How Nicaragua Became The Leading Premium Cigar Maker in The World

While Cuba has been synonymous with cigars, it's actually Nicaragua that holds the enviable position of the world's No. 1 producer of handmade premium cigars. 

Nicaragua has 70 factories that produce nearly 150 million cigars annually under 5,000 different brands. Nicaraguan cigars also frequently rank on American trade magazine Cigar Aficionado's top 10 cigars of the year list.

However, the journey to the top has been a turbulent one ridden with hardship and several political crises.

Here's a look into how the Nicaraguan cigar industry has gotten where it is today.

The Birth of The Nicaraguan Cigar Industry

While tobacco had been cultivated in Nicaragua for over a century, the production of cigars didn't start until the 1960s.

If you've been following our Cigar History Series, you've probably noticed two reoccurring themes—the U.S. embargo and Fidel Castro's nationalization of private enterprises.

Shortly after coming into power, Castro's decision to nationalize some of the private corporations in Cuba forever changed the global cigar landscape. 

First, he took over most cigar-making plantations and factories despite the owners financing the revolution that got him into power. Talk about a stab in the back!

But he didn't stop there. He also nationalized all the US-owned Cuban oil refineries after they refused to refine his Soviet-bought crude oil.

This decision had two far-reaching consequences.

First, most Cuban cigar barons fled to the neighboring countries such as the Dominican Republic and the focus of this article, Nicaragua. 

Nicaragua's soil and climatic conditions proved to be perfect for growing their revered Cuban cigar seed.

The second consequence was U.S. Embargo against Cuba. In 1962, John F. Kennedy signed Proclamation 3447, which imposed a "complete embargo on all trade with Cuba" one year after the two nations had broken off diplomatic relations.

This meant Cuba could no longer export its products to the U.S., including its cigars which Americans had fallen in love with. In fact, before signing the proclamation, President Kennedy tasked his press secretary to go and buy as many H. Upmann petite coronas as he could find. Like thousands of his fellow Americans, he had grown very fond of Cuban cigars.

Anastasio Somoza, the former Nicaraguan dictator, jumped at the opportunity and decided to finance the Cubans who had relocated to his country. He directed the nation's central bank president to create a new government agency called INFONAC. Tasked with the development and promotion of the cigar industry, INFONAC would import insecticides and machinery and avail them to the exiled Cuban cigar families.

At first, many cigar makers mostly used the tobacco grown in Nicaragua to roll the cigars in small factories in places like Miami. 

However, in the 1970s, established cigar brands like Arturo Fuente started opening cigar factories and acquiring land for growing tobacco. This brought the Nicaraguan cigar industry to the global scene. 

Carlos Fuente, Sr. and Carlos Fuente, Jr

By 1976, led by Joya de Nicaragua (the first premium cigar manufacturer in Nicaragua), the industry was responsible for almost a fifth of U.S. premium cigar sales.

However, the success was to be short-lived.

Nicaraguan Revolution

The Sandinista revolution led by Daniel Ortega, deposed the Nicaraguan president Anastasio Somoza in 1979. During this time, a few cigar farms and factories were set ablaze and destroyed. 

At one point, Somoza-loyal planes dropped bombs on the Joya de Nicaragua factory as they passed overhead, believing Sandinistas were using it as a base. 

This was interesting because Somoza himself had helped set up the factory 11 years earlier, in 1968! 

However, when the Sandinistas took power, they quickly adopted Castro's model of expropriating cigar farms and factories, including the damaged Joya de Nicaragua factory.

Once again, some of the Cuban cigar exiles had to find a new home. For example, Arturo Fuente moved operations to the Dominican Republic while other manufacturers went to Honduras.  

Since not all farms were confiscated, some Cuban cigar producers were able to continue with their business. Others who were not so lucky lost control over their farms and were forced to buy cigar tobacco directly from the Daniel Ortega-led government.

Daniel Ortega with Fidel Castro

If that wasn't bad enough, things were about to get worse.

The U.S. under President Ronald Reagan imposed an embargo on Nicaragua in 1984. This was a response to what the Americans classified as Nicaragua's support for "Marxist" revolutionary movements in other Latin American countries.

Like the ban on Cuban cigars, the Nicaraguan cigars industry was decimated by the embargo as it could no longer sell cigars in its largest market.

Eventually, when a new, non-Sandinista government won the election in 1990, the embargo was lifted. Cigar families like The Plasencia and The Olivia family were awarded new tobacco fields in place of the ones they had lost and resumed their production in Nicaragua. 

The cigar business gradually recovered, and the 'cigar boom' of the mid-90s gave rise to the modern Nicaraguan cigar industry.

Esteli, Nicaragua's Tobacco Haven

Estelí is Nicaragua’s cigar capital. Its rich, dark & fertile volcanic soil, packed with minerals, produces corpulent and tasty tobacco leaves with spicy, strong, and rustic notes.

Apart from Esteli, the two other tobacco-growing regions are the Condega and Jalapa valleys in the north, each with its own distinct soils and minerals. Part of the lure of Nicaraguan cigar tobacco is that "the same seeds planted in different soils and climatic regions give different yet fantastic flavors"

This has made Nicaragua an indispensable producer of tobacco raw materials such as Nicaraguan leaves, used in many blends of other countries' cigars.

Studies show that for every direct job in the cigar industry (cultivating, curing or rolling cigar tobacco), 3 or 4 indirect jobs are created.

So it's not surprising that at least 50% of Esteli's population lives off the cigar industry in one way or another. 

Today's Prominent Nicaraguan Cigar Brands

A great number of the world's best cigars are either made in Nicaragua or contain Nicaraguan tobacco. This is because Nicaragua cigar tobacco is highly valued for its medium to full-bodied flavors that display a luscious regional spice. 

Brands like Padron, La Aroma de Cuba, and My Father have built their reputations in Nicaragua through their sought-after premium cigar blends.

A perfect example is E.P. Carrillo Encore Majestic, Cigar Aficionado's 2018 '#1 Cigar of the Year'. The Majestic is all-Nicaraguan tobacco rolled in the E.P. Carrillo's factory in the Dominican Republic. 

Another one is My Father Le Bijou 1922, a 97-rated cigar from the renowned father-and-son cigar-making duo, Jose 'Pepin' Garcia and Jaime Garcia. The 2015 Cigar Aficionado's '#1 Cigar of the Year' honors uses Cuban-seed Nicaraguan Oscuro for its wrapper and well-aged Nicaraguan binder and filler tobaccos. 

The final example is Joya de Nicaragua Antaño 1970. Made by some of the original Joya rollers and blenders, this full-bodied cigar recaptures the exquisite taste that made the brand a force to reckon with in the 1970s.

To Wrap Up

In 2018, political turmoil rocked Nicaragua and threatened to derail the cigar industry again. Despite this, Nicaragua surpassed the Dominican Republic to become the largest cigar exporter in the world. 

The cigar industry continues to flourish despite the political upheaval and economic crisis brought about by the COVID-19 pandemic in 2020 and 2021.

This is truly a mark of the quality of Nicaragua cigars and the resilience the industry has built up over the years.