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~,,'C~~&w MEMORANDUM December 20, 1973 PRODUCT DEVELOPMENT COMMITTEE MEETING MIAMI - DECEMBER 11, 1973 Those Attending Mr. J. R. Ave Mr. R. W. Newsom Mr. A. J. Bass Dr. A. W. Spears Mr. C. H. Judge Mr. C. L. Tucker Absent: Mr. D. R. Tedder Following the attached agenda the meeting got underway with a lengthy discussion of the make-up and functions of the Product'Development Committee. Copies of the Objectives, Purposes, and Guidelines as laid out by the original Committee were distributed for review. Mr. Ave suggested an Executive Committee as a policy commi'ttee and a"Product"Development Committee as a working committee; the latter reporting to the former. Dr. Spears expressed the opinion that a Product Development Committee should have the elements of Market Research included. The discussion continued as to who should be included on the committee and the scope of activities handled by it. Mr. Judge suggested that each person think about the make-up and function of the committee and get together the first of February with suggestions. It was also suggested that Mr. Orcutt, Mr. Peterson, and possibly - Mr. Stevens, be included on the committee. On communications, Dr. Spears requested that the Marketing group keep everyone involved aware of plans, such as the introduction of new items into test market. Mr. Judge expressed concern that all formula changes and new product formulas were not getting to him for approval. He requested that all new product formulas be approved by him before manufacture. Dr. Spears then brought up the developing problem of shortages in manufacturing supplies. Some of the current pending shortages are cigarette ingredients which could effect cigarette quality. Contingency plans are being developed to deal with these shortages but, as explained by Dr. Spears, they may develop suddenly without forewarning.

Problems dealing with shortages in glycerine, filter plasticizer, and polyethylene for True mouthpieces were discussed. In the area of specific products the increased moisture tests for chewing tobacco were discussed. A marginal improvement for,Big Red at increased moisture was noted in a taste panel test. Beech Nut, Big Red, and Havana Blossom were field tested for mold susceptibility at varying increased moisture contents. The following moisture increases which are well below those where mold can be expected were recommended: Beech Nut from 21±2% to 23±2%; Big Red from 22±2% to 24±2%; Havana Blossom from 20.5±2% to 22±2%. These changes should actually result in a cost reduction since these products are sold by weight. Another item on chewing tobacco, which is the elimin- ation of the bulk sweating procedure, was discussed by Dr. Spears. Some time ago the bale sweating procedure was replaced by a hogshead procedure. Studies have been pro- ceeding on replacing the final bulk sweat by a hogshead sweat. The-chemical data and taste panel results are now complete and the answer is yes, the hogshead sweat and the current bulk sweat yield the same results. With the elimin- ation of the bulk sweat a potential ©SHA probl-em is also eliminated. Mr. Judge suggested that we move ahead in converting over to the final sweat in hogsheads. Continuing on chewing tobacco, Dr. Spears informed the committee that the downstream or manufacturing process side of chewing tobacco is being looked at. The next item discussed was the Kent test with the synthetic No. 1 flavor. The final report on the consumer test had just been completed and Mr. Ave stated that the conclusions indicated the consumers could tell no difference. He would like to go over the details of the report before giving a final answer. Also desired are the sales reports in the test market area compared with those in the control areas. It was brought up that if we were not going to .change to the synthetic flavor, we would have to start looking for a new supply of tonka beans by the first of the year. Mr. Ave promised a final answer by January 3, 974. The final items discussed were the new products and line extensions Product Development has received requests for. These were the Lo-Fi Menthol, the super cool Lo-Fi Menthol, True 100, Old Gold Filter Box, High taste Hi-Fi 85, Low taste Super Hi-Fi 85, and 100 mm True type Hi-Fi. Mr. Tucker brought out that the tentative scheduling of these

products by the different brand managers is tight in that many of the projects are falling due at very near the same time. Product Development will prepare a schedule of these projects which it feels it can reasonably meet and.send it out for approval. Mr. Ave was requested to establish priorities on scheduling conflicts which might occur in the future. • There being no further business, the meeting was adjourned. Respectfully submitted, Charles I~. Tucke CLT:gm