Examines areas for new product development and the state of the tobacco industry. Lists current process innovations, including "on-machine ventilation devices." Cautions that pharmaceutical industry in Europe and North America may serve as competitor to the tobacco industry in "the mood control business." Addresses current delivery of nicotine to smoker, compared to that of the 1950s. Posits that "if there is a relationship between required nicotine intake and nicotine tolerance, then the nicotine entering the smokers of low delivery products is more effective on a relative basis." Suggests that the effectiveness of nicotine might be reinforced "by retarding nicotine metabolism, or by increasing the efficiency of nicotine transfer to receptors in the central nervous system, or even by conditioning the receptors themselves."
- Brown & Williamson
- Named Person
- Named Organization
- British American Tobacco Co.
- United Nations
- Department of the Environment
- Philip Morris
- North America
- Thesaurus Term
- Product Development
- Nicotine Metabolism
- Nicotine Level
- Low Yield Cigarettes
- Pharmaceutical Industry
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• Products for the late" 80's and the 90's
This paper seeks to explore new product ideas and to
identify situations where those ideas might be converted to
a co~nercial advantage.
The new product ideas have been obtained by three
CollRtion of needs already expressed
Assessment of opportunities identified by
brainstorming and other creativity technJqnes
Normative or extrapolative combi'nation of active
research areas and existing technologies.
The ideas have been evalumted against the performance of
earlier innovations and the present s~a~e of the ~obacco industry.
2. Thc Tobacco Industry
2.1 In the developed areas of the world the tobacco industry_
is in a state of advanced maturity, having reached a stable
market penetration. In some countries, the social attitudes
to smoking, the legal constraints o~ product performnnce and on
cormnunication. ~nd the econolnic recession, have caused a dall
in sales• Superficially, this is consistent with the status of
an ageing industry. However, until a real competitor Zo tobacco
emerges the total market for the products of the tobacco industry
is likely to be stable. Within the total market, individual
brands and companaes w]ll grow and decline•
2.2 In countrles az an earlier stage of economlc development.
the total industry is in a growth phase, driven by the increasbd
spending power (*~ the population.
2.3 Overall. BAT's strategic position is ~ s~rong one in tha~
mature industry, but the con~nercial position of individual
companies within BAT varies from tenable to dominant.
2.4 The next phase of the industry could be expected to be one
of pyogresslve ageang, where & modest decline in sales is Coupled
to falling profitability as c~gareltes degenerate ~o commodity
status. However. there are several factors that may acl to slow
~- or even revers[~ such a dove]o meat, among them are fresh insights ,
as to he,:, s oki. . oher smokin a.d
,~ ~ssue ~h~ arr~%0] of a da ect conpet~ior to t e in ustrv s
i~ products could Insplrc a i~urrv of lnnovatxon to flght off the ~i~
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2,5 yresh f~stghts have allowed empirical produ~Z differea~
~iation %o thrive in the processed food and %he Casmetics
markets; the smoking and hcalt~ issue provides positive
~DcouYage fo~ product re~uwena~lon, and %he Current lack o~ a
competitor g~ves time, l~ Dot ~ sp~r. to ehKnge.
2.6 Thus, there is a conflict be%wee~ the agein~ tendency of
a m~ture industry, with its emphasis on higher units, standard
products 2nd Cos~ s~v~n~s~ ~ndth~ requirements f~ rejuven~tion,
w~th ~s emp~as~ on flexibility, p~odu~ diversity, ~nd
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One o~ the major in~Qvations w~$ the developmenZ Of ~ gQod
quali~y CUt roiled ~tem, which reduaed ~bocc~ usage by 20 25~
and s~ved some i~ of ~he cost of ~ c~garette f~lllng.
S~ml]zrly, t~b~cc~ waste u~illsation pr~esse~ (PCL/PRT) can
sa~e a further 4~, whilst DIET may save 3-12~ ~d c~e~e design
op%iun~. ~sage o~ ]~bo~r h~s b~n drastically r~d~c~d by fast
high c~pzcity maahinery and ~he genera] ~ule is ~hat process
i]]novations ~uc~ ~osts.
3.4 Because o~ ~h~ high ¢os~ ~ deve]opin~ new machinery ~d
the ~ev~1 year lead ~ime be%~een ~n ide~ s~d m~l~n~ I~ ~ork,
most ~ %he ideas that will be seen in the m~rket p~ace up until
~9~8 ~re ~]re~d~ b~ing ~orked ~n. F~beT~ore, h~c~use o~
~nce~in~les ~s~o~i~ted ~ith long lead ~im~s, new products
~liring simu]%~neous in~j~r ch~n~e to ~lore th~n on~ ~r% of th~
process ~r~ unl~h~ly to be seen ~ c~m~ci~l]~' ~t~uctiv~ b~
~na~ers o~ ~e~hnic~l innov~%ions, ~l%hou~h there m~y we1~ b~
strategy of loosely-coupled ~equen~ia] innovation.
~.5 An unmis~al~able trend ~n Comm~ci~l cigarette~ h~ bee~ ~he
progressive r~t~o~ i~ %he Sy~t~y of the ~oduc~ (a~comp~nied
by an Increasing aomplexity u~chJnery %o m~ke it). P]aill
eig~re~te~ ~e m~r~ ~;ymmetzic~] thnn ~ipped; p~in ~ilters are
more symmetrical than ~ual or moulded filters; ventilation hol~
~dd ~ f~r~r ~etry~ Ther~ i~ no r~on ~D believe tlli~
t~end will ond soon, bee~e ~rc1~o (]~i~neTs ~Ii ~o~nu~
%o seek n~w ~y~ o~ ~e]e~ting old ~d n~w ¢ons~rain~ to be~ter
3.6 A~iot~er obv~ou~ trend Js tha~ t~wa~ds lo~cr Smo]~ de~v~ri~.
p~rtJcu]~%e m~t~er. The momentum of thi~ t~'~nd ~s ~l~e to
customer ~x~ectationsI to advertising and to external pressure~
discussed b~w, It c~I] b~ exp~ci~d t~ t~ke the s~l~ w~h%~
av~r~e %ow~ds or int~ ~hi~ ~'u~t~n ]~w %~r" se~men~ o~ the
~ket. B~t ~]lat ~i~? Can prod~c%s des~gnod to d~l~er !e~s
than on~ mil]igl-~n (~he microgram ~ar league) he satisfying for
a large pr~p~rt~o~ o~ ~moker~ th~ ~l]Ilwi~ tbo trend ~o aonti~!l~?
Wi]] the trend ~];Ltte~ ~t ~t ~ro~nd 5m~; or ~±ii i~ revert %0
~.7 T~l%in~ now to othe~ trends not ~i~hiu %he ~ontro~ o~ %he
~ndus~y, ~b~ prlm~ sour~ of external pre~ur~ iG ~oc~o-
politic~ in~lll~nce w~rk~ initi~!]~, on th~ sm~ki~ ~d h~]~h
~ ~ issue ~d s~bseq~en~ly, oli the ~oci~l a~cept~biii~v of ~hem
smoking habit. Re~triction~ h~iv~ bee~ place~ ~n m~i.ll~ s oke
d~liv~ry, ON ch~l~e~ t~ ~n~r~]i~s (slno~ling m~te~1~Is ~11d
~d~tIves) and OLI comrl~rci~] op~l&~ons. '£u~J*in~ th~ tide ilg~in~
s~oklng m~y be ac]Jieved ~JI'o~gl~ ul£r~-low i]~liverI, ~roduct~ a~d
~e~-d~cip]ine wJlhin %h~ industry, bu~ the irra~ona| p~r% Of
%he an~J-~moking lobby can invent ~resh ~bjeetions and, i~ ~he
d~ve~o]led w~r~d ~t leas~, there ~i]l be p~ent~ of p~op]c ~%h
~e oI~ th~i~ hand~ ~eeki~g ent~r~nnlent f]-o~l ~i~mol~n~
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3.8 A possibly more serious problem could arise from frustrated
environmentalists with the public s~rvice, L~ter this year,
the UN will be puhlishing a survey of the efforts, results and
data collected by environmental protection agenales worldwide.
The survey wlll assess the magnitude of relative costs of
ignoring environmental issues. It concludes that barriers to
progress are not lack of technical ability, but human, economic
and organisational constraints• Dr. Holdgate, Chief Saientist
at the Department of the Environment, has safd that pollution
by cigarette smoke is ten times mor~ costly than urban air
pollution in the UK. Attacking the cigarette industry is seen •
by the bureaucrats to be simpler, quicker, more co~t effective
and more beneficial to their image as the indispensible defenders
of public well being, than efforts aimed at changing publlc
attitudes and institutional behaviour. • •
3.9 TcchnologicaI trends that could dis~u~'b the e~onom~cs of
cigarette production have been discussed elsewhere*; biotechnology,
from mechanJsed or factory farming to cigarettes made of a
fermented soup, has been widely discussed; but one potential
co~ncrcial competitor has been largely ignored:-
The pharmaceutical industry in Europe and North Aineric~ is
facin~ a m~jor problen~ as patents run out, Importation or local
production of drugs to be sold at prlces related to production~
costs will not provide the profits needed to keep their drug •
innovation activities going as costs soar and opportunities •
decline. The pharmaceutical industry has the skllls, resources
and above all, the incentive to enter the mood control business
in competition with smoking. It may find the entry cost worth-¸
while, and may fund the early stages from profits on drugs for
mehtal health. Entry, If it occurs, will be slow and may be I
suitable for a joint venture.
4.1 Produc~.s, whether new or old, cannot survive unless they
s~tisly a rang~ of diverse needs. Not considered here are those
common-~o-a]] needs that are indupendent of the nature of the
product; such as avai]abi]ity, freshness, reliable quality and
freedom to choose• Iz the present paper, needs imporzan~ for
cigarettes are considel'ed under three headings:-
,,~. . (a) Needs of the customer: ranging from those of the
:~ - individual consumer to those "
:~ of the aggregates of indlvldua]
called the market
'~.~ (b) Needs of the suppller
~ ,,. ~ ,.;~/~:
(c) Needs of society both social and legal. "•7~ :~.:'~:~/~,~":~''~
Page 5: 0000082026
4.2" Both the customer and thecompetlng suppliers have an
interest in new products. For the customer, the new product
may fit better with self-image, life-style and personal taste;
for the suppliers, the new product may give an advantage over
the competition within a given price segment and if the new
product makes negligible new demands on the production system,
so much the better. Most new products fall into the latter
category, the principal variables being:-
Coloured cigarette paper (brown, black, striped)
? New printing on pack
Change of cigarette and filter length
Change o5 diameter and shape
Changing such variables to create altered perceptions and images
of products is the standard activity of product development and
market plsnning. It is supported by a substantial technical
effort by BAT and its suppllers. For the purposes of this paper,
such products are considered conventional, even though they may
have yet to be designed!
4.3 A list of needs was Obtained from existing documents and
~rom consideration of the situation of the industry. The 15st
was condensed and classified into sets according to their
ioport oetoth 0o0s orortosoc, ety Oi graml ,o
classifying needs, none were found that were of importance to
the customer and/or soclety that were not also important
commercially; although several of intense commercial importance ~
' were of little concern to the customer or society. Thus, all .
the needs shown fn Diagram 1 are of commercial importance.
.4 The list of needs arose from considering conventional
smoking products, yet it fs interesting to see how many of them ,
i: ~re already met by chewing tobacco, whose customer is not a
smoker at time of use. Existing smoking products (pipes, cigars)
have advantages in terms of some needs, in comparison with current
cigarette designs. Even if the list is incomplete and lacks some
detail of the many contributory needs, new products emerging as
:i~!ii~!~ commercially important during the next ten years can be expected
to offer improved responses to several of those needs. The
conventional smoking products (para 4 2) will tend to emerge
i~::2~ from the LO-LO cornel" Of Diagram I, whilst really new products }~i!
~ :" : will tend to emerge from the } I-HI corner T ese two rou~es may :~ "~'
be dlfflcu]t fo dlst]ngUlsh when new products emerge ~ro~ the ~ ~: ....
;:~, c2galctte Industry ~Ild are alined at the clgarette marke~.:! The :~&2~:~:[:~
~:~!~i ~'~ two routes and ~ew pyodlct styles cou) d be very different "if ~ ~9~
Page 6: 0000082026
4.5 Trends and needs interact. As smoke deliveries have
fallen, a greater proportion of the tobacco is smouldered
away to give sidestream smoke*, which is both environmentally ii~i
undesirable and wasteful. Nicotine deliveries have fallen too, i~
and if smokers seek nicotine, there must be a lower limit to
the delivery of nicotine by an acceptable cigarette. The need ii~ii~
for nicotine will be in conflict with the strategy of driving
towards ultra-low delivery cigarettes in the hope of taking
the cigarette industry. New types of products will be needed
, 5.1 There is clearly a need for an effective, low cost, low
delivery cigarette. Low cost means minimising the quantity
and cost of ingredients and the cost of manufacture. The
obvious route is to roduc~ the size and weJgh~, hut this may
he resented by the consumer, especially if tax is a large part
of the purchase price.
5.2 An alterna*ive is to reduce weight, but not size, through
increased filling power.
which is only profitab'le in certaln countries. A high percentage
of expanded tobacco in a blend leads to cigarettes which give
relatively few pulls because they are short of fuel• Current
attempts %o increase the number of puffs use a low porosity,
slow burning elgarette paper, which causes a decelerating
smoulder, and a tendency for the cigarette to extinguish
puffs• What seems to Be needed is a cheap fuel to keep the
cigarette ~light during the smoulder period and a good quality
tobacco to be burnt mainly during the pu~I.
5.3 Sectioned cigarettes have been proposed, hut their
' ~ effectiveness tends to de~end on each puff being taken at the
5.4 Annular cigarettes are a much more promising design. The
outer tobacco annulus b~rns during a puff to provide ma]nstrealn
"smoke, wbilst the inner annulus of mere fuel smoulders slowly
and steadily producing little visible sidestream in the interpu
5.g Carbonlsed v~scose has been patented for such an inner core
by Philip 14orris but Philip ~orris has not claimed all
possibilities p~,~tly becanse of an earlier pa~ent from BAT.
+ . ~ ~ gaseous products including carbon monoxide, tend to increase
Page 7: 0000082026
5.6 Tobacco stalk is usually wasted, yet it comprises some 50~
of the weight of the tobacco plant. Hildly carbonised stalk
might well provide the bulk of an inner fuel core material.
What little smoke the core produced should be compatible with
normal cigarette smoke. (Heat treated stalk has been patented
by Philip Morris as an ingredient of reconstituted tobacco sheet.)
5.7 The core material would contain fuel, filler, binder and
adsorbed flavours. In one variant, it would be extrudable, and
might have an external catalytic sheath to oxidise carbon
monoxide. Existing knowledge of cigarette making machine and
their modification to produce annula'r cigarettes provides a
sound basis for development. Cost savings should be between
7~ and 15~. . .
5.8 An a]ternatlve route to ~n inner core would be to fold a
strip of paper-like smoking material (e.g. Cytrel and/or PRT)
by drawing it through a suitably shaped die.
5.9 The amoun~ el nicotine delivered to a smoker has fallen
over the past 20 years In the 1950's it was common for the
new smoker 50 feel sick in the early days Of the habiY, but
reports of such queaslness seen to be less common today.
Perhaps smoking is ]e~s unpleasant to starl today than ever .
before. The remainder of this section is concerned with smoke
and especially nicoline as the "const~ed product".
5°10 However, i~ does not necessarily follow that today's
products are less satisfying. Heavy smokers develop a tolerance
towards Dicotine ~p to eighl times greater than non-smokers.
I~ ~here is a relztionship between Yequi~ed nicotine intake and
nicotine tolerance+ then the nicotine ezztering the smokers of
low delivery products is more effective on a relative basis. ~'~' "~.
Simple proportioning ~gainst traditional products would suggest ~
tbat the lower limit of delivery zo smokers seeking a nicotine
effect wou]fl be 0.3 mg.
5.11 At a tar/nicoline ratio Of 12, such a c iga]-ette would be +
in the ultra low delivery category at below S milligrams. E~en-
lower tar deliveries would be possible if the %at/nicotine ralio
were lowere~, but experience has tended to show that such
clgarezzes are rejected because of burning sensations. There
appears to be an upper limit for the nicotine concentration in
an acceptable smoke
5.12 Nicotine could be diluted in smoke psrticles by an
material of non-tobacco orlgin (e.g. ~]ycerol propy]ene g]yco]
Whether the market or regulatory nuthoritJes could accep~ such
a discrimination of "tar" and "non-tar" in smoke Js doub£f11].
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.13 In the longer term, it is conceivable that nicotine
effectiveness might be reinforced by other agents that are
not drugs in their own right. Perhaps by retarding nicotine
• metabolism, or by increasing the efficieno~~ of nicotine
transfer to receptors in the central nervous system, or even
y conditioning the receptors themselves. Conventional
pharmacologlca] tests are too crude for studies in such a
delicate area of psycho-pharmacology, where developments must
be considered as a pacing technology leading both the microgram
tar league and ~o products competitive %0 cigarettes Using
nicotine-like substances. GR&DC ought to carry ou~ connecting
research in this paclng technology, so as io be likely ~o both
hear of, and appreciate the slgnificance of external developments.
They may even eliminate any need to inhale smoke to achieve
6. Products Suggested through Creativity Techniques
6.1 In 1980, three ~eams with four members each, were se~ up
in Gn&DC. They used brainstorming and other techniques ~o
develop lists of possible products. The lists have been
collatPd, classified and condensed to produce Diagram 2.
6.2 The items have been allocated by the writer to the BI/LO
boxes of concern in Diagram I: firstly, according to their
initial intent and secondly, re where the> are likely to be
seen if they ~ppear on the m~rket:-
Concern HI 8 _7
I g ll
Smoker LO 15 0
Concern to Society
If this assessment is eve~ approximately correct, the bulh of
innovations developed for co~nercial purpose and aimed at
consumer will receive a wider socio-politica] ~tlention and
some will be subject to direct regulation.
6.3 The items in Diagram 2 have been ~ssessed i~ terms of:-
distance from BAT's eurren~ business
investment in manufacturing and marketing
distance from BAT's current kno~ledze and technol¢
t~mescale to fruition ~nd chance of succ