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Patrick Grubbs headshot

CVS Quit Cigarettes So Americans Would Too—And It Worked

In 2014, CVS pulled tobacco products from its shelves to great fanfare and investors' trepidation. That decision has since paid off in many ways.
By Patrick Grubbs

In 2014, CVS pulled tobacco products from its shelves to great fanfare and investors' trepidation. That decision has since paid off in many ways.

Editor's Note: This story is part of an editorial series featuring companies on CR Magazine's 20th annual 100 Best Corporate Citizens ranking, which recognizes outstanding environmental, social, and governance (ESG) disclosure and performance among the Russell 1,000 Index. You can follow the series here

In September 2014, CVS pulled tobacco products from its shelves to both great fanfare and major trepidation on the part of investors. Looking back at the decision from five years on, it is clear that both reactions were warranted.

The company’s bottom line was affected immediately and severely. Merchandise sales plummeted 8 percent across stores, as well as a further estimated loss of about $2 billion in potential revenue — all from missing out on cigarette sales.

Despite the setback, however, their stock value soared over the next couple of years, rising to more than 140 percent of its value during that September. Investors’ trust, and more importantly, their confidence in the risky move paid off in a big way.

Even more impressive than the financial victory was the tangible effect it had on the U.S. smoking population. In states where CVS had a significant presence, there was a 1 percent drop in cigarette pack sales within a year. While that might not sound like much, it works out to five fewer packs purchased per smoker and a whopping 95 million fewer cigarette packs sold. Meanwhile, other retailers have been playing catch-up.

It’s both fascinating and promising that reducing access to cigarettes caused a measurable decrease in use, rather than just compelling customers to buy them elsewhere. Not only that, but there was a noticeable uptick in nicotine patch sales in the same areas, which indicates the move also inspired people to make an attempt at quitting smoking altogether.

It’s unclear whether this case study has implications for other addictive and easily available substances, but it’s worth looking into. Especially since, as a pharmaceutical retailer, CVS still sells a few of those.

The cessation of cigarette sales wasn’t a one-and-done goodwill effort by CVS. At the same time, the company changed its name from CVS Caremark to CVS Health to represent their new set of ideals and immediately put their money where their mouth is by starting the Be the First initiative.

The goal of the program is to make this generation “be the first” smoke-free generation. To facilitate that goal, CVS earmarked the sizeable sum of $50 million dollars to be spent between 2015 and 2020. For a program with no outside accountability, they’ve done a surprisingly good job staying on target, disbursing $10 million each year in the form of grants, non-profit partnerships, and scholarships.

Be The First has focused its efforts on preventative measures, targeting both primary and secondary schooling with resources and programs designed to convince children and young adults to avoid even the near occasion of smoking. It’s been undeniably successful, too. Even the CDC said that CVS was a significant contributor to reducing the youth smoking rate to 8 percent, an all-time low.

Anti-smoking isn’t CVS’s only angle, and it’s been evident that they’ve ramped up efforts across several facets of corporate social responsibility. It devoted $5.3 million to free health care services through Project Health in 2018 alone, it was ranked highly in a list of diverse and inclusive companies, and they diversified their suppliers to create jobs and economic opportunity.

Importantly, CVS recognizes that personal health is heavily influenced by community health, and that’s why it launched the Building Healthier Communities initiative at the beginning of 2019. This audacious program will be investing $100 million in a five-year timespan comparable to the Be The First initiative.

A driving force in Building Healthier Communities will be the resources and people CVS acquired in their recent merger with Aetna. The program has the following goals:

  1. Improve local access to affordable quality care by providing low-cost or free health services in underserved and uninsured communities.
  2. Impact public health challenges such as the opioid crisis and youth smoking by partnering with and funding relevant organizations and programs.
  3. Partnering with local communities through both volunteering man hours and funding local organizations.

Hopefully the Building Healthier Communities initiative sees success similar to that of Be The First. It has the potential to be an impactful agent for positive change in community healthcare and could serve as a powerful role model for other companies trying to engage and serve their communities.

Image credit: Tim Savage/Pexels

Patrick Grubbs headshot

Patrick Grubbs is an environmental writer with a keen interest in the interactions between people and ecosystems. Past work includes projects to integrate permaculture into architecture, community education of urban agriculture, and published research in aquatic ecology. He is currently based in Philadelphia, but spends most of his time traveling abroad.

Read more stories by Patrick Grubbs