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'c`... L _ ,vrac.:.. R. J. Reynolds Foods had another year of excel- lent sales growth in 1969. Five brands continued in top position in their respective product cate- gories: CHUN KING in Oriental Foods; PATIO In Mexican foods; HAWAIIAN PUNCH in fruit punch- es; COLLEGE INN in broth and boned chicken; and BRER RABBIT in molasses. CHUN KING introduced a line of premium five- course dinners - one of the most successful new product introductions in the frozen food field. Other new offerings were four flavors of egg rolls, four entrees in cooking pouches, and two fried rice products in pouches. CHUN KING packaging was redesigned for greater merchandising impact. PATIO introduced a line of burrito rolls very successfully in the Southwest. These items - crisp pastry shells stuffed with a variety of fillings - are scheduled for national distribution. Sales of HAWAIIAN PUNCH continued to rise, with the "Punchy" TV cartoon character used as the focus for a total marketing approach. New flavors for the fine are being test-marketed. MY-T-FINE desserts were reformulated and the packaging redesigned for more aggressive mer- chandising. MY-T-FINE canned puddings were in- troduced in selective markets. VERMONT MAID experienced a significant sales increase. It also became the first national-brand syrup to be marketed in a plastic bottle, with substantial savings in packaging and shipping costs and greater appeal to consumers. COLLEGE INN had a good year, reflecting its commitment to strong promotions directed to home economics teachers and students. Throughout the entire Reynolds Foods organiza- tion, emphasis will continue to be placed on de- velopment of new specialty products. JOHN PHILLIPS President, R. J. Reynolds Foods, Inc.

f ` 10 Aluminum and Packaging Archer Products, Inc. increased its sales in 1969 in all three divisions - Metals, Packaging, and Consumer Products. Each division exceeded the growth rate of its respective industry group. Archer's sales to outside customers continued to accelerate and for the second successive year ex- ceeded those made to the parent company. Work was begun on an expansion program at the Winston-Salem facilities of the Metals Division. In addition to supplying continuous cast aluminum for its two metals plants in Winston-Salem, the increased casting capacity will enable Archer to furnish a substantial portion of the aluminum re- quired by its Huntingdon, Tennessee, plant. The past year brought to all three divisions a broader acceptance of their product quaiity and increased recognition of their technical compe- tence and service. Closer working relationships were developed with major corporations to meet many diverse applications, and more than sixty of the nation's top companies were customers of Archer last year. The Consumer Products Division, which intro- duced two new lines of gift wrap, had an outstand- ing year, far outstripping its industry in the pace of its growth. At Filmco, Inc., dollar sales volume was down from 1968 because of extreme price deterioration in packaging films during the first half of the year, although volume was up on a poundage basis. __ A shrink film developed by Filmco to capitalize on the growing trend to automated meat packag- ing in supermarkets made sales gains the last half of 1969, and a high proportion of these sales rep- resented new business rather than replacement for regular meat films. A new gold-tinted film for meat also had fine acceptance. SAMUEL A. ANGOTTI President, Archer Products, lnc. PAUL J. VAUGHAN President, Filmco, Inc.

. In September, 1969, the Company agreed to divest itself of its subsidiary, Penick & Ford, Limited. By consenting to this action, the Company will retain the properties and products of the former grocery division of Penick & Ford, which were transferred to R. J. Reynolds Foods, Inc. in 1967. As the stockholders were advised in the interim report dated October 27, 1969, under the final judgment the Company is required within two years to divest itself of its interests in the present Penick & Ford company as a going viable concern engaged in the corn wet milling business and the potato starch business. The divestiture may be made by any of several methods, but at this time no decision has been made as to how it will be accomplished. Penick & Ford's dollar sales for the year, includ- ing the Potato Products Division, were 24% great- er in comparison with 1968, which was marked by a three-month strike. Prices and profit mar- g,-,!: for corn syrups were higher than in 1968 but re.malned unsatisfactory for starch products. The Potato Products Division showed a good increase in dollar volume and profits compared with 1968. A promising new product developed at Penick & Ford during 1969 consisted of a group of hydro- phobic starches with unique properties for paper and other applications. Production of commercial quantities is expected in early 1970. R. V. CRONIN President, Penick & Ford, Limited .~ ~ Lu 1 1

r i -. J.-;,t'-_ i^h The merger of McLean Industries, Inc. into R. J. Reynolds in May was the most significant step yet taken by the Company in its continuing diversifi- cation program. Sea-Land Service, Inc., the operating company of McLean Industries, is a containerized freight service company utilizing the concept of inter- modal highway trailers over land and sea. The company began pioneering containerized freight transportation thirteen years ago on the first regularly scheduled containership run be- tween Newark and Houston. Since then Sea-Land has grown to a fleet of 48 containerships trans- porting more than 35,000 computer-controlled containers on regular calls to 51 port terminals throughout North America, Europe, the Caribbean, and the Far East. Four fundamentals account for Sea-Land's effi- cient and economical container transportation: ocean-going capability, a world-wide network of _ ports, modern container facilities at dockside, and a system of inland coverage through strategically located terminals. The key to this whole concept is the Sea-Land container itself, a highway trailer that travels equally well aboard ship, by rail, or by motor carrier. In effect, the container becomes a sea-going vessel, a rail car, or a truck trailer. The benefits of this approach to freight handling are several: vessel turn-around time is greatly reduced; expensive packaging even for overseas shipments becomes unnecessary; and goods move under seal from door to door. Two important steps have been taken to extend Sea-Land's capabilities. Orders have been placed for the construction of eight high-speed container- ships, which will be added to the Sea-Land fleet as they are completed during the period 1971-73. Each vessel will have a speed of 33 knots and a capacity of 1,082 trailers of 35- and_ 40-foot _ lengths. In addition, Sea-Land has entered into a MALCOM P. McLEAN Chairman, Sea-Land Service, Inc. MICHAEL R. McEVOY President, Sea-Land Service, Inc. 20-year agreement with United States Lines, sub- ject to approval by the U. S. Maritime Commission, to charter 16 containerships and to lease related equipment, with an option to buy the vessels and equipment at the end of 20 years. Competitors have objected to the proposed charter, and hear- ings before the Maritime Commission have not been completed. The additional capacity to be provided by con- struction of the new fast ships, and the proposed time-charter arrangements if consummated, will contribute significantly to Sea-Land's capabilities in the rapidly expanding containerized freight transportation industry.

Tobacco Foods and Beverages Aluminum and Packaging Containerized Freight Transportation

r'o. 11 among all cigarettes, WINSTON continued to outsell all other brands in the nation In 1969, widening its lead over its nearest rival. WINSTON King Size was the Industry's top- selling 85-millimeter brand, and WINSTON Super King led in the 100-millimeter category. I t , 22

iR 0 i Ii a 0 © ® a t7m aw R K ? In Sa[cm %I1Flllfiell-7RJfI A-* I No. :1 among menthol cigarettes, SALEM was the country's best sellfig brand in its category for the twelfth consecutive year and ranked fourth among all brands. SALEM Super King, leading the 100-millimeter menthols, gained in volume over 1968. SALEM King Size headed the 85-millimeter menthol category.

...- ~ rcRrcrSit r nnNESr7C 3L~ RLF..1'n among regular-size non-filter cigarettes, CAMEL continued as the dominant brand in this field. Its market share of that business was well over 50 per cent. CAMEL Filter enjoyed a good growth in sales during the year. t i

i DORAL, combining good flavor with a unique filter system, was placed in national distribution in mid-1969 and outsold every other new cigarette brand introduced in the last two years. Shortly after its introduction in 1967, WINSTON Super King forged to the top of the 100-millimeter field, and it maintained its lead in 1969. PRINCE ALBERT maintained its position as the nation's largest selling smoking tobacco, and CARTER HALL again showed a substantial increase in volume. DAYS WORK retained the top spot in sales of all plug chewing tobacco brands and gained in volume and share of market. ,.., ..... .. -r.c-_=a.44 4

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