Tobacco is a dirty weed,
I like it.
It satisfies no normal need,
I like it.
It makes you thin, it makes you lean,
It takes the hair right off your bean.
It's the worst darn stuff I've ever seen.
I like it.
- Graham Lee Hemminger
Early History
The R.J. Reynolds Tobacco Company was founded in 1875 by Richard Joshua Reynolds, then 25 years of age, to produce chewing tobacco in the small town of Winston, North Carolina. Although Winston was tiny at the time R.J. opened his factory, it was well-positioned on the newly built railroad line and was already a production center for flue-cured tobacco leaf. Early brands produced by the company included: Brown's Mule, Golden Rain, Dixie's Delight, Yellow Rose, and Purity.
In 1881, James Buchanan "Buck" Duke entered the manufactured cigarette business while also gaining contracts with Bonsack Machine, the first company to be awarded a patent for a cigarette producing machine, to purchase the machines for 25% less than his competitors. His contracts and the machine's ability to produce 120,000 cigarettes a day allowed him to produce 744 million cigarettes in 1884 (more than the total nationally produced in 1883) and undercut all competitors. By 1889 he had become the president of the American Tobacco Company, a cartel of the five leading cigarette companies at the time. In 1900, R.J. reluctantly folded his company into the trust as well, as Duke is selling 9 out of every 10 cigarettes in the US.
In 1906, RJR introduces Prince Albert brand pipe tobacco, which goes on to inspire one of the first phone pranks, "Have you got Prince Albert in a can?" This also marks the beginning of the company's move away from chewing tobacco to smoking tobacco, and into a national market. In 1908, national advertising touted Prince Albert as "the Joy Smoke" and it enjoyed immense popularity. Aside — I recently discovered that the building I live in currently used to be the plant where Prince Albert was manufactured.
By 1911, Duke's American Tobacco Company controls 92% of the world's tobacco business. On May 29th of the same year, the trust is declared a monopoly by the US Supreme Court and in violation of the Sherman Anti-Trust Act. The leading companies to emerge after the break-up are: American Tobacco Co., R.J. Reynolds, Ligget & Myers Tobacco Company, Lorillard, and the British American Tobacco Company (BAT). R.J. Reynolds announced "Now watch me give Buck Duke hell."
The Rise to the Top
After the breakup of ATC, R.J. Reynolds received none of the cigarette market, which was still controlled by American Tobacco (37%), Ligget & Myers (28%), and Lorillard (15%). However, that was about to change.
The introduction of the Camel brand of cigarettes in 1913 is generally looked upon as the birth of the modern cigarette. In addition, the marketing campaign that accompanied the national launch was innovative for the time and extremely effective. For months before the launch, people were subjected to a massive teaser campaign using the slogan "The Camels are Coming" which built a huge amount of anticipation for the new brand. Like Prince Albert, Camels consisted of the then-unique blend of three tobaccos: piedmont Bright, a flavored and sweetened burley from Kentucky and ten percent Turkish leaf. This blend would come to be called "the American blend."
Camels soon were propelled to the top of the national market, capturing 33% by 1917 and 45% by 1923 behind ad slogans like "I'd Walk a Mile for a Camel." American Tobacco releases their Lucky Strike brand in 1915 to compete with Camel. Around the same time, R.J. accuses American Tobacco of purposely spreading rumours of saltpetre in RJR. tobacco and factory workers with leprosy and syphilis. Supposedly two agents would enter streetcars and hold loud conversations across the car about these rumours before exiting to repeat again in the next car. $500 reward notices were posted for information.
R.J. Reynolds benefited greatly from America's entry into World War I, as cigarette rations were determined by market share and they led the market, ensuring that a huge number of soldiers came back addicted to cigarettes and fond of Camels. R.J. would not live to see the end of the war and the ensuing success of his company though, he died of pancreatic cancer July 29th, 1918 in Winston-Salem. The company and the town of Winston-Salem continued to grow through the twenties, and on April 27th, 1929 the RJ Reynolds Building was opened in downtown, becoming the first skyscraper to be built south of Baltimore. The building was designed by Shreve & Lamb, who would go on to design the Empire State Building.
By 1930, American Tobacco's Lucky Strikes were back on top of the national market, partially because of heavy targeting of women in their ads, which Phillip Morris and RJR also participated in. Between 1925 and 1935, the number of adolescent female smokers tripled. The most notorious female smoker of the time was Bonnie Parker of Bonnie & Clyde, who loved Camels and supposedly toured the Reynolds factory some time in the early 30's. The market lead would shift back and forth between ATC and RJR throughout the 30's. Meanwhile the depression made room for smaller, discount brands to establish footholds. By 1940, Camels controlled 24% of the market, while Lucky Strikes were right behind them at nearly 23%.
R.J. Reynolds were always aggressive and innovate in advertising their products, and in 1941 they erected a billboard in Times Square that would become a New York fixture for 25 years. The Camel Smoke Ring billboard, on the side of the Hotel Claridge at the southeast corner of Times Square at Broadway and West 44th Street, featured the slogan "I'd Walk a Mile for a Camel" and a man who blew giant smoke rings every four seconds. The smoke rings were chosen because outdoor lighting had been banned because of World War II's blackout measures. The billboard would continue to puff away until 1966, giving the man time to blow ~1,972,350,000 smoke rings!
During the 40's, there was an increase of interest in the effects of smoking and the health risks that were involved (thanks in large part to the efforts of George Seldes), which were becoming increasingly common. By 1949, close to 50% of adult Americans smoked and cases of lung cancer had grown five times faster than any other cancer since 1938, and had become the second most common form of cancer, behind stomach cancer. The cigarette companies countered with an increasing number of ads featuring doctors and targeting the "medical benefits" of their product. RJR began their "More Doctors Smoke Camels" ad campaign in 1946, releasing a study that found that out of 113,597 doctors surveyed, more smoked Camel than any other brand. These ads would continue to be run through 1952, along with other slogans such as "Not one single case throat irritation due to smoking Camels!" Besides traditional advertising, from 1949 till 1956 RJR sponsored a nightly news program named "Camel News Caravan" on NBC.
Before the Fall
The 1950's began with important studies linking smoking and lung cancer for the first time, which the tobacco companies started to take seriously. In 1953, top executives of American Tobacco, Phillip Morris, Benson & Hedges, and U.S. Tobacco meet at the Plaza Hotel in New York to find a way to deal with the scientific data about the health hazards of cigarettes. This meeting lead to the tobacco companies publishing ads disputing the evidence that smoking causes lung cancer. This also marked the rise of the filter tip and the dubious protection it afforded (including Lorillard's Kent Micronite filter, made of asbestos).
In 1953, R.J. Reynolds was the target of the first tobacco lawsuit, as Eva Cooper sued them for the death of her husband, Joesph Cooper, from lung cancer. According to the suit, he had believed, "to his detriment," RJR's advertising about the healthiness of smoking Camels. The case was dismissed in 1956.
In 1954, R.J. Reynolds introduces the first national filter tip brand, Winston, but touts the improved taste and not any health benefits. This same year, the Marlboro Cowboy was created for Phillip Morris, starting a juggernaut which would soon take over Camels market lead. At the time of his creation, Marlboro had only one quarter of 1% of the American market. RJR soon also launched their menthol brand of filter tips, Salem. By 1966, Winston had become the top-selling cigarette in the US, while Salem was the fourth.
Junior Johnson suggests to RJR that instead of sponsoring a car, they could sponsor everything and the Winston Cup is born in 1969 and would become an important way for RJR to circumvent the TV advertising laws enacted in 1971. They would also go on to sponsor NASCAR's Grand National Division. The company would continue to sponsor the Winston Cup for the next 32 years, until NASCAR dropped them to sign a new 10 year agreement with Nextel, which started in 2004.
In 1970, Winston was still the number 1 brand in the world and Salem was the number 4 brand, selling 81.86 and 44.1 billion units respectively. Winston's reign would last until 1975, when Marlboro took the lead for good. Camel had dropped off the top 5 list as filtered cigarettes steadily increased their market shares. The iconic and highly controversial cartoon Joe Camel was introduced in 1974, on a poster in France. The year before, an internal memo had been circulated by RJR senior scientist Frank Colby, which recommended the company "develop a new RJR youth-appeal brand." Joe would not debut in the US until 1987, where he would be used to celebrate the 75th anniversary of Camel cigarettes.
The Decline
R.J. Reynolds lost their spot as the number one US tobacco company in sales, which they had held since 1958, to Phillip Morris in 1983. They also began diversifying their holdings, acquiring Nabisco Brands in 1985 for $4.9 billion and renaming the company RJR/Nabisco. In 1986, they opened the Tobaccoville plant outside of Winston-Salem, the largest cigarette manufacturing plant in the world at the time.
The same year, Patrick Reynolds, the grandson of R.J. Reynolds, speaks out against tobacco at a House Congressional meeting. He advocates a complete ban on tobacco advertising and recounted his memories of his father's death. R.J. Reynolds Jr. had died from emphysema. By 1989, RJR was already experimenting with their Premier brand of smokeless cigarettes, but abandoned the brand the same year after poor sales in test markets. Other failed marketing attempts included the "Uptown" brand, which was targeted at the black market and was canceled after black civic and religious leaders denounced it.
By 1990, Winston was still the 2nd most popular brand in the world, but it was outsold nearly 3 to 1 by Marlboro. Camel is still not in the top 5, but by 1991 a study is published that 91% of 6 year olds could match Joe Camel to his product, a recognition level as high as Mickey Mouse's. Another study finds that Camel's share of the under-18 market had risen from 0.5% to 32.8% in the four years since the US launch of the Joe Camel campaign. The campaign would continue running until 1997, however.
RJR sold its international tobacco arm to Japan Tobacco for $7.8 billion in 1999, making JT the world's third largest tobacco group. Other cutbacks were announced in 2003, as 2600 hundred jobs were eliminated and the company began focusing on the Camel and Salem brands, dropping Winston and Doral to selective marketing status. The same year, RJR announced its plan to merge with BAT's Brown & Williamson, a merger that has only recently been completed. The new company will continue to be known as R.J. Reynolds Tobacco Company and will continue to focus on the Camel and Salem brands.
2003 National Sales Rankings:
#3 - Camel - 6.32%
#4 - Doral - 5.54%
#7 - Winston - 4.49%
#9 - Salem - 2.54%
References: (accessed as of 2/16/2004)
http://www.rjrt.com/
http://www.tobacco.org/
http://www.tobaccodocuments.org/
http://www.agr.state.nc.us/stats/history/history.htm