Putting the World to Rights with Edward Sahakian
Every now and again you meet one of those people with whom you immediately ‘click’, and feel like you could spend hours talking to. I had this very feeling when I got to chatting to Edward Sahakian, owner of Davidoff’s St. James Street store. So fantastic was it talking to him, and it really was more of a conversation, and was never even really intended to be an interview per se, that I thought I would relay some of his charm and charisma.
Born in Iran, Edward Sahakian originally started out brewing beer. We get to talking about this while we are discussing the changes in US/Cuban relations – a subject upon which I touched briefly during my 60 seconds with Mitchell Orchant. We were musing over what might happen to the US cigar market were the embargo to be lifted. To this, Edward responds that he’s seen something very similar first hand in Iran, but with beer.
With the start of the White Revolution, a series of reforms imposed by Shah Mohammad Reza Pahlavi, new trade opportunities became possible. Suddenly, beers from all over the world were being imported into Iran. Edward tells me how, despite this influx of mainstream (and in some cases – his words not mine – better quality) beer, the demand for his family’s beer remained strong. The locals had developed a taste for it, and no matter what was available on the market, this was the beer they wanted.
This is what Sahakian Sr. sees happening in the ‘States if the trade embargo were to be lifted. Ultimately, he postulates (and I have good reason to believe him), that whilst there will be an initial high demand for Cuban cigars, ultimately the two or three generations of cigars smokers who have never known anything other than New World cigars will revert back to them. They either won’t see the value in the pricier Cubans, or will just prefer the flavour of their old stalwarts.
This sudden hypothetical spike in demand in the US for Cuban cigars set Edward and I off at a different tangent. We dance around the various people who are coming in and out of the walk-in humidor, allowing them to get to the myriad blends and vintages that surround us. I’m starting to discover that a walk-in humidor is not unlike a casino – there are no clocks or windows, the temperature and humidity is always the same – we could have been talking for hours.
I digress. The mythical US demand for Cubans. Back in the room.
So with a lift to the embargo, suddenly every cigar smoker in the US wants to get his (or her) hands on a genuine Cuban cigar. In 2013, the Centre for Disease Control (CDC) estimated that there were 12.4 million cigar smokers in the US. Now, granted many of this contingent may be smoking cigarillos or similar, but it will work as a general indicator. Imagine if each one of these cigar smokers decided that they wanted to try Cuban cigars. Each on average buys and smokes, say, two. That’s a spike in demand in the US alone of nearly 25 million cigars. I can’t be sure what the current annual output of Cuba is, but it’ll be somewhere between 75 and 100 million – dependent on harvests, at a guess. Even without the American market, Edward tells me, there are not enough Cuban cigars to go around. Imagine then, the vacuum created by the demand for 25 million cigars for the US.
Edward Sahakian, a veritable Nostradamus – though I’ll wager, he’ll actually be right – believes this sudden demand will have a number of effects. Firstly, it will result in a shortage of Cuban cigars. That’s not so much as a prophecy as an aphorism. To cope, however, Habanos will have to be more selective about the markets that it chooses to supply. I’m going to make my own personal prediction here: heard of the 80/20 rule? Also known as Pareto’s Law? Applied in this case, it would suggest that 80 percent of the world’s cigars are supplied through 20% of its retailers. It’ll be these 20% that will be first on the block when the shortage hits.
Then price elasticity comes into play – supply and demand, my friend – and the resulting shortage will drive the price of what cigars are available through the roof. To some extent, surges in demand and light harvests in recent years are already causing this to happen.
Edward then surmises that the Cuban manufacturers will step up production to try to meet demands. Again referring to his days as a brewer, where the beer used to be left to ferment for days on end, this time was trimmed to the minimum as demand surged. Fifteen days where usually twenty was needed, then ten, then five. No doubt, quality suffered as a result – but they had to make the product to sell to all these willing buyers. He predicts the same will happen for Cuban cigars. The pressure to manufacture increasingly large quantities will result in corners being cut. Quality control will miss things, maybe the ratios in the blends will be off, or maybe the cigars won’t be aged or ferment as long as they should.
While this is happening, the New World cigar makers of the Dominican Republic (i.e. Davidoff), the USA and anyone else in between will begin stepping up their production. While their supply demands will likely take a short-term dip as the balance of favour tips to Cuba, they can focus on getting their houses in order. They will focus on absolute perfection, producing the highest quality cigars and blends the world will ever see, so that when people return to the New World, the New World will be waiting with open arms.
Edward and I finish our conversation with a final prophecy from him, and as we talk about it, his eyes sparkle ever more brightly. He hopes that in not too long, manufacturers will start buying Cuban tobacco, and use it to make the finest cigars of unimpeachable quality, only rolled in the Dominican Republic. He pauses for a minute, and adds, “I just hope it’s in my lifetime.”
Davidoff of London
35 St. James’s Street