CHICAGO -- Rarely in the history of convenience retail has any single category of product experienced the highs and lows as electronic cigarettes in just the first six months of 2018.
From the recall of a major product line to undercover actions by the federal government, vaping devices and e-liquids have seen a vast range of public reaction—including a high rate of consumer interest and demand.
That’s not to say that the other tobacco categories failed to make the news. Other tobacco products (OTP) certainly stood out as a success story for the first half of the year. And new regulation on an already highly scrutinized category was also an issue in recent months.
But three of the five major tobacco-news events to occur in the first half of 2018 had to do with e-cigarettes. Here are those stories ...
Photo courtesy of Lindsay Fox.
1. FDA action on e-cigarettes
This past spring, Scott Gottlieb, commissioner of the U.S. Food and Drug Administration (FDA), announced the agency’s Youth Tobacco Prevention Plan, which involved deploying undercover agents to stores to clamp down on illegal tobacco sales to minors and sending letters of inquiry to e-cigarette manufacturers.
Photo courtesy of TBEC Review.
2. E-cigarettes a standout performer
Despite regulatory scrutiny on federal and local levels, e-cigarettes are a winner for retailers in 2018. Dollar sales for e-cigarettes rose an impressive 166.2% over the four-week period ending May 19, according to Bonnie Herzog, managing director for consumer equity research for Wells Fargo Securities, New York. Much of the growth was led by San Francisco-based Juul Labs. Citing figures from New York-based Nielsen, Herzog said pricing was up 43.4% in that same time period and volumes were up 85.8%.
Speaking specifically to the growth of Juul products, Nik Modi, tobacco analyst for RBC Capital Markets, New York, said the company's sales have shown a “remarkable” compound annual growth rate of 35% since 2016. He said the physical form and makeup of the vaping device and its use of “nicotine salts” to provide a desirable nicotine-delivery experience are important components of its success.
Photo courtesy of Vaping360.
3. Cigars also shine
Cigars sales and volume figures continued to show favorable growth, according to Joe Teller, director of category management for Swedish Match, Richmond, Va., with natural and rolled-leaf cigars showing a lot of promise in the first half of the year.
Citing Swedish Match’s own shipment data for the convenience class of trade, Teller said 68% of growth in the cigar segment is coming from natural and rolled-leaf cigars, while homogenized tobacco leaf cigars showed a 14% increase during the 26-week period ending in mid-April.
Photo courtesy of Pexels.
4. Menthol and tobacco-purchase age
Major municipalities are setting greater precedent regarding tobacco regulation, specifically with menthol flavor bans and raising the legal purchase age for tobacco products from the federal threshold of 18 to 21 years.
In a June 5 election, voters in San Francisco upheld a board of supervisors decision to ban the sale of menthol-flavored tobacco products in the city. Meanwhile, a May vote by Minneapolis City Council members raised the legal age for buying tobacco products from 18 to 21. Similar actions in multiple municipalities across the country are in various stages of development.
Photo courtesy of Supercarwaar.
5. A recall
Winston-Salem, N.C.-based R.J. Reynolds Vapor Co. initiated a voluntary recall of its Vuse Vibe e-cigarette this past spring after the company said it received 10 complaints regarding the product’s power unit. The recall involved 2.6 million power units but did not involve its Vuse Solo or Vuse Ciro products, the company said.