Nielsen: Altria ‘Marks’ Up the E-Cig Segment

MarkTen takes No. 3 spot in first month of national distribution

Melissa Vonder Haar, Freelance Writer

MarkTen Display

RICHMOND, Va. -- Just one month into the national rollout of MarkTen, Altria Group Inc. is already establishing itself as a leader of the electronic-cigarette segment. According the latest Nielsen data, MarkTen jumped to the No. 3 c-store seller with a 13.6% dollar share and 11.4% unit share for the four-weeks ending July 5, 2014, up from a 1.4% dollar and 1.5% unit share in the prior four-week period.

Even more impressive is the fact that MarkTen has not yet achieved full national distribution. MarkTen is now available in over 60,000 outlets in the Western part of the country, with plans to continue its expansion eastward in the fall.

“While MarkTen's expansion just began last month, Nielsen data … points to robust consumer trail,” wrote Vivien Azer, an analyst for the New York-based Cowen Group.

The Nielsen data also showed that while Lorillard’s blu retained its No. 1 spot, it may be losing share to Altria. Its dollar share went from 42% during the four-weeks ending June 7, 2014, to 35.3% this period, with unit shares falling from 32.7% to 27.1%. Overall, this represented a 5.4% dip in dollar share year-over-year.

Another player potentially ceding share to MarkTen was NJOY, which dropped to the No. 4 position this month with 6.9% dollar and 6.3% unit shares (compared to 9.9% dollar, 9.0% unit shares in June).

Logic Technologies Inc., however, solidly maintained its No. 2 position with a 24.2% dollar share (minimally down from 25.5% last month). In fact, the Pompano Beach, Fla.-based company inched closer to overtaking blu as the volume champ of the c-store channel with a 26.6% unit share (27.4% last month).

Overall, c-store dollar sales were down by 12.9% this month, with unit sales up by 0.5%. Although the c-store channel continued to see electronic-cigarette sales decline, Wells Fargo analyst Bonnie Herzog noted there’s room for optimism thanks to both MarkTen and Reynolds’ slower rollout of Vuse (which was up to a 4.2% dollar and 7.2% unit share this period).

“The decline sequentially moderated,” Herzog wrote in a research note. “We remain optimistic that national rollouts of MarkTen and Vuse could re-ignite category growth.”

“Excluding MarkTen, the category would have remained far more troubled, with dollar sales down an estimated 25%, and volumes down an estimated 11%,” agreed  Azer. “Looking ahead, we will continue to watch to see if these two companies can bring some life back to the ailing e-cig category.”