Villas province. Diego, always more the "engine" of the firm, became much more involved in upgrading and modernizing the operation.

In 1928, a third floor was added to the building to increase the storage capacity, which started the first nationwide distribution system in Cuba's business history. Trinidad y Hermano became the first truly "national" cigarette in Cuba and the best selling brand in the country outside Havana. Adelardo Garcia, an organizational wizard, set up agencies in every town throughout the Island, and personally managed those in Santiago de Cuba, Cuba's second large city, Camaguey and Sagua la Grande. The business continued to flourish, mostly as a cigarette producer. But a small and important cigar-making section was kept going, producing an extremely select brand of cigars. Remembering what got them started, the cigar-making section was always maintained until the end of 1960.

The political chaos of the mid 30's, especially a long and bitter labor strike in 1933, were troublesome. But government interference in arbitrary setting limits on the selling price of cigarettes was a far worse potential threat to future expansion of the industry. The 1933 strike did have serious consequences though, as Diego became fed up with a now communist-led workers union that emerged after the strike, and decided to join Ramon and moved to Havana. A younger brother, Amado, was left in charge of the factory in Ranchuelo. This was probably the biggest mistake Diego ever made. To break the strike, Amado hired 150 new workers. The newly established government, controlled by military strong man Fulgencio Batista, settled the strike one month later and the previous 250 employees had to be reinstalled. But by government decree, the new 150 workers had to be kept on, too. The result was that for the next 27 years, there was a surplus of workers in the factory and this had dire consequences for the future profitability of the firm.

Ramon died in 1936, and Diego became seriously ill from kidney failure in 1940. Amado left the firm after Ramon's death and with his inheritance, founded one of Havana's top radio and TV stations and became known as the "patron saint" of Cuban performers. A Ranchuelo business man, Salvador Gonzalez, was named general manager and by 1940, Diego Jr., now 17, and recently graduated from high school out of a New York military academy, became involved in the administration of the firm.

Diego completed one year of college in Havana, but went back to Ranchuelo to continue his learning process. Unfortunately, the administration of the business since Diego Sr. left for Havana in 1933, had gradually deteriorated, to the point that when he died in 1946, Trinidad y Hermano was almost bankrupt. At 21, Diego Jr., took full control, and the modem business practices that he had learned in his stay in the U.S., began to pay dividends right away.

He began by bringing in a young nucleus of professionals, among whom the most prominent were his brother-in-law, Armando Quesada, Guillermo Sandoval, and Ranchuelo attorney Gabriel Pedroso. But his most important collaborator became his young wife Estela, daughter of Adelardo Garcia, whom he had married in 1945. Salvador Gonzalez was paid off and sent into early retirement. And by 1951, Diego began a frantic process of modernization that completely revolutionized not just Trinidad y Hermano, but the entire cigarette industry in Cuba.

First the old partnership was converted into a corporation. The few minor partners were bought out and Diego ended up as the 100% stock holder. Then he brought in an American Machine and Foundry top executive from Richmond, Virginia, George Williams, to conduct the first time-and-motion study done in Cuba. Williams, an industrial engineer, made a number of beneficial recommendations. Most were adopted, including a highly controversial plan that completely mechanized the factory.

The union fought it tooth and nail and it cost well over $1,000,000, mostly for the acquisition of the latest cigarette-making machinery. But an improved relationship with a Cuban-owned bank, The Trust Company of Cuba, which took over as the firms banker from the Royal Trust of Canada, which refused to finance the risky venture, was greatly helpful. And Williams also concluded that the factory had 150 employees that were superfluous--the same 150 hired by Amado in 1933 to "break" the strike. The problem was that neither the still communist-led union nor the Ministry of Labor in Havana would allow to fire these employees, they were kept. Trinidad y Hermano paid the highest minimum weekly salary in the industry, with 40 hours of labor and 48 hours pay. And through it all, Diego and his dynamic staff stayed the course and eventually prevailed.

In 1955, he hired another top executive from Proctor and Gamble's Cuban subsidiary, Carlos Segrera, as Sales Manager. Segrera increased the advertising budget tremendously and was behind more up-to-date sales strategies. In 1956, the company introduced the "Especiales" brand of cigarettes. A longer thicker cigarette geared towards Cuba's working classes and peasants, it was spectacularly successful. And it boasted another Trinidad innovation: thermo-aluminium inner foil purchased from J.R. Reynolds Tobacco for additional freshness. It was heavily promoted by an aggressive campaign sponsoring sporting events and relaying strongly on the popular TV market. By the end of 1956, the firm became fully computerized, another "first" in Cuba. When the Batista regime fell at the end of 1958 due to a deadly combination of political ineptitude, both on the part of the dictatorship and of the U.S. State Department, and a series of lucky breaks never to be repeated anywhere in the world, Trinidad y Hermano was making a profit of over $1,000,000 after taxes.

By the end of 1959, Trinidad y Hermano had settled another potentially disastrous labor strike before it began by introducing Cuba's first profit sharing plan. A completely revolutionary idea at the time, conceived by the brilliant attorney Pedroso, the company almost doubled its profits from the record previous year and finally surpassed "El Cuno" as the largest cigarette manufacturer in Cuba. But Diego was not finished yet. In 1958, he also signed a huge deal with British Tobacco to build a new cigarette factory in Mariel to produce American-type cigarettes. And he had everything ready to go back to Trinidad y Hermano's roots: to introduce the finest line of cigars made in Cuba. To that effect, he registered a new name for the cigars, TTT LA HABANA CUBA in the Cuban Office of Trademarks and Patents in March, 1958.

In September 1960, the Cuban government took over the entire cigarette-tobacco industry. Diego and his family, 16 people altogether, left Cuba for the U.S. at the end of November 1960. In early 1961, the Cuban government "nationalized" Trinidad y Hermano. Not a penny was ever paid to the Trinidad family in compensation and in June 1961, by government decree, the trademark originally registered by Diego in 1958, was "confiscated" by the government.

With the generous assistance of the Oliva family in Tampa, and making use of his contacts in the U.S., and his knowledge of the industry, Diego started Black Tobacco Company in Miami in 1961 to distribute Cuban-type cigarettes in the U.S., made by Larouss Tobacco of Richmond, Virginia. He also registered Trinidad y Hermano in Washington early that year. The Centrofinos Trinidad cigarettes were highly successful, but basically only among the scattered Cuban exile centers in the U.S., mainly South Florida and New York/New Jersey, although the cigarettes were also sold in Chicago, Houston, Los Angeles, and Puerto Rico.

Finally, in 1968, Diego realized a dream: manufactured by the Arturo Fuente factory in Tampa, he introduced Trinidad cigars in the U.S., marketed for the first time since the 1930's. When he died in 1980, the Trinidad and Fuente families had plans to produce a high quality line of cigars. By then, the Fuentes began their trek through Nicaragua, Honduras, and the Dominican Republic, where they finally settled and started a cigar-making operation from scratch, with only seven rollers who had to be taught by Carlos Fuente Sr. The rest is history ... In little over 10 years, Tabacalera A. Fuente went to become one of the world's largest hand-made cigar manufacturers.

Almost 17 long years after it was conceived, the joint dream of two families of pioneers in the tobacco industry is about to be fulfilled. Again hand-made by the finest cigar makers in the Fuente organization, and using the best aged tobacco available, the Trinidad family has launched a line of what they confidently believe is one of the best cigars in the world. As Ramon and Diego Trinidad dreamed in 1905 and then proceeded to accomplish, and as Diego Trinidad Jr., reached even higher greatness, the third generation of Trinidads, still headed by "matriarch" Estela, is now ready to fulfill its destiny: continue to reach for greatness.

 

 

 

 

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