The Devil's Playbook: Big Tobacco, Juul, and the Addiction of a New Generation
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Big Tobacco meets Silicon Valley in this gripping exposé of what happened when two of the most notorious industries collided—and the vaping epidemic was born.
“The best business book I’ve read since Bad Blood.”—Jonathan Eig, bestselling author of Ali: A Life
Howard Willard lusted after Juul. As the CEO of the parent company of tobacco giant Philip Morris, he believed the e-cigarette had all the addictive upside of the original without the same apparent health risks and bad press. Meanwhile, Adam Bowen and James Monsees began working on a device meant to destroy Big Tobacco but ended up baking the cigarette industry’s DNA into their invention. Juul’s e-cigarette was so effective that it put the company on a collision course with Philip Morris, sparking one of the most explosive public health crises in recent memory.
Award–winning journalist Lauren Etter tells a riveting story of greed and deception in one of the biggest botched deals in business history. Willard was desperate to acquire Juul, even as his team sounded alarms about the startup’s reliance on underage customers. Ultimately, Juul’s executives negotiated a deal that let them pocket the lion’s share of Philip Morris’s $12.8 billion investment while government regulators and furious parents mounted a campaign to hold the company’s feet to the fire.
The Devil’s Playbook is the inside story of how Juul’s embodiment of Silicon Valley’s “move fast and break things” ethos wrought havoc on American health, how a beleaguered tobacco company was seduced by the promise of a new generation of addicted customers, and how Juul’s founders, board members, and employees walked away with a windfall.
ISBN-13: 9780593237984
Media Type: Hardcover
Publisher: Crown Publishing Group
Publication Date: 05-25-2021
Pages: 496
Product Dimensions: 6.00(w) x 9.30(h) x 1.80(d)
Lauren Etter is an award-winning investigative reporter at Bloomberg News, where she writes in-depth corporate features and investigative stories for Bloomberg Businessweek. Previously she was a staff reporter at The Wall Street Journal, and she has written for Vanity Fair and The New Yorker. She holds master’s degrees in journalism and in law from Northwestern University. Etter lives in Los Angeles with her husband and three children.
1Read an Excerpt
The Quest
Youth comes but once in a lifetime.
—Henry Wadsworth Longfellow
Long before the dream of a perfect e-cigarette was a gleam in the eye of Howard A. Willard III—and before, as Altria’s CEO, he would make a $12.8 billion investment in an e-cigarette start-up that addicted millions of American children to nicotine—the lifelong tobacco executive held one of the most paradoxical jobs a tobacco executive could have: He was head of Philip Morris’s Youth Smoking Prevention program. On its face the job was a study in cognitive dissonance. Willard was supposed to help convince the very same people that Philip Morris once viewed as future customers that, in fact, buying his company’s product was a bad idea.
It was a testament to the awkward position in which the tobacco industry found itself, in the early 2000s, that the company was running a program to discourage youth smoking. And yet the program was a crucial down payment on the price of staying in business. De-normalizing smoking, particularly among youth, was the driving heart of the Master Settlement Agreement, which not only banned tobacco companies from sticking their products in movies and on billboards but forbade them from advertising cigarettes to children in any way. No more Joe Camel backpacks, or Marlboro Man T-shirts. By foreclosing tobacco companies’ ability to deploy its bottomless ad budgets, slick marketing, and iconic imagery to reach adolescents, the core demographic once referred to by tobacco executives as “replacement customers,” the legal settlement ushered in a new era for the tobacco industry that proved to be nothing less than tectonic.
Philip Morris didn’t start the youth prevention program out of pure altruism. The tobacco settlement required the signatory companies to “promulgate or reaffirm” a set of “corporate culture commitments” related to youth smoking, and also to “designate” an executive devoted to reducing the consumption of youth tobacco use. Moreover, the company’s Youth Smoking Prevention program was a good look in a moment when the company’s legal issues were far from fully resolved. In the spring of 2000, as a jury in a Florida class-action lawsuit weighed whether to award plaintiffs billions of dollars in damages, the then Philip Morris USA chief executive, Michael Szymanczyk, took the witness stand and testified about the company’s new youth prevention efforts in a bid to persuade the jury to go easy on his company. It was critical for Philip Morris to demonstrate to regulators and courts and lawmakers that it was committed to being in “alignment” with society writ large, and willing to sacrifice the pipeline of future smokers for the greater good, not an easy feat for a company that sold Marlboro, the most popular brand among high schoolers.
Serving as the company’s face in this effort was a job that required a particular kind of company man—equal parts aggression and ambition, with an iron-fisted devotion to his maligned employer. Howard Willard was that kind of company man.
The son of a restorer of historic homes and grandson of an antiques salesman, Willard was raised in the quaint town of Wethersfield, Connecticut, an old Puritan settlement and seaport for local farmers and merchants who sent their flaxseed and red onions to the West Indies. With a tousled head of curls and studious glasses, Willard fit in among the clubby circles of the Northeast. He graduated from Colgate University, the preppy liberal arts school nestled in the rolling hills of upstate New York’s dairy country, where he studied computer science and economics. He received an MBA from the University of Chicago, one of the top business schools in the country.
Willard learned early on what it took to be a Master of the Universe. In 1985 he got a job as an analyst working mergers and acquisitions at Salomon Brothers, the storied, now-defunct Wall Street investment bank that fell from grace during a bond-trading scandal and became the basis of Tom Wolfe’s novel Bonfire of the Vanities and Michael Lewis’s insider account in Liar’s Poker. He then moved to Bain & Company, the consulting firm, where in 1991 one of the accounts given to him was Philip Morris USA. Willard was impressed with the talent of the management at the cigarette company. The following year, in November 1992, when Philip Morris’s CFO, Harry Steele, offered him a job, he took it.
With his gangly six-foot-six frame and goofy smile, Willard stood out at Philip Morris. One former executive described the younger Willard as a spitting image of the actor Judge Reinhold from when he starred in Fast Times at Ridgemont High. Even though he had an affable salesman’s personality, he wasn’t a natural extrovert. His loud guffaws and jokes sometimes seemed strained, almost deliberately designed to fit into the backslapping, good-old-boy culture at the rough-and-tumble cigarette company. Another colleague described him as a little like Eddie Haskell from Leave It to Beaver. “That’s the vibe that pops into my head. Like, ‘You look lovely today, Mrs. Cleaver,’ ” remembered the former executive, adopting the television character’s ingratiating voice. “He was always nice. And well liked. But I would not say dynamic in any way. And not assertive. He would speak when spoken to.”
It was perhaps Willard’s willingness to please, combined with his technical acumen, that allowed him to thrive among the ranks of Philip Morris’s rigid, hierarchical culture that prized people who fell in line and respected authority. In April 1995, an internal career planning document extolled Willard’s accomplishments, noting that he “demonstrated comprehensive strategic planning skills” and “leads by personal demonstration.”
In his Midwest VP sales position, Willard emerged as a loyal company soldier, personally writing letters to clients urging them to donate to the company’s political action committee and to contact their lawmakers to express displeasure with pieces of legislation that might be detrimental to the cigarette business. “Once the FDA gets its foot in the door,” Willard wrote in one letter, “there is little doubt it will quickly move in the direction of banning tobacco products.” That public-policy role served as a natural segue into a job as vice president of information services, before he was eventually put in charge of the company’s new e-commerce division.
Working at a tobacco company has never been for the faint of heart, and it’s long had a way of toughening people up. Michael Szymanczyk, chief executive of Philip Morris USA through the turn of the century, once recalled when anti-tobacco activists showed up at his home in Connecticut just before Christmas and hung a wreath laced with cigarette butts on his front door while singing crude Christmas carols. Even though his wife’s feelings were hurt, he was unmoved: “I can’t be distracted by people like that,” he said.
Willard ultimately never got distracted, and as a result of finding his rhythm early on at Philip Morris he powered through promotions faster than others. Ultimately he was named a member of the Philip Morris senior leadership team, and, starting in September 2000, he began reporting directly to Szymanczyk. That meant Willard was learning from the best. Szymanczyk was a well loved, preternaturally gifted executive whose towering physique at six feet eight inches was only outmatched by his booming voice, which seemed to overpower anybody in his orbit. Szymanczyk had a successful career at Procter & Gamble before going to Kraft and ultimately landing at Philip Morris as a seasoned executive in 1990. He was named CEO of the domestic cigarette company in 1997 just as the Tobacco Wars were getting under way. Like his boss Geoffrey Bible, Szymanczyk had the fight of a bull elk in him and was imbued with more than a fair share of confidence. He was always the first to speak up in a meeting, leading some people to call it for what it was: arrogance. But his business acumen largely forgave any conceit.
Szymanczyk took Willard under his wing. The up-and-coming executive so revered his mentor that people at the company jokingly took to calling him “Little Mike.” But Willard, who retained the Judge Reinhold aura, never quite matched his boss’s je ne sais quoi. While Willard also was a member of the tall club, he was still at least a couple of inches shorter than Szymanczyk. And while Willard also was always the first to speak in a meeting, he often came across as a brash know-it-all rather than an enlightened manager. But he had promise, and ambition; that much was evident early on.
Willard’s rise coincided with Philip Morris’s compulsory reawakening that Parrish had engineered and Szymanczyk drove home. In October 1999 the company launched its first website, which as vice president of information services Willard had helped oversee. On it, Philip Morris for the first time publicly acknowledged that cigarettes not only caused lung cancer but were also addictive, stunning public-health advocates who’d been screaming that exact truth into the void for years. “Integrity, trust, passion, creativity, quality and sharing,” the website said. “They’re the values that guide us as a business and as individuals.”
Prologue: On the Side of the Angels ix 1 The Quest 3 2 The Good Guys 19 3 The Cigarette Maker's Dilemma 39 4 On the Hunt 61 5 A New Mark 83 6 A Juul is Born 101 7 A Calgary Stampede 120 8 A Courtship 137 9 Buzz Factor 149 10 The Experiments 163 11 Move Fast. Break Laws 172 12 A Nicotine Compromise 190 13 Project Tree 200 14 Atherton 219 15 Plan A 239 16 San Francisco Strikes Back 252 17 The Juulionaires 269 18 The Takeover 295 19 Panic 319 20 The Bellagio 329 21 A Bloodbath 352 22 Veni Vidi Vici 377 Afterword 397 Acknowledgments 405 Notes 411 Index 453Table of Contents