5 Insights From NATO Forum

By 
Angel Abcede, Senior Editor/Tobacco, CSP

NATO summer tobacco forum

BROOMFIELD, Colo. -- Mitch Zeller, director of the Center for Tobacco Products at the U.S. Food and Drug Administration (FDA), set an upbeat tone for NATO's summer tobacco forum held Aug. 23 in Denver.

During the daylong seminar hosted by the tobacco-outlet organization, everything from digesting the FDA’s new stance on harm-reducing products within the tobacco category to strategizing against flavor bans was fodder for discussion.

Zeller suggested among other things that the dialogue around alternative nicotine-delivery devices like electronic cigarettes is now less restrictive than just six months ago. He credits the FDA’s new commissioner, Dr. Scott Gottlieb, who took on the role in May, and his announced focus on nicotine levels in combustible cigarettes as well as interest in researching the value of moving smokers to less harmful nicotine-delivery devices.

Here are five insights from Zeller and other speakers at the one-day seminar ...

1. Predicate date stands firm

Mitch Zeller

In response to whether the FDA would change the so-called predicate date of Feb. 15, 2007, for grandfathering in new products, Zeller said no. He said that Congress set the date and the FDA has no legal standing to change it. He also said the agency had asked the public to provide legal concepts and arguments for them to consider, but has not received any to warrant a change.

The date is significant because any tobacco products on the market before that date were grandfathered into the FDA’s jurisdiction and spared an onerous and expensive application process for those products to be sold in the United States.

2. Slower foot traffic

Customers

If seminar attendees were noticing fewer customers coming into their stores this year, they’re not alone, according to Bonnie Herzog, managing director of consumer equity research for Wells Fargo Securities LLC, New York.

C-stores in general have been seeing softer foot traffic in recent months. Some of the reasons include promotional activity from other channels, the increasing cost of food consumed away from home vs. food at home, the increase of light trucks that require more fuel and therefore less cash for customers to spend in the store, an increase of online purchasing and a decline in spending and travel from the Hispanic demographic.

3. Challenging menthol restrictions

menthol

Even though ordinances to ban or restrict sales of menthol-flavored tobacco products were approved in San Francisco and Minneapolis recently, measures are underway to prevent them from going into effect, according to Thomas Briant, executive director for Minneapolis-based NATO.

In San Francisco, a signature campaign successfully put the ordinance up for public vote. Now the city’s supervisory board must act on whether to put it on the June 2018 ballot, hold a special election or choose to simply repeal the ordinance.

In Minneapolis, NATO and other stakeholders commissioned a report on the economic hardship of its menthol ban and is about to present it to the City Council. If that fails to persuade the council, Briant says another alternative is to work a repeal into the city’s budgetary process.

4. The rebirth of vaping?

e cig

While convenience-store retailers had a decidedly bitter experience with vaporizers over the past year, Don Burke, senior vice president of Management Science Associates, Pittsburgh, told attendees that it’s a product on the rise and shows a renewed promise for the channel. 

5. FDA help with age verification

Age verification

Zeller said the FDA is about to provide new educational materials and training resources around age verification for retailers and their employees. He said to expect the materials, which will be offered free to retailers, sometime this fall.

He also pointed out an age-verification app that is now available for download onto employee phones via traditional online means.