Is Nepotism Hurting the Cigar Industry More Than You Think?
- The Cigar Profit
- Mar 11
- 14 min read
Tradition, Loyalty, and the Leadership Trap
The premium cigar industry thrives on stories — family legacies, traditions, and passion passed down through generations. These stories shape brand identities and build consumer loyalty. But here’s the cold truth: tradition doesn’t guarantee success.
In fact, tradition can become a trap. When cigar brands cling too tightly to family leadership without demanding performance and accountability, disaster often follows. Nepotism — promoting family members based on relationship rather than merit — is one of the riskiest moves a cigar brand can make. Yet it happens all the time.
Why? Because owners get too emotionally invested to see the risk.
For founders, passing the reins to family feels safe — a natural choice. But here’s the hard truth: Leadership isn’t a birthright — it’s a responsibility. Unless that responsibility is earned, disaster isn’t a matter of “if,” but “when.”
Family leadership can work — some of the industry’s strongest businesses are family-run. But they succeed because those family leaders earned their positions. They started at the bottom, proved their value, and rose to the top — not because of their last name, but because they delivered results.
That’s meritocracy — the factor that separates thriving family businesses from those that collapse under the weight of tradition.
The cigar industry is especially vulnerable to nepotism because it romanticizes family ties. Consumers connect to those stories — the idea that a cigar has the potential to tell a family’s history. But here’s the truth: Stories don’t keep a business running. Smart decisions do. And those decisions must be made by leaders with the skills, vision, and resilience to navigate market shifts and consumer trends.
Too often, business owners confuse emotional loyalty with leadership ability. They promote family members who aren’t ready — or worse, aren’t capable — simply because they feel they “should.” Sometimes it’s guilt — the founder feels they owe family a role. Other times, it’s ego — the belief that no outsider can understand the brand.
The result? Talented employees — the ones with the skills to stabilize and grow the business — get overlooked. They leave, taking their knowledge and contacts with them. Meanwhile, the underqualified family member struggles, weakens the brand, and drags the business down.
By the time founders realize the damage, it’s often irreversible.
The businesses that thrive are those that embrace meritocracy — rewarding performance, skill, and results, regardless of bloodlines. It’s not about rejecting family involvement — it’s about ensuring family leaders earn their roles the same way anyone else would.
The question isn’t, “Can nepotism work?” The question is, “Are you willing to hold family to the same standards as everyone else?”
Because if you’re not, you’re putting your company’s future — and your legacy — at risk.
When Nepotism Becomes a Liability: When Family Ties Undermine Performance
For premium cigar business owners, handing leadership to family often feels natural — even noble. After all, they’ve spent years — sometimes decades — building something from nothing. Entrusting that legacy to a child, sibling, or cousin feels like loyalty at its finest.
But here’s the hard truth: Loyalty without accountability leads to failure.
Nepotism doesn’t fail because family members are inherently less capable — it fails because they’re often held to lower standards. I’ve witnessed businesses — not just cigar brands — crumble because founders let emotion dictate leadership decisions.
Promoting family without insisting on results isn’t protecting your legacy — it’s gambling with it.
1. Emotional Decisions Over Business Logic
The premium cigar industry is deeply personal for many founders. A plethora have built their businesses from scratch, overcoming intense competition and regulatory pressures. After that kind of fight, they cling to the belief that only family can understand the “soul” of the brand.
This emotional mindset leads to rationalizations like:
“He’s been around the business his whole life. He knows cigars.”
“My daughter grew up watching me work — she’ll figure it out.”
“I owe it to my family to pass this down.”
These assumptions feel comforting — but comfort kills businesses.
Leadership requires skills in operations, sales, and decision-making under pressure. Promoting someone who hasn’t been tested in those areas is reckless. And in a competitive industry like cigars, that’s a risk you can’t afford.
2. Talent Exodus: When Good People Walk Away
When loyalty overrides merit, your best employees leave — every time.
Imagine you’re a seasoned sales manager who’s built strong retailer relationships, driven sales, and improved margins. Now, imagine getting passed over for a leadership role because the founder’s son — with little experience — was handed the job.
What’s your next move?
You leave — and take your insights, contacts, and knowledge of market trends with you.
Talented employees won’t stay when they see no path forward. Worse, they often join competitors — giving your rivals an advantage you once owned.
3. Cultural Decay: When Resentment Kills Performance
Favoritism sends a clear, toxic message: Results don’t matter.
Resentment spreads, morale collapses, and employees disengage. People stop pushing for results when they know performance won’t be rewarded.
This creates a divide: family vs. everyone else. Whisper networks replace collaboration, and soon, the business runs on gossip instead of teamwork.
The result? Decision-making slows, creativity fades, and your strongest employees give up.
4. Brand Erosion: When Family Ties Undermine Consumer Trust
Cigar consumers value consistency, quality, and experience. It's a common misconception among founders that most consumers cling to family stories.
When family-driven mismanagement leads to poor product quality, missed deliveries, or broken retailer relationships, consumers notice — and they walk away. Quickly.
A family-run cigar brand may feel timeless to its owners. But to consumers? It’s only as good as its last cigar. Once they lose trust, they rarely return.
In business, loyalty is earned through performance — not bloodlines. Ignore that, and you’re putting your legacy on the line.
The Brutal Truth: Loyalty Isn’t Leadership
Promoting family members who haven’t earned their role isn’t just unjust — it’s dangerous. It undermines trust, drives away top talent, and weakens your reputation with retailers and consumers alike.
In the premium cigar industry — where success hinges on relationships, consistency, and trust — that’s a recipe for disaster.
Here’s the truth: Blood doesn’t guarantee leadership ability — results do.
Smart leaders make decisions based on performance — not emotion. The moment you let loyalty override logic, you’re not protecting your legacy — you’re risking it.
When Family Leadership Can Work: Earning the Role, Not Assuming It
Nepotism isn’t always bad. Family leadership can thrive — when family members earn their roles through performance.
In fact, family leaders can outperform outsiders when they’ve grown up immersed in the culture, product, and industry relationships. But that success only happens when they’ve proven their value — not inherited their position. Successful family leaders are:
✅ Trained from the ground up
✅ Held accountable for performance
✅ Respected by their peers for results — not their last name
The difference? They earn their position.
1. Start at the Bottom: Building Skills from the Ground Up
Family members who skip frontline experience often miss crucial lessons. The best family leaders spend time:
✅ Working sales — learning customer and retailer relationships
✅ Managing logistics — understanding inventory flow and purchasing cycles
✅ Handling customer service — resolving issues and building loyalty
✅ Participating in product development — knowing what makes a cigar successful
Starting at the bottom isn’t a punishment — it’s preparation. Leaders who’ve proven their skills gain employee trust. Without that, they’re just title holders — not decision-makers.
2. Performance Before Promotion: Earning Respect
Results-driven cigar businesses base promotions — family or otherwise — on measurable performance. Set clear benchmarks:
✅ Sales growth in assigned territories (be it inside sales or outside sales)
✅ Improved customer retention
✅ Strong retailer partnerships
✅ Operational efficiencies
✅ Successful leadership of projects or teams
Clear metrics ensure family members prove themselves — while showing employees that results, not relationships, drive promotion.
3. Mentorship: The “X-Factor” for Family Leaders
Family leaders often inherit the founder’s legacy — a heavy burden. Without guidance, they struggle. Founders must invest in mentorship — through trusted advisors or non-family mentors. A strong mentor:
✅ Challenges their thinking
✅ Builds confidence in decision-making
✅ Offers perspective when emotions run high
✅ Develops critical skills like negotiation and conflict resolution
Mentorship bridges the gap between family ties and real leadership.
4. Accountability: No Exceptions
Here’s where founders often fail: assuming family members don’t need accountability.
Wrong.
If anything, family leaders require stricter accountability. When a family leader fails, employees blame favoritism — and resentment spreads.Create accountability guardrails:
✅ Set clear KPIs for performance
✅ Implement regular reviews by non-family leaders
✅ Enforce real consequences for poor performance — no exceptions
Fail to hold family accountable, and you’re babysitting — not leading.
5. Earning Trust Through Action
People don’t follow titles — they follow leaders.
Family members who want to succeed must earn trust by delivering results. Employees don’t care about your son’s last name — they care that he can close deals, hit goals, and improve margins.
In the cigar industry, trust drives success — and without it, family leaders fail.
The Bottom Line: Make Them Earn It
Family leadership can succeed — but only when family members earn their roles. The best family leaders:
✅ Start at the bottom
✅ Deliver measurable results
✅ Embrace mentorship and growth
✅ Commit to accountability — even when uncomfortable
Your family’s legacy isn’t your name — it’s the success of the business you’ve built. Don’t gamble that legacy by promoting someone based on blood instead of results.
If you’re serious about protecting your business — make family earn it.
The Rolando Reyes Case Study: When Legacy Outpaces Leadership*
Rolando Reyes Sr.’s story shows how legacy can both elevate and undermine a business. His journey illustrates how family businesses can thrive — and the risks they face when loyalty overrides performance.
The Rise of a Legacy
Reyes wasn’t just another cigar maker — he was a master of the craft. Starting as a torcedor in Cuban factories, he gained a reputation for precision. In 1945, at just 21, Reyes launched his own factory, Los Aliados, producing millions of cigars annually.
But in 1968, Cuba’s communist regime seized his assets. Reyes fled to the United States, starting from scratch. He opened a cigar shop in New Jersey, later expanding to Miami, and eventually Honduras, where Cuba Aliados and Puros Indios became renowned for quality.
Reyes’ obsession with perfection set him apart. He personally inspected thousands of cigars daily — ensuring consistency, no matter the scale.
When Family Enters the Picture
As the company grew, so did family involvement. Reyes’ son, Rolando Reyes Jr., introduced Puros Indios in 1995. Initially, the expansion worked, but conflict soon followed. Differences over sales, distribution, and brand direction created a rift, eventually causing Reyes Jr. to leave the company.
Despite the fallout, Reyes Sr. remained committed to keeping leadership in the family. In 2007, he promoted his grandson, Carlos E. Diez, to company president. Diez modernized the brand, renaming the company Reyes Family Cigars, adding new products, and rebranding its image.
While Diez’s ideas were bold, one element was missing: accountability. Innovation moved faster than execution. Long-time employees — those who built the brand — struggled with the rapid changes. Retailer engagement faltered, and once-loyal consumers became disengaged.
The Cost of Overlooking Talent
Despite Reyes Sr.’s meticulous attention to quality, his insistence on family-driven leadership ignored a critical truth: Leadership isn’t inherited — it’s earned.
Reyes Sr.’s dedication masked a deeper issue — there was no system for identifying or developing strong non-family talent. Skilled employees who could have stabilized the company were sidelined. By the time Reyes Sr. passed away in 2012, the company’s foundation had weakened.
In 2021, the Reyes family sold the Cuba Aliados, Puros Indios, and Roly trademarks to Oliva Cigar Company. Without Reyes Sr.’s oversight and control, the business could no longer sustain itself.
The Hard Lesson for Family-Run Businesses
The Reyes family’s story isn’t a failure — it’s a warning. Their mistake wasn’t involving family — it was failing to combine family involvement with structure, accountability, and performance-driven strategy.
What Smart Business Owners Should Learn
✅ Don’t assume your children — or any relative — are automatic successors. Make them earn that role.
✅ Establish clear performance benchmarks for leadership positions.
✅ Create systems that reward proven talent — not emotional ties.
Legacy without strategy is just a memory. Leadership must be earned.
*Note: The information presented is based on available sources and aims to provide an accurate account of the Reyes family's business journey. Sources: Facebook, Cigar World, Cigar Fan, Cigar Aficionado, Wikipedia, Halfwheel, Cigar-Coop, Moodie Davitt Report, CigarsLover, Holts Clubhouse
Balancing Nepotism and Meritocracy: Creating an Even Playing Field
The tension between nepotism and meritocracy can cripple a family-run business. Family members may feel entitled to leadership roles simply because of their connection to the founder. Meanwhile, talented employees — who have the skills and experience to lead — grow frustrated as they’re overlooked.
The result? Division, resentment, and performance failure.
But here’s the truth: Nepotism and meritocracy aren’t mutually exclusive. Family leadership can thrive — if it’s earned through results, not relationships.
Here’s how to balance the two without compromising performance or alienating top talent.
1. Establish Clear Criteria for Leadership Roles
Family-run businesses often assume relatives will naturally step into leadership roles. That’s a mistake. To balance family involvement with meritocracy, you must define clear, written criteria for leadership positions. Define the following:
✅ Key Skills and Experience — Outline what a candidate must know before assuming a leadership role.
✅ Performance Benchmarks — Establish measurable goals like sales growth, cost savings, or customer retention improvements.
✅ Leadership Competencies — Identify traits like conflict resolution, delegation, and team alignment.
By creating these standards upfront, you eliminate emotion from promotion decisions. Everyone — family or not — must prove they can lead.
2. Implement a “Start at the Bottom” Policy
If a family member truly wants to earn their role, they should start in an entry-level position — not the boardroom. This approach achieves two key results:
✅ They learn the business from the ground up.
✅ They earn the respect of employees by proving themselves.
Employees trust leaders who’ve worked through customer complaints, inventory issues, and operational challenges. Skipping this experience creates a fragile leadership structure — one employees will quietly undermine.
3. Enforce Performance Reviews — With No Exceptions
A fair, results-driven culture requires performance reviews that apply to everyone — family included. This system should:
✅ Define role-specific KPIs.
✅ Measure performance against data — not assumptions.
✅ Enforce consequences for missed targets — even for family.
If you protect underperforming family members, you send one clear message: Results don’t matter here. That mindset cripples performance.
4. Establish Guardrails for Family Leaders
To minimize emotional bias, implement these safeguards:
✅ Assign experienced mentors to guide family leaders.
✅ Require a trial period before finalizing promotions.
✅ Develop a detailed succession plan to ensure stability during leadership transitions.
5. Reward Results — Not Relationships
If a non-family employee outperforms a relative, they should have the edge for promotion. It’s uncomfortable — but it’s necessary. Prioritizing family ties over performance drives away top talent and weakens your business.
6. Create Growth Paths for Non-Family Talent
Strong family-run businesses empower non-family talent with clear career paths, mentorship opportunities, and advancement potential. By showing employees that results — not politics — determine promotions, you reinforce a culture of meritocracy.
The Bottom Line
Nepotism only works when family members are held to the same standards as everyone else. The best businesses honor their legacy by promoting family members who’ve earned their role while creating opportunities for top talent to thrive.
Your family name isn’t your legacy — results are.
Build a Legacy That Lasts
In the premium cigar industry — where heritage and family stories shape brand identities — it’s easy for tradition to cloud judgment. Founders often believe their children or relatives are the best choice to carry that legacy forward.
But here’s the truth: A family name isn’t a leadership credential.
If you’re serious about protecting your brand’s future, you must accept that loyalty alone won’t guarantee success. To ensure your business survives long after you’re gone, you need the right people in the right roles — regardless of their last name.
Building a lasting legacy isn’t about favoritism — it’s about rewarding talent, accountability, and performance.
1. Tradition Must Serve Strategy — Not the Other Way Around
Tradition defines your brand’s story and connects with consumers. But tradition can’t replace strategy. If you allow tradition to dictate leadership decisions without accountability, you’re risking your company’s future.
Instead, treat tradition as a guiding principle — one that inspires your standards without dictating leadership. Tradition should reinforce your values, but strategy must drive results.
2. Leadership Is a Responsibility — Not a Birthright
Family members shouldn’t inherit leadership — they should earn it. Promote family only when they’ve demonstrated:
✅ The skills required to lead.
✅ A track record of delivering measurable results.
✅ The ability to inspire trust and accountability.
If a family member isn’t ready — or isn’t willing to develop — your responsibility is to find someone who is. Protecting your business is about securing the right leadership, not protecting feelings.
3. Embrace Outside Perspectives
As a founder, your emotional connection to the business can cloud your judgment. The closer you are to a problem, the harder it is to see the solution.
Smart founders seek outside perspectives — consultants, mentors, or trusted advisors — to challenge their thinking, spot blind spots, and provide unbiased solutions. Seeking help isn’t weakness — it’s leadership.
4. Build a Results-Driven Culture
A company’s culture isn’t defined by slogans — it’s defined by who gets rewarded.
Build a culture where:
✅ Promotions are based on performance — not family ties.
✅ Underperformance is addressed — no exceptions.
✅ Strong employees — family or not — have clear paths for growth.
When employees know that results drive promotions, they’ll stay motivated, perform better, and stick around longer.
5. Plan for the Future — Before It’s Too Late
Your leadership won’t last forever. Founders who fail to build a succession plan leave their businesses vulnerable to chaos.
A smart succession plan ensures your business thrives without you — whether that means promoting a family member who’s earned their role, empowering a top-performing employee, or preparing for a sale.
The Hard Truth — And the Opportunity
Your brand’s legacy isn’t your name — it’s your results.
The cigar industry is evolving. Consumers expect more, competition is fiercer, and retailers demand better partnerships. Companies that cling to outdated leadership models — where loyalty overshadows results — will struggle to survive.
But businesses that embrace meritocracy — rewarding accountability, strategy, and performance — will win.
Ask yourself: “If I walked away today, would my business survive without me?”If the answer isn’t yes, it’s time to change how you lead.
Because true leaders — the ones who build legacies that last — know when to step back, when to empower others, and when to trust that their business is strong enough to thrive without them.
Your legacy isn’t just what you’ve built — it’s what you leave behind. Build it wisely.
The Cigar Profit’s Role: Helping Brands Build Smarter Leadership Strategies
In business — especially the cigar industry — tradition is powerful, but strategy drives success. Too often, family-run businesses believe they can fix internal issues themselves. But here’s the truth: The deeper you are inside a problem, the harder it is to see the solution.
That’s where The Cigar Profit steps in.
As a consulting firm, The Cigar Profit helps cigar brands, manufacturers, and retailers identify blind spots, fix failing strategies, and implement leadership structures that work. We break through emotion and tradition to focus on one thing: results.
Here’s how The Cigar Profit addresses the leadership issues that plague family-run businesses.
1. Triage for Leadership Problems
When leadership is failing, the results always reveal the truth — and those results never lie.
Our first step is identifying the core problems causing underperformance. This includes:
✅ Identifying leadership roles filled by unqualified family members.
✅ Reviewing sales data, customer feedback, and retailer relationships to uncover gaps.
✅ Spotting overlooked employees who outperform their peers.
We don’t sugarcoat — if a family member isn’t delivering, we’ll say it. If a non-family employee deserves a shot at leadership, we’ll highlight it.
This no-nonsense approach breaks through emotional clutter — showing founders what’s working and what isn’t.
2. Building a Performance-Driven Culture
Family-run cigar businesses that succeed embrace one critical truth: Performance beats politics.
The Cigar Profit helps businesses create a results-first culture by implementing: ✅ Performance benchmarks that apply equally to family and non-family employees.
✅ Accountability systems that address underperformance — no exceptions.
✅ Leadership development plans that train family members to earn their roles.
When promotions are driven by results — not relationships — your best talent rises to the top.
3. Creating Just and Effective Succession Plans
One of the biggest threats to family-run businesses is a lack of succession planning. Founders often assume their children will seamlessly take over — without preparing them to succeed.
The Cigar Profit builds succession plans that:
✅ Identify top-performing candidates — both family and non-family.
✅ Establish performance milestones for leadership roles.
✅ Define clear roles for retiring founders to ensure smooth transitions.
With the right plan, businesses avoid power struggles and operational instability.
4. Providing Exit Strategies for Owners
In some cases, stepping away entirely is the smartest move. Whether through acquisition, merger, or strategic closure, The Cigar Profit - in collaboration with our strategic partners - helps founders exit on their terms.
5. Partnering with Proven Experts
The Cigar Profit has partnered with proven experts in Logistics, QC, Procurement, Vendor Management, Ecom, Social Media and Financial Services. These partnerships provide clients with a 360-degree business optimization approach.
The Bottom Line: Results Over Tradition
In the premium cigar industry, tradition matters — but tradition alone won’t sustain your business.
The Cigar Profit helps brands, manufacturers, and retailers stabilize leadership, manage transitions, and build businesses that thrive.
Because when your business starts to fail, customers won’t ask about your family story — they’ll ask why you didn’t see the warning signs sooner.
The Cigar Profit helps you spot those signs — and fix them — before it’s too late.
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