Views on Vuse

Other e-cig companies respond to Reynolds' success in Colorado

Melissa Vonder Haar, Freelance Writer

NEW YORK -- Although Lorillard was the only Big Tobacco company represented at November's Wells Fargo E-Cig Forum, the fact that Altria and Reynolds are close to launching national campaigns for their NuMark and Vuse electronic cigarette products did not go unacknowledged.

"When I went into this business in 2012, it was obvious that Big Tobacco would get into it--but it was also obvious that it wouldn't be just Big Tobacco," said Fin Branding Group's chairman and CEO Elliot Maisel, adding that he expects other consumer product goods companies to invest in the segment.

Maisel acknowledged that between deep pockets, broad sales forces and existing retailer relationships, Big Tobacco may have a competitive advantages on newer e-cig companies like his own.

"In 2013, we probably spent (on marketing) what Altria has lying in its petty cash drawer," he said. "While I'm concerned, I'm also excited because they've grown the category--we'll grow with them."

This has certainly been the case in Colorado, where Reynolds is currently testing Vuse. Since July, Vuse has taken a market-leading position and helped grow e-cigarette sales across the state.

Although Vuse took that No. 1 spot from blu, the company's president Jim Raporte president sees Reynold's success as a positive.

"We have always thought that more noise in the market is better for the industry," he said. "That's what Vuse has done (in Colorado) and we hope that continues."

Raporte's sentiments echoed those of many successful e-cig companies: that Big Tobacco's entrance is not something to be feared.

"We view Colorado as a trial (for Reynolds)--and we're not concerned about the short term," said Roy Anise, executive vice president of NJOY. "Big Tobacco is looking to capture smokers who are exiting the business--whereas we are directed towards core tobacco consumers."

"Our leadership is based on consumer products--not tobacco products," said John Wiesehan Jr., CEO of Ballantyne Brands, maker of Mistic. Big Tobacco "wants to treat e-cigs like tobacco products; we treat it differently, like other CPG products," he said.

Logic Technology's president Miguel Martin also argued that it's not a "forgone conclusion" that Big Tobacco will dominate the segment, pointing out that retailers will play a big role in who succeeds. Still, he acknowledged that the entrance of Altria and Reynolds could make it more difficult for retailers to enjoy the kind of merchandising control they currently have over the electronic cigarette segment.

"If retailers want to take back the back bar, now is the time to do it," he said.