The History and Necessary Evolution of Tobacco Companies in America

The first instances of tobacco use dates back to 1 C.E. During this time, Native Americans primarily used it for religious practices and medicinal purposes. In 1492, when Christopher Columbus accidentally landed in the New World, Western culture was introduced to the highly addictive plant. Within a little over 100-years (1600’s C.E.), tobacco had become so popular that it was commonly used as currency. Backing up this point, even during the American Revolutionary War, tobacco served as collateral to pay back America’s debts to France. Already, tobacco was becoming a crucial good in the establishment of the United States.

Nicotine in its pure form was discovered in 1826, and shortly after this discovery, nicotine was labeled as a dangerous poison. Despite this finding, the adverse affects of tobacco use were not widely known by the public at this time. In the 1900’s smoking tobacco became the most common ways for people to use the plant. In 1901 the global fiscal sales of smoking tobacco was 9.5 billion units (3.5 billion cigarettes and 6 billion cigars). During this time tobacco use was so prevalent 80% of men reported that they smoked at least 1 cigar every day. Throughout the first 50 years of the 20th century, slight technological modifications were made to cigarettes such as filters and menthol tipped filters, but nothing too significant.

It was not until the 1950’s when an outpour of evidence surfaced, detailing the extremely detrimental effects smoking has on the body. By 1964, the U.S. Government releases the Surgeon General’s report on “Smoking and Health”. This report allows the government to regulate the advertisement and sales of cigarettes. Within four decades after the release of this report, cigarette ads on television are banned, health warnings on cigarette packs appear, Surgeon General reports on health consequences of using tobacco for women and the effects of second hand smoke, multiple lawsuits are filed against the tobacco industry, smoking becomes politically incorrect, congress bans smoking on domestic flights, and tobacco companies begin marketing heavily in areas outside of the U.S. Due to all of the anti-cigarette lobbying, cigarette companies experienced a 10.3% drop in profits in 1999, because of a a $206 billion dollar master settlement involving 46 states. Later in 2009, this trend continued with another 10% drop in profits.

(http://g.foolcdn.com/editorial/images/97458/best-electronic-cigarette_large.jpg)

With the use tobacco products dropping, CEOs of tobacco companies are forced to find more marketable products to introduce to consumers. The technological boom over the past decade has bred a new market for nicotine intake, Electronic cigarettes (E-cigs, above). E-cigs were introduced into the market in 2007, so little is known about their long-term affects. Since 2009, the market for E-cigs has exploded from a $2 million dollar a year industry to a $722 million dollar a year industry, according to 2013 sales. Thinking they would hop on the E-cig bandwagon, Big Tobacco (a term lumping tobacco giants: Altria (Marlboro, Mark Ten), RJR (Camel, Vuse) and Lorillard (Newport, Blu)) have been producing disposable E-cigs, commonly sold at convenience stores. While U.S. E-Cig sales have been rapidly growing in the past few years, in the second half of this year, Big Tobacco has seen their E-cig sales drop by 23% (88 million dollars). Why have their sales dropped? The answer is a newer and fast growing substitute for E-cigs called vaporizers. Vaporizers offer a much longer battery life compared to E-cigs, are able to be easily refilled with nicotine “juice” (as opposed to E-cigs where one must buy cartridges made by the Big Tobacco companies), and in the long run are much cheaper than disposable E-cigs. According to the Smoke-Free Alternative Trade Association, the number of vape shops has tripled in the past year to 35,000 across the country. As of now no one can predict the affect vaporizers will have on the sales of E-cigs, but it is something to definitely keep on the lookout for.

(Wall Street Journal)

It is very interesting to see how extremely large corporations, vital in the establishment of our country must change their business to supply the ever-changing demand of consumers. The situation Big Tobacco is in is especially intriguing because it is an example of a company being forced produce its own substitutes in order to replace their original out-of-date products.  I personally believe the Big Tobacco companies will either leave the market, or they will lobby for taxes on vaping that only they can afford.  If the second scenario plays out, the growing private vaping companies will be forced out of the market, and Big Tobacco will ultimately have a joint-monopoly on nicotine vaping. However, this is all speculation, now it looks like we must take a step back and watch what happens.

Works Cited

Borio, Gene. Tobacco Timeline: The Twentieth Century-1900-1949–The Rise of the Cigarette. Tobacco.org, 1993, Online. http://archive.tobacco.org/resources/history/tobacco_history20-1.html

Esterl, Mike. Big Tobacco’s E-Cigarette Push Gets a Reality Check. Washington Street Journal, Aug. 26th, 2014. Online. http://online.wsj.com/articles/big-tobaccos-e-cig-push-gets-a-reality-check-1409078319?KEYWORDS=vaping

Keck, Kristi. Big Tobacco: A History of its Decline. CNN, June 19th, 2009. Online. http://www.cnn.com/2009/POLITICS/06/19/tobacco.decline/index.html?eref=ib_us

Randall, Vernellia. The History of Tobacco. University of Dayton, 1991. Online. http://academic.udayton.edu/health/syllabi/tobacco/history.htm#begin

Advertisements

2 thoughts on “The History and Necessary Evolution of Tobacco Companies in America

  1. I find it so interesting the power big business has on not just our economy, but our politics. I wouldn’t be surprised to see these big tobacco companies lobbying for higher taxes and succeeding, just as you said. I was surprised to see your statistic stating that after all the health information slandering tobacco came out, their was only a 10.3% drop. Granted, that 10.3% represents millions- if not billions of dollars. The power of addiction ceases to amaze me. Both my great-grandparents were heavy smokers and stopped as soon as this information was released but still eventually died of lung cancer. I’m interested to see the long term of effects of vaping and ecigs and what else our new technology will create.

    Like

  2. johnsona2014 says:

    This is a very eye-opening article, especially to one hearing about the origins of tobacco for the first time. What is intriguing to me is why the big tobacco companies began putting nicotine in their products to start with. My guess would have to be that they wanted it in there to cause consumers to develop a physical addiction to their products. My theory of the motives behind the actions of the big tobacco companies today has a lot to do with nicotine’s involvement. I would hypothesize that they are making substitutes for their own products in order to keep selling products that have nicotine in them. By adding nicotine into their tobacco in the 1800s and 1900s, they created the demand for nicotine today. Now they are trying to create “healthier” products that people will feel good about using, in order to continue to make money off of the demand for nicotine that they created in the past. Well played Big Tobacco.

    Like

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s