blu Continues to Dominate E-Cig Sales

Nielsen C-Store Tobacco Report shows promising numbers for Lorillard, electronic cigarette segment

Melissa Vonder Haar, Freelance Writer

NEW YORK -- The upward trend of electronic cigarette sales continued this week as Nielsen released its C-Store Tobacco Report for the period ending Sept. 28, 2013. During that time, electronic cigarette c-store dollar sales were up by 156.7%, reaching $42.2 million, prompting Wells Fargo analyst Bonnie Herzog to reiterate that retail sales are on track to reach $1 billion this year, or (roughly) $1.8 billion including online.”

The Nielsen report also reinforced Lorillard Tobacco Co.’s blu as the dominant force in the c-store channel: As of Sept. 28, blu owned a 45.3% dollar share (up 42 points from this time last year), followed by NJOY’s 22.6% dollar share and Logic’s 17.1% share.

The news was less positive for traditional cigarettes, though the segment was able to eek out a sales  gain, largely due to pricing increases. During the four weeks ending Sept. 28, 2013, total U.S. c-store cigarette sales grew by 0.1%, with a 1.8% increase in the average unit price and a 1.7% decrease in unit sales.

“Interestingly, unit sales have gotten sequentially better for the third period in a row while pricing growth has accelerated during those periods, though remains below last year’s levels,” Herzog said in a research note.

During that time, Lorillard grew its dollar sales by 0.9%, with pricing increasing by 2.1% and a 1.1% decrease in unit sales. Newport also grew its share by to 11.9% of the cigarette category, representing a  0.2% share increase compared to this time last year. This, combined with product innovations in the form of blu and the soon-to-be released Newport Gold, has Herzog positive about the Greensboro, N.C.-based company.

“We believe Lorillard is well on track … given the strength of Newport, the Newport Gold launch in (the fourth quarter of 2013), and blu,” Herzog said. “Lorillard's Q3 results were very impressive, and we are encouraged by retail share gains in both Newport and Lorillard as a whole.”