While doing some research for a recent blog named “Faros ya chupó Faros” about the origin and history of the Faros brand Mexican cigarette, I stumbled upon some facts about the current global cigarette industry that really amazed me. I had been aware for some time about the aggressive marketing campaigns of Philip Morris but I hadn’t realized what a gigantic presence on the global scene that Philip Morris has become. Anyone my age who grew up in the United States in the fifties and early sixties will never forget the voice of Johnny Roventini, the midget bellhop and his “Call for Philip Morraaaiis” during the commercials for the “I Love Lucy” show on television. Up until January 1st, 1971 we were also subject to Philip Morris Company television commercials for the Marlboro man, Viginia Slims, Chesterfields (Ronald Reagan’s cigarette), Parliaments, and L&M. On that date at 11:50 p.m. last television cigarette commercial in the U.S. ran during the Johnny Carson Show. As a matter of fact, I can still remember the cigarette commercials for all of the major brands because they were meant to be both entertaining…and addictive. Kids like nothing better than cute jingles and after all, we young people were potential future customers.
I became very curious about the origins of Philip Morris and its subsequent rise to market dominance and so I decided to dig down and see what I could learn. For one thing, it turns out that Philip Morris actually was a real person. In 1847 a man named Philip Morris opened a tobacco shop in London, England and in 1850 he began selling hand rolled Turkish cigarettes in his tobacco shop. Cigarettes were not very popular in the West at that time and among some men they had the reputation of being effeminate. That view changed considerably during the Crimean War (1854 to1856) when British soldiers learned how cheap and convenient cigarettes were on the field of battle. They copied their Turkish allies who called cigarettes “Papirossi” and the English troops brought the cigarette smoking habit back to the British Isles. Meanwhile, back at his tobacco shop, Mr. Philip Morris tried to satisfy the new demand by making hand rolled British cigarettes under the brand names “Oxford” and “Cambridge Blues”. Mr. Morris really struggled to meet the growing demand because skilled workers could only produce between 1500 and 2000 cigarettes in a ten to twelve hour day. Even though the best workers could roll four to five cigarettes per minute at their peak it was impossible to keep up that pace continuously. It wasn’t until the 1880’s that machines were developed that could continuously produce up to 6000 cigarettes per hour.
In 1881 Philip Morris went public on the London market and in 1887 the company became “Philip Morris & Co. Ltd.”. By the time the year 1902 rolled around Philip Morris & Company was incorporated in New York City and had opened an office there. At that time the entire cigarette industry was producing about 3.5 billion cigarettes yearly but that was still only about half of the number of cigars being produced. This fact is of particular interest to me because I happen to be the grandson of a cigar maker. My Grandfather, Stanley Mrotek was born in Manitowoc, Wisconsin in 1889 and he learned how to roll cigars by hand at an early age. Unfortunately (or perhaps fortunately) for him, a man named Oscar Hammerstein of New York City invented the first practical cigar rolling machine around the same time. Grandpa eventually had to give it up cigar making and he and my Grandma finally moved to Chicago and opened a “mom & pop” candy and tobacco store on Damen Avenue near Fullerton. My father grew up above the store and I was born nearby in 1947. By the way, the grandson of Oscar Hammerstein, the man who invented the cigar machine, was none other than Oscar Hammerstein II of “Rodgers and Hammerstein “ songwriting fame. Anyway, it wasn’t until World War I that cigarette smoking really came into vogue and started to push cigar smoking into the background. After the first world war the cigarette “boom” really took off in earnest, especially in Europe and America.
As just about everyone knows, the absolute biggest success story for Philip Morris is the “Marlboro” brand. Marlboro was one of the brands that Philip Morris & Co. brought to New York from England and it was named after “Marlborough Street” which was the street in London upon which the Philip Morris factory was located. Many people don’t know that the Marlboro brand was aimed at women in 1924 with the slogan, “Mild as May”. In the years following World war II the Philip Morris Company wanted to re-invent the Marlboro brand and direct it towards men and the marketing people hit upon the idea of using the American Cowboy an icon. The rest, as they say, is history. These days two out of every five cigarettes sold in America are Marlboro “cowboy” cigarettes. Not only that, but the brand is becoming increasingly popular the world over. In some cases, Philip Morris actually alters the taste of the Marlboros to suit the preferences of their international clients. In Indonesia, for example, they add the taste of “kretek” a sweet smelling spice that is derived from cloves.
In recent years Philip Morris had been trying to unburden itself of the slowing U.S. tobacco market and the serious threats of litigation from aging American smokers who are dying from lung cancer and emphysema. The company stressed the fact that they were only interested in maintaining their market share among committed smokers in the U.S where they weren’t permitted to advertise and cigarette sales had been declining at the rate of 2% to 4% per year. This decline in smoking is not the case globally though and the company is positioning itself to take advantage of burgeoning markets in underdeveloped and newly developing countries. Even though sales are dropping steadily in the U.S. and Europe, sales figures are climbing steadily in Asia, Latin America, the Middle East, and Africa. Until 2003 Philip Morris was a diversified company that also controlled popular food brands such as Kraft, Ritz, and Oscar Meyer. In 1967 Philip Morris had already separated its domestic sales from its international sales by establishing Philip Morris International. In 2003 Philip Morris changed its name to “Altria” and spun off most of its food business. Then, in 2008 Philip Morris International was spun off from Altria becoming the world’s leading international tobacco company and the third most profitable international consumer goods company.
Approximately 5.5 trillion cigarettes are produced each year by the combined western style cigarette industry and they are smoked by over one billion people which is about one sixth of the world’s current population. That means that there is still a huge potential market that is being divided among just a few large companies, the largest by far of course, being Philip Morris International. China alone has 350 million smokers who each year light up 2.3 trillion cigarettes which is about 42% of all cigarettes smoked world wide. Over the next decade China sales will no doubt dramatically increase the growth of Philip Morris. The Chinese market is just one big potential. The market in India is another. In India people consume about 100 billion western style cigarettes per year but they also consume over 800 billion of an Asian type cigarette called a “bidi” (pronounced BEE-dee). A bidi is a thin cigarette made of tobacco and other ingredients wrapped in a tendu leaf and secured with colored thread at one end. Tendu leaves come from the Tendu tree (Diospyros Melonoxylon Roxburgh) which is a member of the Ebony family (Ebenaceae). Bidis are regarded as a cigarette for the poor and the tobacco is generally of such a low grade that often other ingredients and “flavors” are added to the bidis just to make them palatable. There are millions of people in India and Southeast Asia dedicated to the production of bidis. Bidi rolling is a cottage industry and is typically done by women and children in their homes. More than 325,000 children labor in the bidi industry in India alone. Women, and children in their teens, can roll 1,500 to 2,000 bidis per day. That is about the same rate as the women hand rollers for Mr. Philip Morris of London or the El Buen Tono Company in Mexico City could make cigarettes in the early days of western style cigarette production.
The commercial tobacco trade had a humble beginning in the “Old World” when Francisco Fernandez introduced smoking in Europe in 1558 and created the first international market. Then pioneer John Rolf cultivated the first tobacco at Jamestown, Virginia in 1612 and created in the “New World” the first steady international tobacco supply. In 1760 Pierre Lorillard built the first tobacco product factory in New York City to make snuff. It was not only America’s first tobacco company but it is the oldest continuously operating company in the U.S. It later became the American Tobacco Company and produced “Old Gold” and “Kent” brand cigarettes. Tobacco has been with us for a long time and it will no doubt be with us for a long time to come. In reviewing the history of the Tobacco Industry I realized that more than any other industry it seems to be full of acquisitions, consolidations, political intrigue, legal wrangling, accusations, condemnations, and lots of blowing smoke (pardon the pun). Why? Because the product is cheap to produce, addictive, and extremely profitable to market. After all, nicotine is just another form of addictive drug and there is a new potential addict born every five seconds somewhere in the world. Some people say that the “Golden Age” of the Tobacco Industry emerged in the 1940’s and lasted through the 1950’s. Well, maybe in America the “Golden Age” ended but in much of the rest of the world the “Golden Age” is yet to come and most of the “gold” in the next “Golden Age” will go to Philip Morris.