Charles Price:

It’s five minutes late now. I sort of think it’s a little facetious to introduce someone as well known as our speaker, especially to this audience. Bill Humphries has been deeply involved in agricultural journalism for a great many years in North Carolina, as all of you know. Born in Woodsdale, North Carolina, graduate of Wake Forest University, for many years the farm editor for the Raleigh News & Observer. He is now food and agricultural news editor in the department of agricultural information of the School of Agriculture and Life Sciences at North Carolina State University. He has certainly been one of the most loyal supporters of the tobacco symposium here at East Carolina University, attending the 1973 session as a representative of the press, the fourth estate, returning as luncheon speaker in 1974 and today featured in another spot on the program. His topic is “Synthetic Cigarette Material and the Tobacco Trade.” Without further ado I’m quite happy to present, of course, Mr. Humphries.

William Humphries:

Thank you. Ladies and gentlemen, it is a pleasure to be here with you. For the record the town of Woodsdale in which I was born, the post office

there was abolished as of March 1 this year. [Laughter] I don’t know whether that’s symbolic or not. [Laughs] Sitting here looking at this crowd I figure that I must be a double idiot, first to attempt to stand here and talk to a group of people who know so much more about tobacco than I do, tobacco and related subjects, and second to attempt to discuss a subject whose future is so unknown as much as synthetic materials, their future, trying to say anything about that. A historical symposium, its role is not to predict but to relate facts that have occurred up to the present and so maybe I’ll stay out of trouble most of the time, Ken, by sticking to what’s happened up to now without trying to predict where we might go from here, which reminds me of the story I heard about one small boy asked another, “What do you suppose people did before electricity was discovered?” The other boy thought a minute and he says, “I don’t know. I guess they must have watched television by candlelight.” [Laughter]

This real estate agent in New York was showing houses to a couple, a young man and young woman from the South, and he came to the first house and he started bragging on it, and as they approached it he says, “Now I want you to know that here we have a house without a flaw,” and the young Southern woman spoke up and said, “Really? What do you all walk on?” [Laughter]

Well you probably heard the story about the robins. Mr. Robin went off on a business trip and he came back, looked in the nest, lo and behold there was a strange looking egg. He turned to Mrs. Robin and indignantly asked, “What on earth has been going on here?” and she said, “Oh, nothing to get excited about. I just did it for a lark.” [Laughter]

That most eloquent speaker perhaps of all time, certainly the most eloquent speaker of the twentieth century, Sir Winston Churchill, was once criticized for ending a sentence with a preposition. He turned to the person doing the criticizing and said, “That, sir, is a type of damn foolishness up with which I will not put.” [Laughter]

Well, the tobacco industry in the United States never ceases to amaze me. Like Topsy it just keeps on growing. Last year American farmers produced almost two billion pounds of all types of tobacco for which they received gross returns of about two billion, one hundred and fifty million dollars. The flue-cured or bright leaf crop alone produced chiefly in five states of the southeast brought in excess of one billion dollars in 1973 and more than one point three billion in 1974, and it is entirely possible that farmers in a single state, the state of North Carolina, will receive over a billion dollars for their 1975 crop of flue-cured. That’s a lot of money, but what about retail sales of tobacco products? According to the Tobacco Merchants Association of the United States, American consumers in 1974 paid out the staggering sum of fourteen billion, three hundred million dollars for cigarettes, cigars, smoking and chewing tobacco, and snuff. Expenditures for cigarettes alone totaled a little over thirteen billion dollars, accounting for ninety-two cents of every dollar spent for tobacco products. For the past several years retail sales of cigarettes have been increasing at a rate somewhere between seven hundred and fifty million dollars, three quarters of a billion dollars, and one billion dollars a year.

It can certainly be said that tobacco, despite all of the attacks on it and despite all of the opposition and the criticism and the punitive and restrictive legislation proposed and enacted, is indeed a growth industry. Exports of U.S. tobacco and tobacco products--and you’ve just heard those discussed by an export in the field, my good friend, B.G.

Andrews--in calendar 1974 were valued at one point two billion dollars, an all-time record. Exports added a net amount of nearly one billion dollars to the positive or favorable side or our balance of trade position with the rest of the world.

In the words of a well known cigarette ad, it can truly be said of the U.S. tobacco industry, “You’ve come a long way, baby.” Now a new element has entered the picture, synthetics or “artificial” tobacco. Of course tobacco substitutes have been around ever since small boys started going out behind the barn and smoking short lengths of grapevine or trying to role their own in brown wrapping paper, using corn silk, oak leaves, or maybe even rabbit tobacco, a common Southern weed. None of these unpleasant tasting items ever became a commercial product, thank goodness, but in the 1960s a firm in the Texas town of Hereford--and that’s a name that could stand for a lot of bull--began marketing a cigarette made out of lettuce leaves entirely. Well, it was called “Bravo” and it was launched with much ballyhoo. Many U.S. smokers tried a pack of Bravo but in most cases one pack was enough and they didn’t even finish smoking that pack.

The all vegetable cigarette flopped because smokers did not like its taste. In at least three European countries today, however, thousands of persons are smoking cigarettes that are part synthetic. One of the leading artificial materials being used is Cytrel, developed by the Celanese Corp. in a pilot plant in Charlotte, which happens to be the largest city in the leading tobacco-producing state of the United States. Another synthetic being tested in cigarette blends in Europe is called simply “new smoking material” or NSM, developed by the Imperial Tobacco Group in collaboration with the Imperial Chemicals Industries or ICI. The Imperial ICI organization is building a factory

in Scotland to produce new smoking material on a commercial scale. Production capacity reportedly will be about twenty-two million pounds, approximately one tenth the amount of tobacco used by British manufacturers each year. Meanwhile Celanese is constructing a plant at Cumberland, Maryland that will produce synthetic Cytrel commercially.

Celanese contends that it is not trying to compete with U.S. tobacco growers but rather to supplement their efforts to supply the world market with cigarette smoking material. It’s true that world supplies of quality tobacco are tight and Celanese says it is attempting to help close the gap between demand and supply, but I think it’s worth noting to keep the record straight that plans to develop Cytrel date back to 1957 or ’58 when the United States had enough tobacco to stretch from here to the moon. It is not my role here today to predict the future of artificial tobacco but allow me, if you will, to do just a tiny bit of speculating for one moment. If Cytrel proves to be as successful as Celanese hopes, why doesn’t the company construct its production facilities in North Carolina? Then if, and I do say if, any tobacco farmers become unemployed as a result of the artificial material they could seek employment in the Celanese factories. [Laughter] This of course is a somewhat facetious suggestion. I don’t really expect Celanese to take my advice on the matter; at least they haven’t sought it so far.

Well, it is obvious that the new synthetics are much more formidable contenders for market acceptance than cigarettes made of lettuce leaves or the substitutes smoked by small boys out behind the barn. For one thing large amounts of capital, many millions of dollars, have been and are being invested in both Cytrel and NSM; also years of research have been devoted to their development. The West German Ministry of Health, after

three years of testing, has approved marketing of cigarettes containing Cytrel for an initial period of two years. Two major firms, Martin Brinkman and British American Tobacco, are involved. Earlier Celanese had announced a joint long term evaluation program with two British firms, Carreras Rothmans and Gallaher Ltd. The British government’s Hunter Committee, set up some time ago to develop guidelines for consumer testing of part synthetic cigarettes, has now approved limited marketing trials in that country. A Swiss tobacco company, Laurens Rothmans, has received clearance from the national health department in Switzerland to market cigarettes with twenty percent Cytrel and the sales of that product began just last month. A third contender in the manmade “tobacco” race is [15:13], also a British manufacturer. Late in 1973 this company test marketed “Planet,” a cigarette containing fifty percent synthetic and fifty percent tobacco in the Coventry area of England, but after three weeks the tests were discontinued, presumably because of objections from the government’s Hunter Committee, which had not give approval for the testing of this product.

Except in the case of the Planet cigarette the proportion of synthetic material used in cigarettes now being marketed in Europe reportedly ranges from twenty to twenty-five percent with natural tobacco making up the remaining seventy-five to eighty percent of the blend. However, in what was apparently the earliest consumer test of the new synthetics conducted by Celanese in 1973, cigarettes containing from twenty to forty percent Cytrel were smoked by about one thousand American consumers for a year. This was done in comparison with cigarettes containing one hundred percent natural tobacco. According to Celanese officials, more than seven of every ten smokers participating in these tests preferred cigarettes containing Cytrel, even when the proportion was as high

as forty percent. The chairman of Imperial Tobacco, commenting on the synthetic NSM developed by his firm, said, “We are confident that we have an excellent tobacco substitute.”

In the pilot Celanese operation in Charlotte purified wood pulp is fed into machinery that turns out pieces of yellow and brown sheet material that looks like sheet tobacco. The pieces are something like two or two and a half inches square. After moistening and shredding the material is mixed with tobacco. Although Cytrel looks like tobacco, when smoked alone it is tasteless. Mr. John Offerdahl, marketing director for the Celanese product, said that Cytrel contains no nicotine, only one seventh to one third the average tar delivery of regular cigarettes, and when blended with tobacco proportionate reductions in nicotine and tar can be expected. The implication of course is that cigarettes containing Cytrel are “less hazardous” or “safer” for smokers. Now it’s not the tobacco company that has said this or even Celanese but the implication is there. If they make it a point in all of their news releases to state that the proportion of nicotine and tar in the cigarette or in the blend will be reduced proportionately by the amount of Cytrel added then they must intend for you to reach some sort of conclusion from that information.

Tobacco manufacturers for the most part shy away from any direct claim that cigarettes can be made “safer” by the use of a supplement that is nicotine-free and low in tar delivery; however the Progressive Farmer magazine recently quoted Dr. H. R. Bentley, who made smoke tests on Imperial’s NSM, to this effect, “We hope that in NSM we might have a product, the use of which could help reduce the incidence of disease associated with cigarette smoking,” and that’s about the most direct statement on this

phase of synthetics that I have run across anywhere. Dr. J.A. Wybrew, a widely known tobacco chemist at North Carolina State University, says that breeding programs are underway to develop varieties of tobacco with lower tar-generating properties, thus making these real tobaccos “safer” to smoke. Dr. W.K. Collins, an extension tobacco specialist at NCSU, says the reason people smoke is “the physiological stimulation, that is the pleasure they derive from the natural properties in tobacco including nicotine.” Collins continued, “If you take away part of the nicotine by using a supplement somehow you’ve got to put some back.”

Dr. Kenneth R. Keller, who is in the audience here, head of tobacco research for the North Carolina Agricultural Experiments Station, made this statement: “There is no reason for U.S. tobacco growers to panic. In fact developments in Europe in connection with synthetics could very well increase the pressure on American growers to produce adequate supplies of good flavorful tobacco to maintain taste and aroma in cigarettes made partly of artificial materials.” Both Dr. Keller and Dr. Collins believe that synthetics if accepted by smokers will be used to replace low quality neutral type tobaccos grown in countries other than the United States. Of course this could also affect the demand in this country for leaves from the lower portion of the tobacco stalk. Demand for low stalk leaves, as you know, has been weak in recent years. Dr. Collins said the high quality tobacco produced in North Carolina and other Southern states would continue to be in demand all over the world because of its unique flavor and aroma. Dr. Keller views the future of the U.S. tobacco grower as highly optimistic, despite synthetics and other problems including rising production costs. Dr. Keller said, “Our future hinges on the quality of tobacco we produce. Cigarette consumption is expanding all over the

world and the opportunity we now have to provide world markets with good tobacco is greater than I’ve ever seen it.”

Dr. Hugh Kiger, head of the tobacco division in the foreign agricultural service of the USDA, said that synthetic tobacco is an unknown and its future is difficult to predict, but he added, “I don’t believe it will go places in big volume in a short period of time.” It is clear however that artificial tobacco has been placed on the market somewhat earlier and in larger quantities than most people had expected. One reason for this is that rising tobacco prices have made substitute materials more attractive to cigarette manufacturers from the standpoint of cost. U.S. flue-cured prices to farmers for example rose a little over nineteen percent last year, from eighty-eight cents a pound in 1973 to a dollar, five last year. Burley tobacco prices rose almost twenty-three percent in one year, from ninety-three cents year before last to a dollar, fourteen during the recently completed marketing season. In other parts of the world tobacco prices also have been rising. In Ontario, for example, in the early weeks of sale the average price was about ninety-three cents a pound, up from seventy-nine cents the previous year. More recently Canadian growers have expressed dissatisfaction with the market prices they had been receiving. Rising tobacco prices are attributed to several factors, including soaring production costs, a worldwide shortage of good quality tobacco, and an increase of about four percent a year in global cigarette smoking. According to William L. Lanier, a tobacco official with USDA, tight supplies of tobacco in this country led to an “alarming” increase in U.S. imports of flue-cured and burley for consumption in 1974.

What is the cost of the synthetic tobacco materials? Industry sources indicate that Cytrel is being sold FOB the Celanese plant in Charlotte at a price somewhere in the

neighborhood of eighty-five cents a pound, and that of course is twenty cents a pound below the average market price for the flue-cured crop last season. In addition to the cost factor and the implied health benefits other advantages claimed for Cytrel include the fact that it is free of foreign matter, including pesticide residues, it is of consistent and uniform quality, and once production plants are built manufacturers will have a dependable source of supply.

Are any U.S. cigarette manufacturers using a synthetic material in their blends? I have an idea that some of you in the audience might be able to answer that question. I don’t know the answer. USDA reported that as of last fall one American firm had plans for test marketing a part synthetic cigarette in the United States but no details were given. It may be that some consumers in this country already are smoking cigarettes made partly of synthetic material without knowing it, but I doubt that this is so. Manufacturers in the United States, like those in Europe and elsewhere, are definitely interested in manmade tobacco but at least for the most part they probably will await the results of the tests in Europe before getting deeply involved in the use of synthetics. One speaker at the recent tobacco workers conference in Charleston, South Carolina, William Miller, told the meeting that so long as natural tobacco supplies are available and not much more expensive than now the possibility is remote that synthetic tobacco will make heavy inroads into the U.S. market.

Tobacco used per one thousand cigarettes made in the United States already has been reduced from two point seven pounds in the early 1950s to about one point nine pounds at present. That’s a decrease of thirty percent, brought about chiefly through the use of filters, smaller circumference of some cigarettes, more complete utilization of leaf,

including stems or midribs, and the use of Freon to produce puffed tobacco. NCSU specialist Collins believes the future of manmade tobacco depends chiefly on two factors: 1) to what extent will it be profitable and necessary for cigarette makers to utilize artificial materials; 2) to what extent and in what proportions will the new materials be accepted by smokers. That I think is a key point in the whole situation. The smokers are going to have the last word in this whole situation.

So far as I can determine no one expects a one hundred percent artificial or synthetic cigarette to hit the market, at least not in the foreseeable future, but margarine has largely replaced butter and fibers born in test tubes have made heavy inroads on markets for cotton, so we cannot ignore the development of synthetics in the tobacco industry. Of course, looking down the road quite a distance, if the world’s energy problems become much more severe, and if the global food supply situation becomes much worse, perhaps more and more people will demand that vital production resources, including land and energy, be used for food rather than for tobacco. Tobacco experts believe the most likely prospect is that synthetics, if accepted by smokers, will account for considerably less than one half the blend, perhaps somewhere around twenty to twenty-five percent. That would still leave a tremendous demand for tobacco, especially the high quality leaf grown in the southeastern United States. In short, I think our tobacco farmers, especially those who produce a quality product, will continue to be in business for many years to come.

Some interesting experiments are being conducted by Dr. W.H. Johnson of the North Carolina Agricultural Experiments Station. He is testing close-grown tobacco as a high yielding economical product that could help U.S. leaf growers compete with

synthetics. “It will be years before the close-grown tobacco system can be fully developed,” Dr. Johnson said, “But if the project succeeds growers will be able to produce a low cost tobacco product that would be available for manufacturers to utilize in sheet tobacco if they wish in preference to non-tobacco materials.” Close-grown tobacco would be seeded directly in the field with a drill, bypassing the plant bed operation completely. It would be seeded at the rate of about thirty thousand plants per acre, five times the normal rate. Plants call for the use of a modified forage type harvester that would chop up the entire plant, including the stalk, and produce a yield at least twice as large as that of conventionally grown tobacco. A modular curing system will be used.

Many extremely low nicotine cigarette brands have been marketed in the United States but very few have gained a respectable share of the market. People who smoke apparently want enough nicotine to give them a satisfactory degree of that physiological stimulation that Dr. Collins mentioned, that I referred to earlier. Both Dr. Johnson and Dr. Collins, as well as Dr. Keller, foresee continued strong demand for high quality U.S. flue-cured tobacco, but if manufacturers are looking for a supplement to help reduce costs the NCSU specialists believe that close grown tobacco probably would cause fewer problems in manufacturing and would also be more pleasing to smokers than non-tobacco materials. Said Dr. Johnson, “We feel that growers who wish to produce close-grown tobacco could sell it at a lower price and still receive a fair return in relation to production cost. This could be a vital factor in beating the competition from synthetics.”

To sum up then, the tobacco industry continues to change. Farmers, along with other industry segments, are willing to accept the challenge of change. In my opinion in 1975 the best way they can meet the challenge of synthetics is to grow adequate supplies

of high quality flue-cured and burley tobacco, making sure that their tobacco is as free as possible of sand, string, suckers, and other foreign matter. Even though production costs will be up growers realistically should not expect as much of a price increase in 1975 as the increase that occurred in 1974. A sharp rise in prices this year would be pleasing but it would have the adverse effect of helping to underwrite the rapid expansion of the use of synthetics. No, synthetics are not going to replace tobacco overnight, but they are a factor to be reckoned with in the years immediately ahead. I am confident that our growers and our industry and industry leaders will rise to the challenge, for change to them has become a way of life. In the words of the poet Longfellow, “Nothing that is can pause or stay. The moon will wax, the moon will wane, the sun come out to shine again. The clouds and mist will turn to rain, the rain to mist and clouds again. Tomorrow be today.” Thank you. [Applause]

Charles Price:

Do you have any questions? [35:36]

Questioner One:

In the area of the crystal ball, might there not also be a possibility that you could get increased consumption of cigarettes if you had those people who were let’s say smoking less now for health resurge realize that they might be able to go back to a partially fake cigarette in which case [36:00].

William Humphries:

I think this is entirely possible. If you reduce the tar and nicotine in cigarettes this could lead to an increase in the number of cigarettes smoked per smoker or perhaps some people who had given up smoking or cut down sharply would go back to it and there could be an increase in the number of units of cigarettes smoked, yes. I think this is a possibility.

Questioner Two:

[36:29] there are no plans at the present time that you know of to [36:34]

William Humphries:

I do not know of any. Now perhaps somebody in the room does. If they do I wish they’d [Laughs] volunteer the information.

Questioner Three:

I do know that [they came up to Maryland and bought] tobacco stalks, the Celanese Corp. That’s the last thing I heard. [36:58] five cents a pound.

William Humphries:

Five cents a pound for stalks.

Questioner Three:

[37:06]

Questioner Four:

[37:31]

Charles Price:

Well we’re very grateful for [what we’ve] accomplished today. It’s been an interesting topic. We’ll now have a fifteen minute break and return at 3:30 for the next session.

END OF RECORDING

Transcriber: Deborah Mitchum

Date: October 19, 2010