NEW YORK -- Electronic cigarettes are an exciting and growing segment within the tobacco category--of this there is no doubt. Yet, when Reynolds American Inc. began looking into the e-cigarette business, the company said that it noticed a disturbing trend: while 30% of the population has tried some form of e-cigarette, the segment only accounts for a half-point share of the total tobacco industry. In other words, people are trying electronic cigarettes, but few are actually converting.
Winston-Salem, N.C.-based Reynolds said it believes it has developed a truly differentiated e-cigarette product that will convince adult smokers to make a permanent switch; it announced that it will officially roll out its Vuse digital vapor cigarette in Colorado on July 1.
"Expanding into Colorado represents the first major step in a national rollout," said Stephanie Cordisco, president of R.J. Reynolds Vapor Co., at a press conference held at New York City's Pier 59 on Thursday. "We plan to be a strong national leader in very little time."
[Editor's Note: To read editor Melissa Vonder Haar's tweets from this morning's event, as well as ongoing tobacco category coverage, follow her on Twitter @CSPMelissaV.]
While Vuse has been in limited test markets since last July, the Colorado expansion will include a full marketing campaign (including both TV and print advertising), merchandising options and a prepaid recycling program that will allow consumers to send Reynolds their Vuse power units and cartridges (as well as those from other electronic cigarettes) to be recycled at no cost.
A spokesperson for Reynolds told CSP Daily News that Colorado was chosen because of the company established retail network in the state and an ideal consumer mix for electronic cigarettes.
"We have one major goal in Colorado," Cordisco said. "To switch adult smokers who have tried an electronic cigarette to Vuse permanently."
Reynolds sought to differentiate Vuse from existing electronic cigarettes on the market, giving its research and development team the following objectives: develop a product that replicates the smoking experience of cigarettes; meets Reynolds' high internal stewardship and standards; and do so in a cost-effective manner so the product can be manufactured in the United States, but remain at a price point competitive with e-cigarettes being manufactured in China.
"The result was a truly differentiated product," said Reynolds' president and CEO Daan Delen. "The Vuse digital vapor cigarette is a game-changer for the industry."
Reynolds' R&D team said it found that one of the biggest complaints about e-cigarettes was that the quality of the vapor declined during the life of most e-cig cartridges. To address this issue, Reynolds developed microchips in both the power unit and cartridge of Vuse, which communicate with each other at a rate of 2,000 times per second to ensure the consumer is getting the best quality vapor with every puff.
"The last puff is as good as the first," promised senior vice president of research and development, Daniel Herko. "Vuse is going to dominate the electronic cigarette market."
Vuse will be available in three product configurations: Vuse Solo, a precharged, ready-to-use unit that comes with one cartridge (available in regular of menthol flavor), a rechargeable power unit and a USB charger; Vuse System, which comes with three cartridges (two regular, one menthol) and an AC adapter and carrying case (in addition to the power unit and USB charger); and cartridge packs, which include two regular or menthol flavored cartridges, each of which will last as long as a pack of cigarettes.
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