Big Tobacco Is Trying To Get Their Income Back

Big Tobacco is seeking to reclaim the hearts and wallets of most Americans by rebranding their image by pitching “smokeless” e-cigarettes, embracing the mantra “harm reduction,” and funding science that could turn tobacco plants into life-saving medicine.

At Reynolds American Inc., maker of Camel cigarettes and creator of the slogan “transforming tobacco” — spokesman Rob Dunham admits the strategy is “not without its challenges; there’s a lot of history to overcome.” Perhaps this is the most ambitious image makeover in corporate history. 

Reynolds American recently acquired subsidiary, Kentucky BioProcessing (KBP), emerged as a key player in developing emergency Ebola treatments used on two American missionaries. The medium to produce that medical breakthrough: tobacco plants.

“We embarked on a transformation agenda that, at its heart, is envisioning a tobacco industry that, at some point in the not-too-distant future, looks very different than the one we see today — or the one we’ve seen historically,” Dunham said.

At Reynolds American, top planks in that platform include “our commitment to reduce the harm caused by cigarette smoking,” curbing youth tobacco use, and “migrating historical cigarette smokers to other forms of tobacco that have the potential for far less risk,” Dunham said.

For RAI — and for its top competitor, Philip Morris USA — much of that migration is toward the industry’s fastest rising niche: electronic cigarettes. The battery-operated vaporizers deliver inhaled nicotine without the tar and combustion of traditional cigarettes. Some Wall Street analysts predict e-cigs alone may eclipse the traditional cigarette market within the next 10 years.

Altria’s latest products similarly reflect an evolving marketplace — during the last 50 years, cigarette consumption has been cut in half. In 2013, Altria launched its first e-cig, MarkTen, and expanded Verve, a chewable nicotine disc. Its website is sprinkled with language signaling a different approach, including a vow to “address societal expectations” and a promise to connect “adults who have decided to quit smoking with information to help them.”

“We believe that, given our deep experience in the largest categories today, we truly understand what adult tobacco consumers are looking for,” said Altria spokesman Bill Phelps. “So we’ve communicated publicly that we have a strategy to grow new income streams with innovative products that meet those adult consumer preferences.”

“Our companies are focused on developing lower-risk products that would appeal to adult tobacco consumers,” Phelps said. “And we think that’s an important opportunity under this FDA regulation.”

But after five decades of federal health warnings, heart-breaking tales from dying ex-smokers, and hefty civil penalties against cigarette makers for causing wrongful deaths, talk of “harm reduction” and “lower-risk products” has plenty of skeptics.