History104 LorillardTobacco

Lorillard Tobacco Company

Lorillard, Inc., is the their largest manufacturer of cigarettes in the United States. It was founded in 1780, and it is oldest continuously operating Tobacco Company in the Americas. It produces cigarettes for sale in both the premium and discount segments of the cigarette market.

History of Tobacco in America

Origins of Tobacco in the New World

The use of Tobacco pre-dates the Lorillard Tobacco Company by thousands of years. The exact origin of the tobacco used in pre-contact America is unknown but the possibilities include Mexico, the West Indies, and South America. From this original location, tobacco spread throughout North, Central and South America. The earliest evidence for tobacco in North America come from archaeobotanical remains dating to between 100 and 200 B.C. The first evidence of tobacco being smoked comes from the first century B.C. During this period before the cigarette, tobacco was smoked mostly in pipes but also as cigars in South America.

Use of Tobacco in the America's

Prior to European arrival, there was an extensive trade network for tobacco. While the exact beliefs and uses of tobacco varied cross-culturally some similarities existed throughout the New World. Tobacco was consumed through various methods including: smoking, chewing, drinking, inhaling and through enemas. While currently tobacco is mostly used recreationally, in this pre-contact period Tobacco was used spiritually, politically and medicinally. As a medicine Tobacco was used as a cure all. It could be used to treat pain, relieve abdominal symptoms, or as a disinfectant. Spiritually, tobacco was used in many aspects of ritual life and was considered to be sacred. According to Black Elk, for the Lakota Tobacco was used in seven rites: the keeping and releasing of the soul, the rite of purification, crying for a vision, the sun dance, the making of relatives, preparing a girl for womanhood, and the throwing of the ball. Tobacco may also have been used as a hallucinogen both on its own or mixed with other plants. Finally, Tobacco held an important place in political life. Tobacco use, as part of ritual, was used ceremonially to seal friendships and treaties between allying peoples in North America. This was recognized by later European settlers and resulted in the term "Peace Pipe".

Introduction and Spread of Tobacco in the Old World

Tobacco is one of the most important cash crops in American farming and native to the North and South American continents. The practice of smoking became known in the late 15th and early 16th centuries after European explorers returned to Europe from the Americas. The practice of pipe smoking was prevalent along the north Atlantic seaboard and Spaniards adopted the practice of cigar smoking in the regions around the Caribbean. At that time, many Europeans continued the belief that tobacco was a panacea, a new herb that could be incorporated into Western medical traditions and celebrated as an almost universal curative. In the late 16th century, the Spanish doctor Nicolas Monardes claimed that tobacco alleviated hunger, acted as a relaxant and a painkiller, and was even a cure for cancer. However, other people were against this claim, including King James I of England. James’s counter argument to Tobacco, published in 1604, described smoking as “a custom loathsome to the eye, hateful to the nose, harmful to the brain, dangerous to the lungs, and in the black, stinking fume thereof, nearest resembling the horrible Stygian smoke of the pit that is bottomless.” Regardless, the acceptance of tobacco into Old World culture was assisted from various aristocrats and rulers. It quickly spread throughout the European world and became a foundation for the growth of the American economy. For example, tobacco was introduced into the court of Catherine de Medicis in 1560 by Jean Nicot (from whom nicotine and tobacco’s botanical name,Nicotiana tabacum, get their names) and into the court of Elizabeth I by Sir Walter Releigh, who himself had been introduced to smoking by Sir Francis Drake. After tobacco’s introduction into Europe, the smoking and cultivation of it rapidly spread to other parts of the world. By the beginning of the 17th century, tobacco was being grown in India, China, Japan, Southeast Asia, the Middle East, and West Africa. The hookah spread throughout Persia (present-day Iran) and into India. Eventually it reached China, Southeast Asia, and many parts of Africa by the end of the 17th century.

By the mid-19th century, smoking had become an established ritual throughout the world. It was celebrated in prose, in verse, in art, and on the stage, and its use came to be seen as a significant integrant of manhood.

Cigarette Revolution

The action of smoking has been performed through several centuries. People would roll tobacco leaves into a fine paper creating a cigarette. This was found to be a tedious and could only really be done if one practiced rolling the paper over and over again. In North Carolina 1883, a man by the name of James Bonsack created a machine that could roll thousands upon thousands of cigarettes per day. This mass production of cigarettes was the lead to the creation of the American Tobacco Company. This was the first company to be able to cigarettes in mass quantities. With this creation of this company, smoking was much more convenient for people. The Lorillard Tobacco Company joined forces with the American Tobacco Company in 1910 in order to use the same technology to produce cigarettes. They didn't have to roll their own cigarettes and could easily by them pre-rolled by the pack. Cigarette’s were produced in packages of 10 at the price of 5 cents a cigarette. Cigarette’s were packaged in paper containers with a durable card to keep it from collapsing. Different companies would dress up the cards with different, designs, symbols, and other decorative features. People really enjoyed these cards. They were collected and traded among people because of how they looked. These cards really boosted cigarette sales and really got more people into smoking.

Smoking continued to grow in popularity into the 20th century. People smoked for a variety of reasons, (social acceptance, stress relief, to have a good time, etc). As we get into the later part of 20th century, the popularity of cigarette smoking continues to grow. Below is a chart outlining the population of smokers in the countries of Canada, Great Britain and the United States of America.

1950's

• Great Britian W52.30% M62.30% F39.90%
• United States W37.60% M52.60% F24.50%

1960's

• Canada W49.80% M63.80% F38.70%
• Great Britian W48.50% M55.10% F37.40%
• United States W42.20% M51.90% F33.90%

1970's

• Canada W46.80% M55.00% F39.10%
• Great Britian W50.00% M55.00% F45.00%
• United States W37.70% M44.10% F31.50%

1980's

• Canada W42.60% M45.20% F37.20%
• Great Britian W42.00% M30.90% F28.10%
• United States W33.20% M37.60% F29.30%

1990's

• Canada W32.70% M38.10% F28.80%
• Great Britian W32.60% M28.50% F25.10%
• United States W25.20% M28.40% F26.80%

2000's

• Canada W25.00% M22.70% F23.40%
• Great Britian W27.50% M31.60% F24.80%
• United States W20.80% M25.20% F20.00%

2010's

• Canada W22.50% M25.00% F14.60%
• Great Britian W18.50% M20.60% F17.90%
• United States W19.30% M21.50% F17.30%

W= Whole Population, M= Male Population, F=Female Population

Creation and History of Lorillard Tobacco Company

Lorillard advertisement, 1789

Lorillard’s Tobacco Business(1760s-1890s)

In 1760, businessman Pierre Abraham Lorillard founded the very first tobacco business in New York. . Lorillard’s tobacco business and his company claim to be the oldest tobacco firm in both Americas and the world.

Along with the development of the company, Pierre Abraham Lorillard built up a snuff-grinding factory in United States; the factory made him and the company the first ones producing snuff in North American.

Snuff Advertisment

During the American revolutionary war, Lorillard was killed in the British occupation of New York City. Although he had been passed, his descendants took over the business and kept developing the company. In 1776, Lorillard’s sons Peter and George began to advertise their products in New York newspapers, featuring images of the Native American smoking pipe. Lorillard diversified its tobacco products and included chewing in addition to smoking tobacco.

Receipt Sign

The chewing tobacco soon became extremely popular in the early 1830s. In 1890, James Buchanan Duke founded the American Tobacco Company, ATC.

James Buchanan Duke

American Tobacco Company(1890s-1910s)

The company began to increasingly dominate the tobacco industry in North America. Although the company looked like any other independent company,it was actually formed by four firms, with Lorillard being one of them. They were also known as members of the “tobacco trust.” According to the record, in 1890, the ATC and its five constituent companies of American Tobacco: W. Duke & Sons, Allen & Ginter, W.S. Kimball & Company, Kinney Tobacco and Goodwin & Company produced 90% of the cigarettes of the whole year in the United States. The ATC was successful during the end of 1890s, but it was facing a break up situation by 1911.

Challenge of Anti-Tobacco(1911-1997)

In 1911, the government issued a Dissolution Decree and antitrust investigation on ATC and the ATC was ordered the break up the company. The P. Lorillard company once again had the chance to be an independent company. The medical community first challenged the tobacco industry in the 1950's, and then the federal trade commission challenged it in the 1960's. In 1994 Andrew Tisch, Lorillard’s CEO, disagreed that nicotine and cigarette smoking would cause cancer. In addition, in the beginning of the 1980s, anti tobacco activism shifted decisively toward the courts, eventually wining some major settlements by exploiting change in tort law.Regarding this, Lorillard was one of four entities to negotiate to the 1998 Master Settlement agreement Between “Big Tobacco” and 46 U.S. states in 1997. Although the tobacco industry is being challenged, Lorillard survives in the market and keeps playing an important role in today’s tobacco and cigarette industry.

Lorillard Tobacco Company Today

The company currently maintains its headquarters and manufacturing plant in Greensboro, North Carolina.

Newport Cigarettes

Lorillard currently produces 3 premium brands (Newport, Kent and True) and 2 discount brands (Maverick and Old Gold). Each one of these 5 brands comes in several of its own variations, totalling 41 different products in all. The company’s flagship brand is the menthol Newport, which accounts for 94% of the revenue, 92% of its volumes and a 35% share of all menthol cigarettes in the United States.

In April 2012, Lorillard bought the Blu electronic cigarette company for $135 million. This was the first time a tobacco company has entered the “Ecig” market. An Ecig is a battery powered device which can be charged via usb for use. It converts liquid nicotine (instead of tobacco) into a water vapor that is inhaled by the user. Since there is no smoke, fire or ash involved in using an electronic cigarette, it is largely permitted in venues such as airports and restaurants where tobacco smoking is banned.

Blu Electronic Cigarettes

Due to health concerns regarding tobacco use, Lorillard has to comply with numerous regulatory standards. These standards include but are not limited to providing an ingredient list, contact information for addiction support, clear warning of the health hazard on the package, as well as restriction on usage of misleading words such as “light”, “mild” and “full-flavoured”.

Despite the declining popularity of cigarettes, in 2010 Lorillard celebrated its 250th anniversary and stands as one of the longest continuously running companies in America today. As of the end of 2013 fiscal year, Lorillard Tobacco Company (LO) has seen its profits rise again to a new high of $4.97 billion, keeping a 5 year trend moving at a steady increase