OAKBROOK TERRACE, Ill. -- As I sit down to Thanksgiving dinner tomorrow, I’ll have no shortage of things to give thanks for. My parents and sister have traveled to New York to celebrate the holiday; my amazing mother-in-law is hosting not just them, but a slew of extended family and friends; and my husband and I recently celebrated one wonderful year of marriage and a first-place prize in the annual Brooklyn Chili Takedown.
I’d imagine it’s not always so easy to give thanks as a tobacco retailer. Cigarettes—the vast majority of category sales—have been on the decline for decades, creative legislatures and anti-tobacco groups have long sought to regulate the category into near-prohibition and ever-growing taxes have made it all the more difficult to operate.
Yet in 2015, we saw a bit of a change. Here are at least three things we in the tobacco industry can be thankful for this Thanksgiving:
“Booming” Cigarette Sales
Forget the historical 3%-4% declines in cigarette volumes: 2015 started out with Nielsen reporting U.S. volumes up by 0.5% in the first quarter, and Management Science Associates (MSA) retail shipment data had premium cigarette volumes up 2% as of June 2015. Sure, those numbers haven’t been maintained throughout the year—Nielsen reported a 1.1% decline in October volumes—but they’re still well above that 3%-4% decline ratio.
It’s something retailers can be very thankful for. As Kevin Smartt, CEO of the Austin, Texas-based Kwik Chek Food Stores Inc., said at April’s NACS State of the Industry Summit, "when a $5.3 billion category in our channel goes flat after years in decline, that's impactful.” (link: http://www.cspnet.com/category-news/tobacco/articles/cigarettes-flat-new)
Science is on “Our” Side
Despite the fact that it doesn’t take a rocket scientist to deduce that non-combustible nicotine delivery systems are less harmful than combustible nicotine delivery products, the U.S. Food and Drug Administration (FDA) prohibits manufacturers and retailers from saying so. They do not, however, prohibit the anti-tobacco brigade from claiming that non-combustible products like electronic cigarettes are as bad—or worse—than combustible cigarettes.
Harm reductionists like Dr. Brad Rodu and Dr. Michael Siegel have long decried that the science simply doesn’t support that. But a recent study released from the Centers for Disease Control (CDC)—an organization that has taken out ads against e-cigs—could help take those claims mainstream. With the data showing that a) non-smokers are not trying e-cigs and b) e-cigs seem to be helping smokers quit, a Motley Fool report believes the CDC data could actually help re-ignite e-cig sales.
So let’s be grateful science is on the side of e-cigs and could potentially help grow the category further in 2016.
The Promise of the Future
Speaking of 2016 and beyond, it’s an exciting time to be in this business. After four years of covering tobacco for CSP, my title of Senior Tobacco Editor no longer seems accurate—even a Senior Nicotine Editor doesn’t fully encompass everything going on, thanks to the expanding world of vape and states legalizing recreational marijuana sales.
As we prepare to enter a new year, there are certainly the usual suspects of threats: deeming, taxes and local restrictions. But there’s also the promise of a future where people are using vaporizers not just to get their nicotine, but to get their caffeine or vitamins; a future where convenience stores don’t just have tobacco products on the backbar, but a selection of cannabis as well. Who knows what exciting things tomorrow holds for this category.
Melissa Vonder Haar, author of the Smokes & Mirrors blog, is the senior tobacco editor of CSP magazine. Contact her at mvonderhaar@winsightmedia.com
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