Tobacco Products

INDUSTRIAL CODES

NAICS: 31-2210 Tobacco Stemming & Redrying, 31-2221 Cigarette Manufacturing, 31-2229 Other Tobacco Product Manufacturing

SIC: 2111 Cigarette Manufacturing, 2131 Other Tobacco Product Manufacturing, 2141 Tobacco Stemming and Redrying

NAICS-Based Product Codes: 31-122101 through 31-2210100, 31-22104 through 31-22104131, 31-22210 through 31-22210141, 31-22291 through 31-22291131, 31-22294 through 31-22294241, and 31-22297 through 31-22297100

PRODUCT OVERVIEW

Historical Perspectives

The relationship between human beings and tobacco has lasted for millennia. Native to the New World, tobacco may have first been cultivated in South America as early as 400 BC. Soon thereafter it spread to many other parts of the New World. Two sailors Columbus sent ashore in 1492 returned with reports of seeing people with "smoking heads," possibly the earliest written record of cigar use. Columbus returned with tobacco seeds. The first tobacco plants were brought to Europe in 1558 by the Spanish physician Francisco Fernandes. Fernandes accepted the Native American belief that the smoke from its burning leaves had medicinal properties and did what he could to promote that notion.

Tobacco entered American history in Jamestown, the Virginia colony established in 1607 and named after the English settlers' king. By 1609 all but thirty-eight of the 105 originally landing there were dead or had otherwise departed. The formerly disgraced John Smith chose this time to take charge of the survivors. Granting himself the rank of captain, he began issuing regulations, directing a rehousing project, and generally telling everyone else what to do.

One of Smith's plans involved developing a cash crop that would keep the king from recalling the colony; here he was helped by John Rolfe. Remembered chiefly as the husband of Pocahontas, Rolfe counted tobacco among his wedding presents. The colonists discovered that this plant grew quickly in the marshy ground. Sent to England as a possible competitor to the well-established Spanish tobacco, it soon aroused controversy. Promoters argued that tobacco created a relaxed, focused mind and could treat various ailments. Opponents included author Samuel Johnson who, in his pamphlet "Counterblast to Tobacco," referred to the product as the scurvy weed.

Back in Jamestown the farmers discovered that curing tobacco in smokehouses, rather than on the ground, much improved its taste. After being graded by hand it soon overtook the Spanish brand in a popularity that continues to the present. During World War II, when ships crossing the Atlantic stored necessities in their lowest decks, Winston Churchill was unable to convince his countrymen that Turkish tobacco was superior in every way, and many a British ship sailed home full of Virginia leaf.

In the eighteenth century, tobacco became coveted enough to be used to pay wages, taxes, and debts. In fact it was the greatest single source of wealth in Virginia, Maryland, and North Carolina until cotton assumed the agricultural throne in 1803.

Most of this wealth was generated by the presence of a huge international market. In 1614 London alone had 7,000 tobacco shops. In 1617 Virginia shipped 20,000 pounds of the product to England; by 1628, this number increased to 500,000 pounds and, in 1638, 1.4 million pounds. By 1771 England and Scotland were collectively importing approximately 102 million pounds of tobacco from the Chesapeake colonies. More than 150 years later, 590 million pounds of tobacco were shipped overseas from the United States, half of this tonnage still passing through the ports of Virginia.

In the early part of the nineteenth century tobacco began to lose its place as the premier export to the Old World but more of it was consumed at home. Farmers and other consumers took to the pipe along with their chewing habits. Snuff, powdered tobacco often combined with small amounts of opium, became increasingly associated with British dandyism; pipe smoking became the new Americans' manly mode of tobacco consumption.

The quality of most tobacco during the antebellum period was poor compared with today's product. New England fields produced a harsh, narrow leaf called shoe-string. The South grew a dark, heavy shipping leaf that was notably different from the light, sweet, bright variety of tobacco raised today. Quality improvements began in 1864 with White Burley, a strain remarkable for its capacity to absorb sugar and flavoring. Burley was first widely grown in Ohio although it has become predominantly a product of Kentucky and Tennessee. Burley revolutionized smoking and the chewing industry after the Civil War and had an equally strong impact on the cigarette industry during World War I.

The burgeoning industry continued to search for superior tobacco products abroad, primarily focused on Cuba and Mexico. A large part of this focus was due to the popularity of Cuban cigars in America. Cigar imports from the Antilles reached the 4 million mark by 1811. Samuel Gompers, founder of the American Federation of Labor, began his career as a cigar-maker. A booming cigar industry sprang up in Havana in the early nineteenth century and remains strong in the early twenty-first century.

The cigar achieved prominence as a symbol of elevated social status during the decades after the Civil War. Also during this time, modern cigarettes began to appear. All cigarettes were initially roll-your-own; not until 1866 were tailored cigarettes produced in America and England. These were also hand-rolled and were larger than the cigarettes common at the beginning of the twenty-first century. They were usually made from Turkish tobacco grown in Greece, Bulgaria, and Turkey. New York, with a preponderance of immigrants and a large pool of inexpensive labor, served as a central site of cigarette production and mass consumption.

By the first decade of the twenty-first century, more than five decades of studies had documented the wide range of deadly diseases caused by tobacco use; yet smoking remained on the rise, worldwide, and especially among those under 25. Available to those of legal age as cigarettes, the cheapest and most popular form; chewing tobacco, commonly associated with American rugged individualism; cigars, no longer the sole territory of the wealthy; and pipe tobacco, its premium brands blended with as much care as high-end liquors, tobacco remains invariably associated with the freedom and disposable income belonging to adulthood. The seventeenth century French poet Molière maintained, "He who lives without tobacco is not worthy to live."

Modern Times

Tobacco use was regarded as a symbol of high social status and sophistication for centuries, and movies of the early twentieth century popularized the image that smoking was appropriate behavior for every adult in almost all situations and environments. Even the repressive Production Code developed by the Hays Office in 1930 to regulate the motion picture industry permitted showing two cigarettes smoldering in an ashtray to symbolize a sexual encounter. Tobacco makers gave away their product to members of the U.S. armed forces throughout the Vietnam War, ensuring that Baby Boomers surviving combat would remain good customers. As far as the tobacco industry was concerned, the market for their products was every living adult.

State governments limit tobacco use by law to the age of responsible adulthood, although the onset of adulthood is defined variously within the United States and in other countries. In Germany persons aged sixteen can smoke but must wait until nineteen if they live in Japan. The United Kingdom, including England, Scotland, and Wales, has no minimum age for smoking. Most U.S. states follow the federal limit restricting sales to those eighteen or over; in Alaska, Utah, and Alabama, the limit is nineteen. There have been sporadic attempts to raise the smoking age in some states to twenty-one but none, as of early 2007, have been successful.

In 1964 the U.S. Surgeon General issued a report linking smoking with lung cancer and heart disease. The next year Congress promulgated the Cigarette Advertising and Labeling Act, which stipulated health warnings must be placed on each cigarette package. In 1971 cigarette advertisements on radio and television were banned. Predictably, the rate of smoking in the United States began to drop.

During the 1980s lower-priced discount cigarettes began to enter the market enabling smaller cigarette manufacturers to thrive for a short time until the industry's preeminent leaders dropped their prices to capture the low-end market. However, reams of medical reports delineating the hazardous effects of smoking had taken a firm hold on the attention of the American populace, transforming anti-tobacco factions into a powerful national movement. Cigarette taxation doubled in 1983 and continued to rise, increasing the popularity of lower-priced cigarettes. Consequently, cigarette manufacturers diversified their operations while exploring international business opportunities.

The 1990s marked the lowest ebb in the tobacco industry's fortunes: a decade filled with lawsuits, legal rulings against tobacco products, diminishing political influence, restrictions on smoking in public areas, and increasing taxation. In a move many in the industry regarded as cunning, so-called Big Tobacco made Congress an offer promoted as unwise to refuse: a blanket amount settling all current litigation and preventing all such actions in the future. In November 1998 both sides agreed on a number. Ultimately, forty-six states and the country's five largest cigarette makers were party to a deal that would pay states $206 billion over twenty-five years, funded by new cigarette taxes.

Various allegations of price-fixing and other woes continued to nip at the industry's heels as the twenty-first century arrived; however, tobacco makers continue not only to survive but to thrive. One marketing approach is developing new products for special niches. By altering the tobacco-curing process, manufacturers are able to reduce or even eliminate nitrosamines, chemicals some studies have identified as key carcinogens in tobacco products. Low-nitrosamine tobacco could be used in a special line of products for health-conscious smokers or could become a new standard in cigarette manufacturing.

Product Array

Although cigarettes represent the overwhelmingly dominant form in which the tobacco-using public consumes tobacco, nicotine, the active ingredient, also reaches customers in three others forms: cigars, smoking tobacco, and chewing tobacco. Cigars range in size from small cigarillos—similar in size to cigarettes—to thicker and longer cigars. Low-end cigars are wrapped in colored paper, like cigarettes, whereas in quality cigars the outer wrapper is fashioned of tobacco leaf. Smoking tobacco is a shredded product manufactured for consumption in pipes although the product may also be used for rolling cigarettes by hand using purchased cigarette paper. Smokeless tobacco comes in two forms: chewing tobacco is wadded and specially treated tobacco leaf intended for use by placing a portion of the wad into the mouth, usually held in the cheek; snuff comes in moist and dry forms. Dry snuff, a very small market, is sucked into the nostrils. Moist snuff is placed in the mouth, usually between the lower lip and the gums. Some moist snuff is sold in tiny pouches which retain the tobacco but release the nicotine into the saliva. People using chewing tobacco or snuff get their nicotine by absorbing it into the blood stream through mucous membranes.

MARKET

Farming Sector

This industry rests on the production of tobacco farmers, the majority of whom are small producers. According to the U.S. Department of Agriculture (USDA), the farm value of U.S. tobacco crops reached $1.9 billion in 2001. The links between tobacco and several serious diseases have posed serious threats to the industry. Into the early 2000s, criminal and civil lawsuits against cigarette manufacturers focused public attention on the role of the tobacco industry in promoting health-threatening products. Increased exports of foreign-grown tobacco, competing with U.S. exports, also affected American growers. Changes in federal regulations and in harvesting and processing techniques, however, have somewhat lessened the uncertain future of tobacco farming. Despite difficulties, tobacco remains relatively lucrative for small farmers.

Tobacco is the most profitable crop in the southeastern region of the United States generating relatively high prices per acre. In Kentucky, for example, tobacco comprised only 1 percent of farmland in 1992, but generated 40 percent of net farm returns. In 1994 each acre of tobacco grown in the United States for domestic use generated more than $43,000 in state and federal excise taxes at the retail level. Estimates suggest that, for farmers, one acre of tobacco can net between $1,200 and $1,500 compared to approximately $75 per acre for corn or soybeans. For this reason, many tobacco farmers continue to resist pressure to shift to other crops although demand for tobacco has declined significantly and continued price supports are far from certain.

Tobacco Manufacturing

Tobacco manufacturing is a two-tiered industry in which the first tier is tobacco stemming and redrying. Participants in this industry buy leaf from farmers, remove the stem, sort the leaf into grades, dry the product for final use in manufacturing, and supply the second tier, the product manufacturers. The U.S. Bureau of the Census divides second-tier producers into two major industries: (1) cigarettes and (2) other tobacco manufacturing.

The tobacco industry, including both tiers and the three industries that make them up, shipped product valued at $42.1 billion in 2005, up from a level of $35.4 billion in 1997. Tobacco shipments increased nearly 19 percent in this period and grew at an annual rate of 2.2 percent; population in this period increased at 1.4 percent and the nondurable goods component of the U.S. economy grew at 3.9 percent. Cigarettes, the dominant product—accounting for 87 percent of the industry and 89 percent of final product sales—grew from a level of $28.3 to $36.9 billion, a growth rate of 3.4 percent yearly, thus almost matching nondurable goods. Other tobacco manufacturing also experienced growth at the annual rate of 1.8 percent. Tobacco stemming and drying, however, declined at a very high rate, losing 17 percent of its shipments every year. Figure 210 presents the industry as a whole and its sectors by shipments for this period.

In 2002 cigarette exports accounted for 4.3 percent of domestic shipments, in 2005 for 3.3 percent. Imports of cigarettes accounted for 1 percent of apparent domestic consumption in 2002 and for 0.6 percent in 2005. In this more recent period (2002–2005), exports of unmanufactured tobacco (raw leaf) have been higher than imports. In 2002, for instance, $1.1 billion in leaf was exported, $701 million imported. In 2005 there were $990 in exports from the United States and $750 million imported to the country. The United States is thus a net exporter of leaf tobacco as well as cigarettes. In light of the dismal performance of the tobacco stemming and drying industry, taken in light of growing shipments in cigarettes, the conclusion is that market growth is produced by price increases rather than quantitative consumption of product. Limited Census Bureau reporting on unit shipments for some categories of cigarettes for 1997 and 2002 support this conclusion: fewer cigarettes were shipped at much higher prices per unit.

Figure 211 shows final products of the industry for 2005. Shown in such graphic form, the dominance of cigarettes becomes viscerally accessible. Within the Other Tobacco Manufacturing category, shipments of cigars and smoking tobacco have been declining whereas chewing tobacco and snuff have experienced growth matching that of cigarettes.

KEY PRODUCERS/MANUFACTURERS

Universal Corporation

Headquartered in Richmond, Virginia, Universal was the leading participant in tobacco stemming and drying industry in 2007. The company had sales in its fiscal year ending March 2007 of $2.0 billion. A close second was Alliance One International, Inc., located in Morrisville, North Carolina, formed in 2005 by the merger of Dimon, Inc. and Standard Commercial Corporation, the other leading companies in the industry. Alliance One had sales in 2006 of $1.98 billion.

Altria Group, Inc.

Based in Greenwich, Connecticut, Altria is the nation's largest tobacco company. In addition to tobacco, which represented 66 percent of the company's 2006 revenues of $101.4 billion, Altria was also involved in food products and financial services. Altria was formed in 1985 as the new parent company for Philip Morris & Company. Philip Morris itself began in London in 1847 as a tobacco store formed by Philip Morris, the individual. The American corporation, now referred to as Philip Morris USA, was incorporated in New York in 1902. Philip Morris rose to its current rank when it introduced Marlboro in 1955. By 1973 the brand was the second most popular in the United States, second only to RJ Reynold's Winston brand. Three years later, Marlboro eclipsed Winston, and Philip Morris became the second largest seller of tobacco in the world. As Marlboro became the nation's preferred cigarette, Philip Morris branched into the production of low-tar cigarettes with its Merit brand, then intensified its efforts toward overseas expansion. As a result of these two marketing strategies plus the growing popularity of Marlboro cigarettes, Philip Morris surpassed RJR in 1983 to become the world's largest cigarette manufacturer. In the 1990s the company consolidated its lead with a market share just shy of 50 percent during the late 1990s.

Reynolds American Inc.

Based in Winston-Salem, North Carolina, this company was incorporated in 1879 as R.J. Reynolds Tobacco Company. The company's founder, Richard Joshua Reynolds, succeeded in part through his association with the American Tobacco Co. during the lucrative years of the tobacco industry when combinations and trusts were common. Operating as a subsidiary of American Tobacco from 1899 until American Tobacco was dissolved in 1911 in a governmental trust-busting initiative, Reynolds' thrived as a producer of chewing and smoking tobacco under the respective Schnapps and Prince Albert brands. The company did not manufacture cigarettes until 1913—shortly after Reynolds had resumed control of the company—but once it did, RJR's success came quickly with its widely popular Camel brand of cigarettes. For the next twenty years, the company's success was primarily based on the popularity of Camel cigarettes, but by the late 1930s and through the 1940s, the company's growth began to slow due to labor problems, antitrust suits, and the resounding product flop of Cavalier cigarettes. By the 1950s, however, Reynolds began to effect a turnaround by selling its new filter-tip Winston cigarettes; these first appeared in 1954. Two years later, the company introduced its Salem brand, the industry's first king-size filter-tipped menthol cigarette. Combined with the continuing success of the Camel and Winston brands, Salem elevated the company's standing in the market above all others. The company merged with Brown & William in 2004. The company's sales in 2006 were $8.5 billion.

The leading producer of smokeless tobacco in the United States in the latter half of the first decade of the twenty-first century was UST Inc., like Altria headquartered in Greenwich, Connecticut. The company had sales revenues in 2006 of $1.85 billion of which $1.5 billion was smokeless tobacco. UST is also in the wine business. With its Skoal and Copenhagen brands, the company has upward of an 80 percent share of the moist snuff category. Second ranked in this segment is Conwood Sales Co. L.P. with its Kodiak brand. Several others, including Swedish Match North America Inc. (formerly Pinkerton Tobacco Co.), National Tobacco, Swisher, and Brown and Williamson, also compete for a small percent of this industry.

MATERIALS & SUPPLY CHAIN LOGISTICS

The major tobacco growing states are North Carolina, Kentucky, and Tennessee. With South Carolina, Virginia, and Georgia, they produce more than 90 percent of the tobacco grown in the United States. In all, seventeen states grow appreciable acreage of tobacco. Establishments from North Carolina and other states compete with each other at tobacco auctions where major tobacco companies purchase their crops.

Flue-cured tobacco is produced in the southeastern Coastal Plain and the Piedmont region from Virginia to Florida. This variety makes up approximately 95 percent of the tobacco used in American cigarettes. Flue-cured is also the kind of tobacco most used in exported products. Fire-cured, or Class 2, tobacco is produced in central and western Virginia, Tennessee, and Kentucky. This tobacco has broad, dark green leaves, which are heavily drooping and gummy to the touch. After curing they are light to dark brown and strong in flavor. Class 2 tobacco is principally used in snuff in the United States, but it is also used for cigar manufacturing and chewing tobacco in other countries. All other American tobacco is air-cured and is principally used in cigars, except for the light air-cured and Maryland types. Burley is currently grown in Kentucky and Tennessee and to a lesser extent in Ohio, Indiana, Virginia, West Virginia, and North Carolina. Major cigar tobacco districts include New England, Pennsylvania, Ohio, Wisconsin, Georgia, and Florida.

Before tobacco is suitable for consumption, it must be fermented and aged, which brings the tobacco leaves to their peak color and aroma and eliminates harsh or bitter taste. Finally, most tobacco products in the United States have various amounts of sweeteners, flavorings, or humectants added to increase or modify their natural flavor and aroma. Humectants are substances promoting moisture retention and can include sorbitol, glycerol, sugars, and honey.

Although tobacco has historically been a labor-intensive crop, averaging as much as 300 hours of labor per acre, new techniques for producing, harvesting, and curing have reduced labor and permitted increased acreage per farm. Flue-cured tobacco, once tied by hand, is now marketed as loose leaf. The introduction of mechanical harvesters also reduced labor, as did the shift from sheets to bales. Successful growth of tobacco also requires a good supply of well-developed seedlings for transplanting. On American farms these are usually produced in a cold frame covered with cheesecloth, plastic, or glass. Tobacco seeds are sprinkled on top of the soil and then tamped firmly into the ground. A high state of fertility and adequate soil moisture must be maintained throughout the growing season to ensure vigorous production. Tobacco crops are also regularly attacked by fungi, bacteria, viruses, and a number of other harmful parasites that must be fought by raising disease-resistant crops. Without such varieties of tobacco, the industry would not be viable in certain areas of the United States.

DISTRIBUTION CHANNEL

Harvested tobacco leaf moves from farms to the tobacco stemming and drying industry, and from there to manufacturers. Producers of tobacco goods distribute their products through wholesale distributors who in turn sell to retailers. Product shipments in 2005 of $45.1 billion (thus less than industry shipments which include tobacco stemming and drying) turned into a wholesale volume of $89.4 billion, nearly a 100 percent markup. Tracing the product beyond the wholesale level is not possible because Census Bureau reporting is not detailed enough at the retail level. Specialized tobacconists, however, represent a fraction of total sales, in 2005 an estimated $7.0 billion. The rest of the product reached the ultimate consumer through drug stores, convenience stores, grocery stores and chains, filling stations, vending machines, and mass merchandisers. Data for the wholesale sector and for tobacco stores represent estimates provided in Manufacturing and Distribution USA.

KEY USERS

Users of tobacco may be labeled as habitual, occasional, and unwilling. Those who consume tobacco products daily are said to be addicted to nicotine. Most such individuals find it difficult and sometimes wrenchingly painful to kick the habit, as the popular phrase has it. Those committed to doing so frequently require help from the medical profession or other groups organized to help them. Occasional users smoke a cigar or a cigarette at infrequent intervals, sometimes to celebrate an occasion. Such users evidently do not react to nicotine as intensely as those who become habituated. If only occasional users existed, the tobacco industry would disappear—greatly pleasing the third category, the unwilling. These are individuals who must endure tobacco smoke because people around them use the product. They are exposed to secondhand smoke with limited means to protect themselves.

ADJACENT MARKETS

Smoking paraphernalia represent immediately adjacent markets. Cigarette holders, once very popular, have largely disappeared—filters usually protecting smokers from stray bits of tobacco that get into the mouth. Cigarette cases have gradually slipped from the category of active use into products sold in antique shops or at flea markets. Pipes go with smoking tobacco—a category of objects people also collected as curiosities. Lighters are an adjacent product ranging from throwaway devices bought in multiples or mechanical devices that range from utilitarian objects to the rank of jewelry. Ashtrays are the necessary receptacle for smoking waste. In regions where chewing tobacco is used indoors, spittoons are a functional equivalent. Those protecting themselves from second handsmoke purchase special fans and air fresheners. Those who wish to free themselves of tobacco craving use nicotine gum, nicotine patches, and pay for medical or other services to help them change their habits.

RESEARCH & DEVELOPMENT

Since the beginnings of the modern cigarette in the late nineteenth century, public health officials have attributed a variety of toxic effects to smoking. At the same time, manufacturers, scientists, entrepreneurs, and public health leaders have, at various points, promoted or recommended product changes that would allegedly make cigarette smoking less harmful, though not entirely harmless.

In the 1880s tobacco smoke was known to contain nicotine, which both physicians and the public widely believed to be poisonous. Entrepreneurs developed novel products that allegedly blocked nicotine and other constituents, such as Dr. Scott's Electric Cigarettes, containing a cotton filter which, the manufacturer claimed, "strains and eliminates the injurious qualities from the smoke" (Tate, 1999). In the 1930s and 1940s cigarette advertisements for major brands such as Lucky Strike, Chesterfield, and Camel, routinely included health-related statements and testimonials from physicians. For example, Camel cigarette ads promised "28 percent less nicotine," while Philip Morris promised reduced "throat irritation." "Not a cough in a carload" quickly became a popular expression, an example of marketing skill triumphing over observation and personal experience.

As studies linking cigarette smoking and lung cancer became widely publicized in the early 1950s, tobacco manufacturers predicted there would be more consumer demand for cigarettes with filter tips, especially among health-conscious consumers. P. Lorillard launched Kent cigarettes in 1952 with its micronite filter, which contained fibers the company claimed trapped dust particles in the smoke. Kent advertisements claimed the filter removed "7 times more nicotine and tars" than other filter cigarettes and offered "the greatest health protection in cigarette history." Kent sales received a substantial boost in 1957 when Reader's Digest highlighted the brand in an article titled "Wanted—and available—filter tips that really filter." The article reported that Kent yielded 14 to 40 percent less tar than other leading filter brands. Kent sales shot up from 3.5 billion cigarettes in 1956 to 37.5 billion in 1958, making it the fifth most popular and fastest growing of any cigarette brand.

By 1962, 54.6 percent of all cigarettes produced in the United States had filters, compared with 1.4 percent in 1952. The landmark report of the Advisory Committee to the Surgeon General on Smoking and Health, released on January 11, 1964, concluded the hazards of cigarette smoking were substantial enough to warrant "appropriate remedial action." However, the committee concluded the available evidence was insufficient to draw any conclusions about the possible benefits of filters.

Nevertheless, epidemiological studies described in the Surgeon General's report demonstrated that there was a clear dose-response relationship between the number of cigarettes a person smoked and his or her risk of lung cancer. Additionally, animal studies showed that tobacco tar, the particles in tobacco smoke, caused tumors when painted on laboratory animals. Based on this evidence, another committee organized by the Surgeon General in 1966 concluded, "The preponderance of scientific evidence strongly suggests that the lower the 'tar' and nicotine content of cigarette smoke, the less harmful are the effects."

This argument continues, with medical research continuing to document health hazards associated with smoking and tobacco producers fending off declining sales until they can redesign or at least repackage their product. High-tech cigarette ads in the first decade of the twenty-first century are accompanied by claims that they reduce exposure to toxic ingredients in tobacco smoke or reduce secondhand smoke. Some new cigarettes employ tobacco that has been genetically modified to produce lower levels of some cancer-causing agents. Additionally, tobacco lozenges containing powdered tobacco are being marketed to smokers for situations where they cannot smoke. However, in 2001 a committee convened by the Institute of Medicine, a nongovernmental U.S. scientific organization, determined these products have not yet been evaluated sufficiently to determine whether they are less harmful.

In the first decade of the twenty-first century scientific and public health experts urge the need for government regulation of tobacco products as a crucial step toward reducing tobacco-related harm. An effective regulatory plan could provide the U.S. government with the authority to require changes in products to reduce their toxicity, to evaluate ingredients in new products as they enter the market, and to oversee advertising claims made by manufacturers about potential reduced risk products. But even if innovative tobacco products can reduce health risks for smokers in the United States and other developed countries, they are unlikely to make an impact on the rapidly expanding cigarette markets in developing countries where government oversight and public concern about the health effects of smoking are substantially weaker.

CURRENT TRENDS

Kreteks, or clove cigarettes, and bidi cigarettes were popular with some American youths as the twentieth century closed. Most clove cigarettes are manufactured in Indonesia. They have been exported into the United States since 1968 and contain approximately 40 percent ground cloves and 60 percent tobacco with added clove oil. Clove cigarettes are rolled tighter than regular cigarettes and deliver, on average, twice as much tar, nicotine, and carbon monoxide as do moderate tar-containing American cigarettes. Tars are sticky, cancer-causing substances chemically similar to road tar. Carbon monoxide reduces the blood's ability to carry oxygen.

The 2003 Monitoring the Future: Overview of Key Findings reported that 2 percent of eighth graders, 3.8 percent of tenth graders, and 6.7 percent of twelfth graders used kreteks within the year before they were surveyed for the study. These numbers have decreased for all three age groups since 2001. The findings regarding bidi cigarettes are similar. In 2003, 2 percent of eighth graders, 2.8 percent of tenth graders, and 4 percent of twelfth graders used this form of tobacco.

Bidis are small, strong-smelling, flavored, brown cigarettes, wrapped in leaves much like cigars. They are produced in India and other Southeast Asian countries and were not widely used in the United States until the mid-1990s. Bidis produce approximately three times the amount of carbon monoxide and nicotine as American cigarettes and about five times the amount of tar.

An estimated 1.1 billion adults worldwide are believed to use tobacco regularly. According to the World Health Organization (WHO), tobacco causes 4.9 million deaths per year. In May 2003, member states of WHO adopted the world's first international public health treaty for global cooperation in reducing the negative health consequences of tobacco use. The WHO Framework Convention on Tobacco Control is designed to reduce tobacco-related deaths and disease around the world.

In February 2005 the treaty came into force after being ratified by member countries. Each of the 168 countries that have signed the treaty must now pass it into law. Although the United States signed the treaty in 2004, indicating general acceptance, by spring of 2005 had not yet been sent to the Senate for ratification in favor of undergoing legal review at the State Department. The treaty has many measures, including requiring countries to impose restrictions on tobacco advertising, sponsorship, and promotion; establishing new packaging and labeling of tobacco products; establishing clean indoor air controls; and promoting taxation as a way to cut consumption and fight smuggling.

Although smoking cessation programs and products abound, the major side effect of smoking cessation is nicotine withdrawal. Short-term consequences of nicotine withdrawal may include anxiety, irritability, frustration, anger, difficulty concentrating, and restlessness. Possible long-term consequences are urges to smoke and increased appetite. Nicotine withdrawal symptoms peak in the first few days after quitting and subside during the following weeks. Improved self-esteem and an increased sense of control often accompany long-term abstinence.

With mounting social pressure against smoking, products and services to help a person quit smoking have become a growth industry. One of the most common complaints among ex-smokers is weight gain. Many reasons explain this phenomenon, but two primary reasons are how the metabolism changes when nicotine is withdrawn from the body, and the way many former smokers use food in an attempt to manage their withdrawal cravings. To combat weight gain, some ex-smokers start exercise programs.

TARGET MARKETS & SEGMENTATION

Any market sector either stays competitive or is absorbed by more vigorous enterprises. The tobacco industry has long known that a crucial element in remaining successful was capturing the attention of the young. In the 1950s self-styled juvenile delinquents rolled cigarette packs up inside one short sleeve of a T-shirt, imitating their elders who had probably picked up the practice in World War II. Since the average age of Americans fighting in Vietnam was nineteen, tobacco companies could rest easy until the 1970s brought a widespread frenzy for physical fitness, signaling a resumption of attempts to engage youthful consciousness. In other words, tobacco profits depend on the industry's ability to recruit new smokers to replace those who quit or die. Surveys show that in the United States 60 percent of smokers start by age sixteen, and 90 percent begin their smoking careers by age twenty. Few smokers begin smoking after age twenty-five. Brand loyalties are usually established during the first few years of smoking, with relatively few smokers switching brands.

Marketing to beginning smokers has created the tendency to smoke cigarette brands that are the most heavily advertised. Like other fads, cigarette brands popular with teenagers have changed over time, and with these changes have made the fortunes of the cigarette makers. Competition for the teenage smoker market remains keen as lessons of the past indicate that profitability and corporate survival depend upon the concept "get 'em while they're young."

Another fruitful attempt was to piggyback on the women's liberation movement emerging in the 1960s. If a woman was free to dress and behave as she liked, she should be able to smoke whenever and wherever she liked. In the 1960s, the American Tobacco Company's Tareyton ads featured models with eyelids that appeared to be bruised—in this case by makeup, not due to physical conflict—accompanied by the slogan, "I'd rather fight than switch." Thinner, longer cigarettes such as Virginia Slims and Eve emerged, with floral designs intended to entice the New Woman's eye stamped onto the cigarette paper. Virginia Slims began sponsoring a women's tennis championship in 1972 that has continued its popularity into the twenty-first century. Though advertising venues have become increasingly limited, the tobacco industry still addresses women, especially those in the crucial 17 to 24 age group.

RELATED ASSOCIATIONS & ORGANIZATIONS

Action on Smoking and Health, http://www.ash.org

Association of the German Smoking Tobacco Industry, http://www.pfeiferauchen.de

Freedom Organization for the Right to Enjoy Smoking Tobacco, http://www.forestonline.org

Tobacco Control Resource Center, http://www.tobacco.neu.edu

Tobacco Manufacturers Association, http://www.the-tma.org.uk

Tobacco Merchants Association, http://www.tma.org

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