THE R. J. REYNOLDS FAMILY – CHAPTER 4 CAMEL CIGARETTES AND RJR’S LEGACY

Cigarette smoking was growing due to societal changes and rising public health concerns about tuberculosis and the harmful effects of chewing tobacco. RJR accurately assessed the shifting market. The timing for Camel cigarettes could not have been better. By late 1912, RJR was buying cigarette machines. In 1913, he introduced Camel to the public. Before then, Turkish cigarettes were virtually unknown in the United States. RJR found a way to make the exotic appeal and distinctive flavor of the Turkish blend affordable to the masses.

Why RJR chose the Camel name is still uncertain. In 1912, the Barnum and Bailey Circus arrived in Winston while the marketing department was debating what kind of camel image would sell the product. RJR’s secretary raced to the big top with a photographer to capture an image of a dromedary named Old Joe. When the handler slapped the animal to get its attention, the camera man snapped a picture recognized the world over even today—a one-humped “camel” with tail and head raised, ears flat against its head, and eyes tightly shut.

Camel's launch marked a breakthrough in marketing strategy. RJR's focus on national distribution created economies of scale and extensive availability, leading to massive sales. The bold decision to eliminate coupons emphasized the superior quality of the Camel blend.

In 1913, the Camel advertisements started a revolutionary trend in advertising: the "teaser" campaign. The first ad simply showed a camel and mentioned the name -without mentioning the product. A week came "The Camels Are Coming," and a week after that, "Tomorrow there'll be more CAMELS in this town than in all Asia and Africa combined!" Only in the fourth ad was the product disclosed: "CAMEL Cigarettes Are Here!"

During the first year, Camel sales were 400 million cigarettes. Sales skyrocketed the next year to 2 billion. With two winners, Prince Albert and Camel, RJR Tobacco - and its principal owner - were fast closing on the big three cigarette companies.

Camel’s success displayed RJR's keen understanding of consumer preferences, marking an evolution in the tobacco industry. During World War I, Camel became popular among American soldiers, strengthening the link between tobacco and the military culture.

RJR's strategies influenced both smoking habits and cultural attitudes toward tobacco, making cigarettes part of 20th-century American identity, despite growing opposition. He understood the power of marketing and the draw of nicotine, though he warned his children against smoking.

Reynolds Tobacco employed 10,000 people and operated multiple plants and storage facilities. Its bold national advertising campaigns, with Prince Albert and Camel, drove massive sales. RJR’s ability to read market trends ensured the company's rapid growth and dominance in the industry. Cigarette addiction among World War I soldiers gave Camel a huge boost.

Camel’s annual output, laid end to end, could stretch to the moon and back. In 1917, RJR earned so much that he paid the highest personal income tax in North Carolina, double that of any other individual.

RJR died in 1918, age 68, in his home. Death was attributed to pancreatic cancer. His death marked the end of an era for the company.

The towns, Winston and Salem, merged in 1912. RJR had transformed them. This city of nearly 20,000 people led the world in per capital tobacco product production. It was also the South’s largest producer of fine knit goods and a key center for making wagons and furniture. The city surpassed Atlanta as the largest railroad shipper in the South.

Unlike most industrial titans, RJR made his money without crushing smaller competitors. His buyouts were always managed with dignity. He competed fiercely with his rivals, but ethically and within the law. His greatest business failing was that he, like most industrialists, underpaid his factory workers. However, unlike most of the titans, he was generous to those he considered his peers - particularly his management team. Almost alone among the giants, RJR made his relatives, friends, and top employees millionaires. He invested his money and contributed to charities close to home, increasing the prosperity of Winston-Salem and North Carolina with a lasting impact.

RJR’s legacy of innovation and bold business tactics took his company to great heights. His leadership and vision continued to shape the company long after his passing. As a leader, he was nimble and creative. He surrounded himself with top-tier officers, ensuring long-term success. His pragmatic approach to employee relations, and his innovative business strategies, left a lasting mark on both Winston-Salem’s development and the tobacco industry.

The estate included an estimated $11 million in 51,000 shares of RJR “B” stock and $6 million of other securities and real estate. This $17 million (C$325 million) passed to Katharine and the four children (in trust) in 5 equal parts.