[Congressional Record Volume 143, Number 110 (Wednesday, July 30, 1997)]
[Extensions of Remarks]
[Pages E1559-E1560]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
[[Page E1559]]
R.J. REYNOLDS STILL TARGETS OUR YOUTH AND YOUNG ADULTS
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HON. HENRY A. WAXMAN
of california
in the house of representatives
Wednesday, July 30, 1997
Mr. WAXMAN. Mr. Speaker, I rise today to share with the Members of
this House an article that appeared in the May 28, 1997, edition of the
Cleveland Free Times concerning R.J. Reynolds' new strategy to lure
young people to smoke Camel cigarettes.
Given the retirement of Joe Camel, you may have thought that RJR was
going to put an end to its promotional campaign aimed at our kids. But
this Cleveland Free Times article discloses that R.J. Reynolds has
developed a multimillion-dollar cigarette marketing campaign that
targets bars and clubs frequented by youth and young adults. The goal
of the program is to create an alternative marketing campaign and
cigarette distribution network that operates under the radar. The
campaign's targets include clubs--some of which are all-age concert
clubs--and coffee houses. In exchange for cash, these bars and clubs
give RJR exclusive rights to promote and sell Camel cigarettes in their
establishment. As part of this promotion strategy, RJR-paid personnel
mingle in the clubs to associate Camel cigarettes with what is cool.
This insightful Cleveland Free Times article gives us fair warning
that the tobacco industry will continue to use its own particular
marketing genius to target our kids. This must be foremost in our mind
as we begin to consider tobacco legislation and how we can best achieve
our goal of reducing the deadly toll exacted by tobacco on the people
of our country.
Mr. Speaker, I ask that the full text of the article be printed in
the Record so that my colleagues may have an opportunity to read about
RJR's club marketing strategy.
Camel Clubbing
(By Mark Naymik)
They do not wait in lines, show IDs, pay cover charges or
purchase concert tickets to gain access to Cleveland's most
popular bars and clubs. Once inside these venues, they are
treated like low-budget celebrities, sometimes drawing a
small crowd, several handshakes, and admiring nods from bar
and club staff members.
They are Cleveland's Camel Club kids, a small group of
twenty-something clubgoers, including Twig, Sheff, Ma-Ma,
Frankie Boy and Don Vega, as they are known.
On most nights, these fashionable men and woman, each armed
with a black canvas bag filled with Camel cigarettes, slip in
and out of more than thirty area bars and clubs, from the
Grog Shop, a small East side concert club, to the Phantasy,
Lakewood's industrial-music dance club, to Ufia, Cleveland's
largest gay club located on the West Side. Their job: blend
in with the bar and club patrons, make friends with the bar
staff and offer smokers free Camel cigarettes, R.J. Reynolds'
premium brand.
These Camel Club kids should not be compared to those
candy-striped cigarette girls or miniskirt-clad alcohol
peddlers, who attract a lot of attention but can be more
annoying than effective in enticing bar patrons to try their
product. Camel Club kids look like they belong. They are R.J.
Reynolds' ambassadors of cool. And they are the front-line
workers in a relatively new, multimillion-dollar cigarette
marketing campaign known as the Camel Club Program.
The goal of the Camel Club Program--beyond the obvious aim
to increase sales of Camel cigarettes--is to create an
altenative marketing campaign and cigarette distribution
network, one that will not be affected by changing federal
regulations or the scores of tobacco-related lawsuits
clogging the courts. In other words, R.J. Reynolds wants to
create a sales program that no longer relies on Joe Camel,
obnoxious givaways and promotions, or even vending machines
to move its smokes.
Cleveland is only one of about a dozen cities in which R.J.
Reynolds has begun to market its cigarettes through bars and
clubs frequented by the twentysomething smoking crowd.
A Free Times examination of the Camel Club Program in
Cleveland reveals that R.J. Reynolds already has a near
monopoly on the sale of cigarettes in most of Cleveland's
bars and clubs that cater to young crowds. R.J. Reynolds
created this monopoly by spending more than $120,000 on
marketing agreements with club owners, who, in turn, give
Camel Club kids exclusive access to their establishments.
R.J. Reynolds also has targeted coffeehouses--havens for
young smokers--and concert clubs that feature all-ages
shows.
Money For Nothing
Several months ago, representatives from R.J. Reynolds and
KBA Marketing, the young and progressive Chicago-based
marketing firm that manages the Camel Club Program, came to
Cleveland in search of trendy bars, restaurants, coffeehouses
and concert clubs. About forty area nightspots made the
scouting team's hit list.
Next, KBA hired two Cleveland clubgoers with a knowledge of
the city's nightlife scene and rented for them an office in
the Bradley Building in Cleveland's Warehouse District. These
clubgoers became KBA's Cleveland ``city managers.'' Their job
was to contact club owners on the hit list and sign them to a
one-year contract giving R.J. Reynolds exclusive rights to
promote and sell Camel cigarettes in their establishments.
By mid-February, the city managers easily signed thirty
bars and clubs to the program. Bar and club owners would have
been foolish not to sign. First, R.J. Reynolds offered them
cash, between $1,000 and $18,000, depending on the club's
size and traffic flow. For instance, the Drip Stick, a sleepy
coffeehouse in the Warehouse District, received $1,000, while
the Odeon, a concert club that features local and national
rock and alternative acts, received $17,800, according to
club industry insiders. R.J. Reynolds puts no restrictions on
how the money can be used.
On top of the cash, R.J. Reynolds agrees to supply the bar
owners with Camel beverage napkins, ashtrays, personalized
matchbooks and bar paraphernalia like neon lights, a
marketing tactic similar to promotions traditionally done
with beer and liquor products through local distributors.
R.J. Reynolds also buys regular full-page advertisements in
an entertainment publication in each city to collectively
promote the clubs and helps in the printing of expensive
glossy flyers featuring their concerts and special events.
After the city managers signed the Cleveland bar and club
owners to a contract, they arranged a meeting with staff
members of each venue to outline what they would get out of
the program.
Every bar or club staff member who smokes receives free
Camel cigarettes, usually a couple of packs, each time a
Camel Club kid visits. The staff receives Camel promotional
items like Zippo lighters, MagLite flashlights, T-shirts and
hats. In return, R.J. Reynolds expects these bar staffers to
promote Camel cigarettes by smoking Camel products while they
work, and by displaying individual Camel cigarettes behind
the bar. ``You notice more people asking to purchase
cigarettes from you, increasing your tips.'' the city
managers are supposed to tell the bar staff at their
orientation meeting, according to KBA marketing materials.
Death Of Vending Machines
Another goal of the Camel Club Program is the elimination
of vending machines, which display competitors' cigarettes,
such as Philip Morris' Marlboro brands. To do this, KBA's
city managers encourage bar and club owners to discontinue
selling cigarettes in vending machines, and instead,
exclusively sell Camel cigarettes displayed in small lighted
kiosks placed behind their bars. Nearly all of the bars and
clubs in the program have placed Camel kiosks, which hold
forty packs of cigarettes, behind their bars. Here, too, R.J.
Reynolds' sales pitch was hard to refuse: Eliminate the
cigarette and vending machine distributors--the middle men--
and pocket more cash.
Using vending machines, bars and clubs earn roughly between
25 and fifty cents on a pack of cigarettes that retails in
the machine for about $2.75. R.J. Reynolds charges the clubs
$1.52 per pack. So clubs that sign on with R.J. Reynolds can
earn 97.5 percent profit on a pack of cigarettes that retails
for $3 behind the bar. That's $60 profit every time they
empty a kiosk. R.J. Reynolds also offers better service than
traditional vendors. The Camel Club kids are on call to
service the kiosk at all hours. If, for example, the club
runs out of cigarettes in the middle of a concert, the bar
manager can call one of the club kids, who will deliver fresh
packs immediately.
If a bar owner has a pre-existing contract with other
cigarette companies and vending machine distributors, R.J.
Reynolds expects the bar's owner to request from the vending
machine operator that it ``convert the top 11 columns'' of
the machine to Camel brands.
New FDA regulations that will take effect later this summer
prohibit all bars, clubs and restaurants that serve patrons
under 21 from selling cigarettes in vending machines. By
getting club owners to agree now to sell Camel exclusively,
R.J. Reynolds is effectively locking out other cigarette
makers from entering the bar when the regulations take
effect.
The ``Under the Radar Approach''
KBA launched the Camel Club Program in late 1994 in
Chicago, and quickly introduced
[[Page E1560]]
it into New York, Dallas and Los Angeles. The Camel Club
Program's style has a lot to do with KBA and its founder,
Kevin Berg, a former club owner.
Berg does not hire ``suit and tie'' corporate types; he
hires men and women who have nightclub experience and who are
on the cutting-edge of fashion and pop culture. People with
such experience and style are easily accepted into the club
scene and carry far more ``credibility'' than the often stiff
corporate cigarette representative.
Twig, for instance, on a recent visit to the Odeon concert
club, wore thick, black-rim, retro-styled glasses, a leather
coat that hung below his waist, wide-leg blue jeans, and red
shoes. His demeanor was relaxed, as he made little effort to
distribute the cigarettes. He gave a few packs of Camel
cigarettes to Odeon staff, laughing with them as if he were
an old fraternity buddy. He then took a seat for the show.
During a recent visit to the Brillo Pad, a dimly lighted
lounge with a soothing beat, Camel Club kid Don Vega walked
behind the bar and served himself an orange juice, passed a
few packs of cigarettes to friends and the bartender, played
a game of chess with the owner, and left.
Being associated with a ``cool'' scene is the image R.J.
Reynolds wants to build. ``By operating in the nightlife
scene, the objective is to directly reach trend influencers,
the people that start and maintain trends. Our association
with trend influencers * * * will have a lasting impact on
clubgoers who will begin to associate Camel with what is
`cool' '' reads KBA's marketing material.
KBA believes by using the Camel Club kids and ``interacting
with the club patrons using a low-key, under the radar
approach, is our best way to establish that we understand and
are a part of the scene.''
Once in the scene, Camel Club kids, who are paid hourly and
typically work 4 to 6 hours a night, try to convert smokers
to Camel by offering smokers fresh, full packs of Camels in
exchange for their remaining non-Camel cigarettes. In return,
the smokers are supposed to fill out an address card, known
as the ``name generation'' card, which is passed back to R.J.
Reynolds.
According to KBA's marketing plan. ``This personal approach
to selling is designed to, if executed effectively, convert
the smoker to Camel and show the adult smoker that Camel is
`cool' by the way we establish this subtle interchange.''
KBA declined to comment for this story and instead, asked
R.J. Reynolds to respond to the Free Times. R.J. Reynolds did
not contact the paper before deadline.
Big Hair and Bubble Gum
If R.J. Reynolds' stated goal is to influence trendsetters
and be associated with ``cool,'' one has to wonder why KBA
city managers targeted and signed Club 1148, a discotheque in
the Flats.
Club 1148 is anything but hip, the only trendsetters that
hang out here are those left over from the '80s. On a recent
Saturday night, for example, hairsprayed women in tight
frosted jeans flounced around the dance floor as bare-chested
men in vests watched form the sidelines. Many of the club's
smokers chewed gum while they took long, rehearsed drags on
Camel cigarettes.
So why is R.J. Reynolds paying Club 1148 $5,000 for the
right to distribute its cigarettes? The answer may lie in the
club's demographics. The club is open to 19-year-olds. And
while KBA marketing materials state its goal is to ``convert
adult smokers at least 21-years-old,'' R.J. Reynolds needs to
influence existing young smokers because they are less brand
loyal, and therefore, more willing to try and then possibly
stay with Camel cigarettes.
Reaching young smokers is perhaps the same reason R.J.
Reynolds is interested in coffeehouses, which attract young
smokers. Coffeehouses are far more trendy than Club 1148.
The clubs that receive the most money from R.J. Reynolds
are the concert clubs, including the Agora, Peabody's
DownUnder, Grog Shop and the Odeon, which often feature all-
ages shows. It also invests heavily in promoting bands on
behalf of these venues. Club tie-ins and joint sponsorship of
bands are the cornerstones of the Camel Club Program. This is
R.J. Reynolds' way of reinforcing the message that it is
supporting the ``scene.''
``Camel events are the single most important way that we
leverage our relationship with [Camel Club Program] venues,''
says the KBA marketing plan.
Dan Kemer, senior director of advertising and marketing for
Belkin Productions, the concert promotion company that owns
the Odeon, says the Camel Club Program helps promote artists
he wants to showcase. ``It's another good marketing tool . .
. the biggest bonus to us is the program helps get the word
out on the street,'' says Kemer about the additional
advertising dollars and printed flyers he receives through
the program.
Asked if he thought R.J. Reynolds could reach minors by
promoting all age-shows, Kemer says he uses the program to
tie into events that appeal to an older population, like the
recent Me'shell Ndege'ocello concert.
``It's a great program for us,'' says Kathy Simkoff, who
runs the Grog Shop on Coventry and received $7000 from R.J.
Reynolds. She says the Camel Club Program's primary goal is
to help clubs with promotion, not distribute cigarettes to
patrons. Simkoff says the Camel Club kids have been ``very
careful'' not to distribute cigarettes to minors attending
concerts and she often does not know they are in the club.
``They don't get in your face like the Jagermeister
girls,'' she says, referring to hired models who troll
Cleveland bars, pushing the sweet alcoholic Jagermeister
shooter.
Similarly, John Michalek of Peabody's DownUnder, an all-
ages concert club in the Flats which reportedly received
$9,000 from R.J. Reynolds, says the program helps him promote
shows and he ``has not seen any problems'' with the
distribution of cigarettes to minors.
But anti-smoking groups see the Camel Club Program as a
campaign to attract underage smokers.
``R.J. Nabisco's Camel Club Program is just another
strategy to seduce young people both over and under the age
of 18 to use their deadly product, and is another indication
as to why independent oversight of tobacco industry
advertising and promotion is essential,'' says Lucinda Wykle-
Rosenberg, research director for INFACT, a national corporate
watchdog organization. INFACT is currently sponsoring a
boycott of products made by R.J. Reynolds--which owns Nabisco
foods--because of its cigarette marketing campaigns. Wykle-
Rosenberg says the Camel Club Program is a campaign to get
around anticipated regulations.
What has long upset this group and other dedicated anti-
tobacco groups are the alarming death rates associated with
smoking and the rate of addiction among teenagers. The
Centers For Disease Control says 400,000 Americans die every
year from tobacco-related diseases, and has reported that
smoking rates for students in grades 9-12 increased from 27.5
percent in 1991 to 34.8 percent in 1995. A 1996 University of
Michigan study released in 1996 showed smoking among high
school seniors has increased to the highest level in 17
years. And it is the demographic group, anti-tobacco
advocates worry, that is attracted to such campaigns as the
Camel Club Program.
``It's the Camel blitz,'' says one local bartender and
Camel Club Program participant, who does not smoke. ``The
Camel kiosks are everywhere.''
Editors' note: In the spirit of full disclosure, we want to
point out that the Free Times has run cigarette ads
periodically. But as Mark Naymik's piece demonstrates, our
business policy to accept such ads has had no impact on our
editorial policy.
Area bars and clubs participating in the Camel Club program
include: Agora, Euclid Tavern, Grog Shop, Peabody's
DownUnder, U4iA, Odeon, Phantasy Complex, Club Visions,
Whisky, Wilbert's, 6th Street Under, Galaxy Lounge, Brillo
Pad, Club 1148, Edison's Pub, Lincoln Park Pub, Treehouse,
Market Avenue Wine Bar, Red Star Cafe, Literary Cafe,
Firehouse Brewery, Uptowne Grille, Hi & Dry, The Last Drop,
La Cave du Vin, The Humidor, The Drip Stick, Rhythm Room.
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