REYNOLDS TOBACCO’S G-7 PROCESS - TURNING GARBAGE INTO GOLD

BACKGROUND

RJR’s Vice President of Human Resources was dedicated to the tobacco business – its employees, its culture, and its profitability. He was not a fan of the board members because he believed that many of them did not appreciate tobacco. Over a coffee before work one morning, he said, “A man named Sam Jones has contributed more profit here than all the directors combined.” I had never heard of Sam Jones.

ORIGIN OF G-7

A long-standing goal for RJR was to create reconstituted tobacco, also called “processed tobacco.” As much as 35% of a tobacco leaf was a stem that was not useable. It is not clear when the company began its search for a way to use the leaf stems, scrap tobacco, and tobacco dust. RJR himself showed an interest as early as 1910 and perhaps named it “G-7.” Interest continued in the 1920s. By the 1930s, Reynolds was spending considerable time studying the process.

John C. Whitaker, later destined to become CEO, was the driving force behind the search. He identified a talented young man to head an R&D project. Samuel O’Brien Jones had studied for a year at Davidson College and then transferred to NC State where he majored in engineering and chemistry. Graduating in 1932, Reynolds granted him a fellowship for four years at Johns Hopkins University. Starting in 1933, he worked each summer at RJR until he received his PhD in chemistry in 1936. The investment in Dr. Jones' education would yield the highest return of any money the company ever spent.

Whitaker's stated goal for Jones: reduce manufacturing cost without sacrificing quality.

LONG TERM RESEARCH & DEVELOPMENT

The project took years. In 1938, after two years of work, the process could produce leaf suitable for smoking tobacco but not for cigarettes.

In 1946, the R&D people took a new approach, imitating the paper making process. The G-7 people borrowed a book from the public library about paper making. They devised a plan using the Fourdrinier process and made a limited amount of processed tobacco. When John Whitaker smoked the tobacco, he liked it and launched a major campaign.

Making processed tobacco was more difficult than making paper because the tobacco fibers were shorter than the pulp wood fibers used in making paper. The process also removed the nicotine from the tobacco, and it had to be sprayed back in. Contrary to later hostile press reports, only the amount of nicotine removed was replaced. The tobacco was not “spiked” with extra nicotine.

RJR opened a pilot plant in 1947. Researchers got help from Ecusta Paper, the cigarette paper manufacturer. By 1948, sheets of reconstituted tobacco could be cut as easily as the natural tobacco.

The process still needed refinement, and it was not until January 1950 that a machine provided excellent quality. In June, reconstituted tobacco was first used in cigarettes. The R&D work was done in a limited facility, but it was successful, and RJR built a modern research facility and a plant to produce 10,000 pounds of the reconstituted tobacco a day, 2 1/2 million pounds a year.

Jones recommended that RJR not patent G-7, fearing that would give away more than it could protect. All RJR people were warned not to discuss this new process, and for a long time, it remained top-secret. Dr. Sam Jones rose to legendary status within the company.[i]

THE GIANT PAYDAY

At the peak use of tobacco, RJR operated three plants, each making 50 million pounds of reconstituted product a year. The cost was less than $.50 a pound to turn scraps into a product that sold for $3.00 a pound. Savings on the 150 million pounds was $375 million every year for many years.

Also, RJR licensed the process to other tobacco companies around the world and had a staff that showed them how to set it up.

GLENN MOSER – THE QUIET GENIUS

In 1968, I worked briefly with a key figure in the success of G-7, Glenn Moser. He was a quiet, unassuming man who never mentioned his R&D work. I learned later that he had been a star student at North Carolina State and was a mathematical genius.

Glenn’s widow, Wanda Moser, recalled “a fun evening” for Glenn decades ago. They attended a dinner in honor of a new G-7 pilot plant. “The facility was state-of-the-art, “all stainless-steel pipes controlled by computers.

“Glenn stood patiently, saying nothing, listening to a young man explain to him the G-7 project. Little did the young man know that Glenn’s personal files contained detailed documents on his years of work on puffed tobacco. During dinner that night Dr. Sam Jones, came by our table and tapped Glenn on the shoulder and asked, ‘Do you remember when we carried this stuff around in buckets?’  They got a chuckle out of their memories.” [ii]

FORTITUDE

The return on investment for G-7 is immeasurable. But it must be credited to a group of resolute chemists and engineers and an executive who was willing to back their efforts for more than 20 years before they succeeded.

[i] Tilley, Nannie M. The R. J. Reynolds Tobacco Company. Chapel Hill: University of North Carolina Press, 1985. Pp. 488-89

[ii] Wanda Moser, 2020.