Balvor Report: E-Cigs Are Growing, Not Decelerating

Per-store average shows dollar sales up 25% from last year

By 
Melissa Vonder Haar, Tobacco Editor, CSP

David Bishop

David Bishop

BARRINGTON, Ill. --Nielsen data suggests that electronic cigarette sales have been decelerating over the past year, with just an 11.8% year-over-year increase in e-cig dollar sales for the period ending December 20, 2014, due in part to 13 consecutive months of negative pricing trends; however, a new report by sales and marketing firm Balvor LLC suggests the kind of chain-wide sales data Nielsen tracks might underestimate the growth many retailers are enjoying. The Balvor Retailer Composite (BRC), which equalizes chain-wide data to an "average per store week" (APSW), shows dollar sales of participating retailers were up over 25% year-over-year in the four weeks ending December 28, 2014.

David Bishop, managing partner of Balvor, explained that this APSW metric allows Balvor and its retail partners to analyze the business and develop benchmarks.  

"Doing so helps retailers get a more accurate view of how the business is trending as it minimizes the sample bias toward larger store operators and adjusts for changes in the store base that can distort growth rates," Bishop said.

The report tracked item-level sales data from 14 retailers of varying sizes and locations across the United States, looking at nearly a dozen custom segmentations to every SKU sold by these chains. Though the report focused on the four weeks ending on December 28, 2014, it included comparable benchmarks from July 2014, with prior data for both periods. It also considered manufacturer performance overall and by system type.

Some findings of the Balvor Retailer Composite echoed ongoing trends of the e-vapor segment: Disposables' share has plummeted from 60% to under 30% over the past 18 months, while rechargeables have emerged as the dominant system and refillables have upped their share to 15% after significant distribution gains in recent months; refill cartridges and e-liquids are also increasing their share and "creating headwinds for top-line sales growth."

Still, the data mined from the custom segmentations tracked by Balvor suggest vapor analytics and insights need to get more specific in order to provide retailers with a more accurate picture of the category. For example, despite the declines happening in disposable sales, digging deeper into the data shows there are still "latent opportunities" in disposables retailers might want to consider.

"The Electronic Nicotine Device (END) category continues to evolve with innovations that better satisfy what consumers crave," Bishop said. "Having the ability to more quickly identify, understand, and respond to changes in the marketplace is key for retail growth, which ultimately also benefits manufacturers who are truly committed to providing better product alternatives."