Mike Gold, Arango’s president, sees opportunity in young, hip tobacco explorers looking toward the pipe world
By William C. Nelson
Sophisticated pipe shop customers love their Nording, Ascorti, Chacom and Mastro de Paja pipes, and those rich Esoterica, Germain and Rattray pipe tobaccos, whose gourmet appeal is inspiring a new generation of tin hoarders. Consumers fitting that description may not know it, but there is a common supply thread running through their pipe smoking fancies. Arango Cigar Co., a powerhouse pipe and tobacco importer and wholesaler, claims exclusive United States distribution rights to the above names and more. Indeed, the full line of pipe-related Arango offerings exceeds 1,000 SKUs.
It was 36 years ago, in 1981, when Mike Gold and his family purchased the company from the Arango family, who were cigar manufacturers in Tampa, Florida. Today Mike Gold, now 61 and an occasional pipe and cigar smoker himself, runs the company, along with his wife, Linda, and sister, Cindy. Recently Gold’s son Corey joined the family business as well.
Mike Gold (right) with Josh Weiser
Though cigars form the biggest share of Arango’s revenue (the company carries more than 3,000 cigar SKUs), Gold controls a sizable share of American pipe commerce. These days he keeps his eye on a new generation of smokers who first whetted their appetites for exotic tobaccos in hookah bars. Gold says these smokers are now getting older and maturing into increasingly discriminating tastes. He thinks these consumers represent a marketing opportunity for pipe sellers.
“A lot of these young adults who have, so far, mainly experienced hookah smoking are growing out of the hookah bar scene,” Gold says. “More and more of them are walking into pipe shops seeking to experiment with finer pipes and tobaccos. So their earlier experience has opened up a window for us to bring new, younger smokers of age into the pipe smoking hobby.”
Gold’s hunch finds some support in the observations of Kevin Levi, vice president at Iwan Ries & Company, a large Chicago pipe shop doing business for more than 150 years. Levi says he has lately been seeing a new contingent of young shoppers stopping by the store. “They typically are groups of college students, often in study groups. They’ve been noticeable for the past five years or so. They don’t want to smoke cigarettes, but they do want some kind of common hobby. There will be seven to 10 of them at a time coming in together on the weekend to check out pipes and start getting into pipe smoking,” Levi says.
Iwan Ries exemplifies just what pipe newcomers need, in Gold’s view: a friendly and well-stocked brick-and-mortar operator willing to show novices the way. Gold understandably takes a personal interest in making sure that B&M operators are equipped to serve inquisitive new connoisseurs adequately.
Arango is headquartered in a 22,000-square-foot facility located in the central transportation hub of Northbrook, Illinois. Arango’s pipe specialist, Joshua Weiser, says the firm routinely has on hand more than 24,000 pipes in its warehouse, as well as most known pipe tobaccos from the four corners of the earth.
For many years basket pipes did the heavy lifting in the Arango pipe portfolio. Indeed, the company still sells on the order of 7,000 basket pipes annually, carrying wholesale prices that typically run from $10 to $15 per pipe. “We sell a lot of Italian basket pipes,” Weiser says. “We bring them over in bulk and sell them to retailers all over the country”—accounts numbering some 2,000 pipe retailers in the States alone. “Nording is our biggest-selling brand-name pipe,” Gold adds, “and Chacom is No. 2 in the lineup.” On the high end of Arango’s pipe pricing, some Nording units command as much as $1,000 wholesale. So a wide range of pricing is represented in the company’s list of offerings.
Gold recalls, “Erik Nording was the pipemaker who really put us into the business of selling nice pipes. We had been selling basket pipes for a long time, but around 2007 I visited with Erik and struck up a business relationship. Today we also have Ascorti, Chacom, Gigi, Mastro de Paja, Credo and Wessex, to name a few.” Arango is the exclusive U.S. importer for Nording, Ascorti, and Chacom pipes, and the company owns the trademark on Torino pipes.
“Cigars are still our primary business,” says Gold. “I’d say cigars account for probably three-quarters of our business. But we want to be a full-service wholesaler and importer, so we’re big in pipes, pipe tobaccos, and smokers accessories like humidors and cutters, ashtrays, humidifiers, and smokers candles. We can supply whatever a tobacco shop needs within its four walls.”
Arango’s pipe-related business amounts to about 20 percent of Arango sales, but in absolute numbers the totals are remarkable. “We move more than 30,000 pipes per year,” Weiser says. Gold adds, “Just the monitoring and logging of each individual pipe in the inventory is a major challenge that people might not fully comprehend unless they have ever faced it.”
As for tobacco, Gold says, “We’re probably one of the top three tobacco distributors in the United States, in tins, pouches and bulk. Just to give you an idea, you take a product like STG Lane’s 1-Q, for instance. It comes in 5-pound bags. Just in that one SKU we sell more than 30,000 pounds per year. Then there are additional popular bulk items like BCA, Peter Stokkebye, Sutliff and Mac Baren and others.” Gold figures pipe tobacco only amounts to about 10 percent of Arango’s revenue, but all told, he says, the company moves in the neighborhood of a staggering 250,000 pounds of tobacco every year. Weiser says the company sells more than 100,000 tins annually.
With 16 full-time employees working for him, all of them like family, Gold takes pride in the level of customer service Arango is able to extend. “Our staff is one of the best,” he says. “They are very knowledgeable in every product we sell, and they are good at getting products into retailers’ hands—not just the products they come looking for but also guidance toward an optimum product mix. Retailers can expect keystone pricing from Arango, and our central location means we can reach our U.S. customers via UPS in three days or less.”
George Hoffman, owner of Pipes by George, for nearly 30 years a fixture in Raleigh, North Carolina, confirms the claim. “Arango delivers fast,” Hoffman says. “They’ve just always been a very easy outfit to deal with. One quick phone call to Arango and UPS delivers the goods to my counter three days later.”
Gold keeps active politically in the realm of business lobbying, maintaining membership in all the relevant groups. “I sit on the board of the Pipe Tobacco Council, which is a national organization of pipe tobacco manufacturers,” Gold says. “I’m also on the boards of the Cigar Association of America and the National Association of Tobacco Outlets. In the past, I have also been on the boards of the IPCPR and the Tobacconists’ Association of America.” Gold sees such affiliations as necessary if the industry is to guard effectively against government overreach. “Right now we have a lawsuit against the city of Chicago,” he says. “They are trying to tax pipe tobacco and cigars at the city level, which we believe is unconstitutional. So we intend to stop that tax.”
Of the FDA deeming regulations that have lately roiled the industry, and questions about whether the election of Donald Trump to the presidency might spell an end to that threat, Gold says, “We are hopeful, but clearly we do not figure in the top 10 items of concern for the incoming administration.” Even so, it can only be an encouraging sign to see tobacco-friendly people associated with any incoming president. Gold points out, “We see the close association with Trump of people like Rudy Giuliani, who is a very major supporter of the cigar industry. Giuliani is personal friends with Marvin Shanken and many others in the business.”
Gold adds, “We also have Mike Pence as a promising vice president-elect. His family owned convenience stores and discount tobacco shops in the state of Indiana for many years. Pence was a strong supporter of our industry when he was in the House of Representatives. So from our perspective you can’t ask for two more open-minded people to be associated with an incoming administration than Giuliani and Pence. But of course that doesn’t guarantee anything.”
Gold says, “We visit our suppliers and maintain good relationships. I have visited all the pipemakers we do business with. Josh was in Denmark not too long ago touring the factories of STG Lane. We get around. Our sales force visits retailers and stands ready to work with them, for instance in setting up pipe shows.” Weiser recently helped stage a pipe event at The Briar & The Burley in Bloomington, Indiana. He says, “For Bloomington residents, a big pipe event like the Chicago pipe show is a five-hour drive. So a special event at a local retailer is a great way to put products in the hands of pipe smokers that they normally wouldn’t get to see.”
Gold recognizes that many retailers today are interested exclusively in marketing cigars. But he thinks there is an opportunity for those who have not yet tried to develop a pipe and pipe tobacco business to move effectively in that direction. “Retailers should keep an open mind toward the pipe business,” Gold says. “The key to any brick-and-mortar operation is to get as many feet walking in through the door as you can.” Gold says offering new customers a pipe smoking option goes to the strategy of capturing as many consumers as you possibly can within the market area you service. “If you don’t present the wide range of product options that your walk-in customers have on their minds, they’re not going to be happy. Every retailer should strive to deliver customer satisfaction.”