Where There's No Smoke

By Nancy R. Gibbs

Just imagine. No more smoke rings. Or ashtrays. Or stale, lingering tobacco odor. Or spilled ashes and crushed butts. R.J. Reynolds Tobacco, America's No. 2 cigarette company, announced last week that it could make a "smokeless" cigarette. "We think we have something here that's on the leading edge," declared Edward Horrigan, the chairman of Reynolds, a division of RJR Nabisco. If all goes as planned, production and test marketing could begin as early as this winter.

The product was designed to mollify nonsmokers, and clean up an industry image that has been tarred by the growing antismoking movement. Horrigan did not actually claim that Reynolds had invented a safe cigarette, only a "cleaner" one. Since the cigarette does not actually burn, he explained, it does not produce some of the compounds in tobacco smoke, like tar, that have been cited as health hazards. But medical experts are not convinced. Says Karen Monaco, a program manager at the American Lung Association: "Anything that you light up and inhale is hazardous to your lungs."

The experimental product is lighted just like a regular cigarette, but the tobacco is not actually burned, only warmed. The tip contains a tiny carbon heat source. When the smoker inhales, the warmed air is drawn across a "flavor capsule" composed of certain ingredients (Reynolds, for competitive reasons, will not identify them) and wrapped in ordinary tobacco. The air then passes through two filters. The first is made of a tobacco blend that is designed to cool the air, and the second is a standard synthetic-fiber filter. There is no smoke twisting upward from the tip, and no ash. The exhaled smoke dissipates quickly, like steam, with no tobacco smell. Once the carbon tip is used up, the cigarette extinguishes itself, in roughly the same amount of time it takes a typical king-size cigarette to burn down.

By pioneering the smokeless cigarette, Reynolds hopes to regain the industry lead it lost in 1983 to Philip Morris, which makes Marlboro. Reynolds, maker of Winston and Salem, now has 33% of U.S. cigarette sales (total market: $15.1 billion), compared with 38% for Philip Morris. But last week's announcement may have been the starting gun in a race for the smokeless market. Philip Morris, along with American Brands, which sells Pall Mall, and Lorillard, the makers of Kent, are all believed to have the technology needed to rival Reynolds.

The new product fired the debate between health officials and the tobacco industry. Since the smokeless cigarette still contains nicotine and gives off carbon monoxide, antismoking activists insist it is as dangerous as ordinary cigarettes. Experts are also concerned about the contents of the flavor capsule. Says Dr. Elizabeth Whelan, executive director of the American Council on Science and Health: "How can they claim they took out the harmful elements when we don't know what causes the harm?"

Reynolds claims the new model improves on the old in some obvious ways. Although not strictly smokeless, the product is designed to reduce the amount of smoke sharply enough to avoid irritating nonsmokers nearby. The familiar litter of discarded cigarette butts would vanish -- although it might be replaced by the litter of entire cigarettes. The heated tip comes wrapped in specially treated paper, so that it is less likely than a regular cigarette to ignite surfaces if it falls.

The industry's rush to clear the air comes at a time of popular backlash against smoking in public places. Leading the charge is Surgeon General C. Everett Koop, who has called for a smoke-free society by the year 2000. Since 1974, 42 states and 1,000 municipalities have moved to restrict smoking in such open areas as restaurants, offices and hospitals.

As smokers have come under fire from all sides, U.S. domestic cigarette sales have been dropping 2% to 3% annually, to 29 billion packs last year. Fewer Americans than ever (55 million, or 26.5% of the adult population) smoke at all. The smokeless cigarette, Reynolds hopes, could help extinguish that trend.

That is just what has critics fuming. If the new cigarette actually satisfies a craving for nicotine without producing the smoke that annoys others, smokers might have less incentive to quit. Nonsmokers, meanwhile, might be just as vulnerable as before, or more so. "Now when someone lights up, you can see and avoid the smoke," says John Banzhaf, executive director of Action on Smoking and Health. "With the new cigarette, which still may give off dangerous chemicals, it will be harder to avoid."

Reynolds' smokeless-cigarette project, code-named Operation Black Hole, was conducted in total secrecy. But word began to leak out before last week's press conference. Amid rumors of a breakthrough, Reynolds stock jumped nearly three points, to 67 3/4, in heavy trading. Once the news was out, Wall Street took a more skeptical view. The new product, analysts agreed, would not boost Reynolds' profits anytime soon, and so its stock price settled back to 64 7/8 at week's end.

Still, some tobacco watchers think the innovation has the potential to transform the industry. Says Marc Cohen, a consumer-goods expert at the Sanford C. Bernstein investment firm: "The $64,000 question is: How will consumers react to it? Will smokers be satisfied? Will nonsmokers be satisfied?" If the answer is yes, the smoggy poker game, and other familiar scenes, could become a thing of the past.

With reporting by Thomas McCarroll/New York and Don Winbush/Atlanta