25 May 2021
Sheelah kolhatkar, Source: New York Times
THE DEVIL’S PLAYBOOK
Big Tobacco, Juul, and the Addiction of a New Generation
By Lauren Etter
Beginning around 2017, upper-middle-class parents who already had the threat of online bullying, screen addiction, drugs, alcohol and college admissions to worry about were confronted with a new menace to their children’s health and happiness: a small, sleek metallic gadget that could be sucked on and then hidden away in just a few seconds. These devices were spreading through middle and high school yards and bathroom stalls at an alarming rate.
Resembling a USB drive crossed with a crack pipe, the Juul is an electronic nicotine delivery system that contains fewer chemicals than cigarettes, allegedly making it less harmful. It emits an odorless vapor, rather than smoke, and leaves none of the foul ashtray residue of a cigarette. The most ingenious feature was the array of flavors the liquid nicotine pods came in, ranging from mango to mint to crème brûlée, which made them especially appealing to teenagers.
The founders of Juul, the company that invented the namesake product, said they wanted to have a positive impact on the world by helping longtime smokers quit cigarettes in favor of their cooler, tech-ier, less carcinogenic product. They hoped this mission would help protect them from the legal and political pressure and public scorn that had been heaped on the major cigarette makers for decades.
Juul’s co-founders, Adam Bowen and James Monsees, met as product design graduate students at Stanford University and set out to challenge the tobacco industry in the mid-2000s by designing an electronic cigarette as their final thesis project. As Lauren Etter recounts in “The Devil’s Playbook,” her deeply reported and illuminating book about the company’s ascent, their stated focus on reducing harm to smokers turned out to be little more than a clever marketing line attached to an aggressive company with ambitious goals for turning a profit.
By interspersing the narrative of Bowen and Monsees’ innovative start-up with the story of Altria (formerly known as Philip Morris, the makers of Marlboro cigarettes), Etter shows us how Juul emulated other Silicon Valley companies by barreling into new markets with little regard for the rules and in many ways came to resemble the same reviled Big Tobacco companies it was trying to disrupt. This is not a short book, nor an easy read; so many characters, details and side-trips are packed into its over 400 pages that it overwhelms at times. Still, there is a rich narrative that rewards patience. The story of Juul’s rise and fall teaches us something about greed, capitalism, policy failure and a particular cycle in American business that seems destined to repeat itself.
By the time Juul was introduced in 2015, the tobacco industry had been in an ongoing existential battle for decades. It began in 1953 when two scientists published a groundbreaking study connecting smoking with cancer, showing how lab mice, when painted with cigarette tar, grew tumors on their backs; in the 1970s, a zealous antismoking movement that started in San Francisco spread cross the world; and by the 1990s whistle-blowers were exposing the ways in which tobacco companies had been covering up the deadly health hazards of smoking. In 1998, major cigarette manufacturers signed a so-called Master Settlement Agreement with 46 state attorneys general and were required to pay billions of dollars to cover smoking-related health care costs. They also committed to taking aggressive steps to discourage young people from picking up the habit — the year before, 40 percent of high school students were reported to be smoking cigarettes, more than ever before.
Many years later, the founders of Juul started up their company as if they were unaware of all this fraught background, but Etter shows that they actually studied the tobacco companies’ business and legal history in detail. In presenting their electronic cigarette design to their Stanford classmates, Monsees referenced a confidential internal document from the 1980s belonging to the tobacco company RJ Reynolds about a “reduced-harm cigarette” it had tried, and failed, to develop called “Project Spa.” From this and other research, Monsees said, they learned that “vaporization is awesome.”
He and Bowen picked up right where traditional tobacco companies like RJ Reynolds had given up, designing a battery-operated vaporizer that looked like an Apple product and converted liquid nicotine into a vapor that the user inhaled. This process allows the nicotine to be absorbed into the body within seconds, making it potently addictive.
E-cigarettes existed in a regulatory gray area. “Imagine walking up to what appeared to be a locked gate with piles of gold behind it. And then imagine the surprise when upon pushing on the gate, it swung open,” Etter writes. “That’s what happened with e-cigarettes. And when it did, people just started running through the gate and stuffing their pockets with gold, as fast as they could before they got kicked out.”
While the tobacco industry was one of the most heavily regulated in the country, the e-cigarette market was like the Wild West, with no rules dictating how the industry could advertise or to whom it could sell its products. Vaping ads started appearing in magazines, on television and all over social media. Juul was one of the savviest marketers, blanketing Instagram and convenience store windows with pictures of young people partying with Juul devices in their hands.
The use of e-cigarettes exploded and Juul quickly swallowed up more than 50 percent of the market. All the while, the traditional tobacco companies watched with a combination of resentment and envy. The decline of cigarette smoking among teenagers over the previous two decades had been regarded as a victory among public health officials; vaping suddenly became immensely popular among that same group, particularly in wealthier neighborhoods. At the end of 2018, the two story lines in Etter’s book converge when Altria buys a 35 percent stake in Juul for $12.8 billion.
The investment was poorly timed. After studies showed that almost a third of American high school students and 10 percent of eighth graders were using e-cigarettes, concern about teen vaping grew into a national hysteria. There were hundreds of lawsuits filed by people claiming they’d suffered lung damage and other negative health effects, and a congressional investigation was launched into Juul’s alleged targeting of young people, which Juul denied (a 2020 lawsuit claimed Juul bought ads on the children’s websites Nickelodeon and Cartoon Network in 2015 and 2016). The company has pulled all of its fruit and dessert flavors from the market, and the Food and Drug Administration is deliberating about whether it will be allowed to continue selling its products at all.
Perhaps the most fascinating, and darkly comedic, anecdote in “The Devil’s Playbook” comes when Juul meets some of its fiercest critics: several wealthy California financiers who become incensed when they learn that their own kids and their kids’ friends are Juuling.
One of the parents, a private equity and hedge fund manager named David Burke, wrote a LinkedIn message to Juul’s C.E.O., Kevin Burns, who lived in the same Bay Area town, Atherton — known as the richest ZIP code in the United States. Burke was angry — and used the language to convey it — that Juul had gotten these kids hooked on nicotine. “From here on out, I’m going to go out of my way to fight,” he wrote. And he promised to be “more than vocal about it.” He went on to compare Juul to Purdue Pharma, the company that developed OxyContin, which helped create the opioid crisis. “I have deep ties in the investment world and am from Washington, D.C., and have deep ties there, all of which I will leverage to the max,” Burke continued. “You’ll have a beautiful, proud legacy for you and your family to celebrate in future generations.”