I saw my first e-cigarette in person in early 2008 at a well-established and well-attended tobacco trade show. Attendees were crowded around the booth and watched in amazement as the company reps initiated the long electronic device and inhaled, then exhaled a stream of thick, rich vapor. The observers were split in their reviews back then. Some thought that the product had the potential to change the tobacco landscape forever, while others, amazed as they were, wrote the whole thing off as artificial and gimmicky.
Irrespective of their thoughts, however, everyone had an opinion on how a product of this type could succeed in the tobacco supply chain. And while they differed on the product’s future, they all offered similar advice:
- “You need to make it smaller, lighter—more like a real cigarette.”
- “You need to make it disposable—no smoker is going to want to charge batteries and change cartridges.”
- “You need to price it consistent with the cost of conventional cigarettes.”
Unfortunately, many e-cigarette companies took this advice, and today there are countless distributors and retailers who have space in their warehouses and stockrooms full of small, light, disposable and cheap e-cigarettes. They didn’t satisfy, they didn’t sell and, of course, they didn’t make it in the long term.
Sense of Adventure
T
oday, seven years after seeing my first e-cigarette, products exist that I could not have envisioned back then: tanks, mods and e-liquids of every flavor and nicotine density. There are styles that I could not have envisioned, and most of them bear little, if any, resemblance to traditional tobacco products. And they’re not cheap. Consumers have determined that an investment in a sturdy, well-made device with a high-quality battery and well-crafted e-liquids is well worth the cost.
The fact of the matter is this: The vapor business continues to generate significant revenues despite the inevitable product transitions, changing consumer preferences and regulatory and legal ambiguity. Unfortunately, the traditional tobacco supply chain is not keeping up and seems reluctant to do so.
Many of the players throughout the chain bemoan the obsolete products that still occupy space in their stores, stockrooms and warehouses. They are confused about where the industry is going and what they should do about it—if anything. As a result, many aren’t doing anything.
At the end of the day, the lesson that I have learned about vapor is that this is as much a technology play as it is a tobacco play. If the traditional tobacco supply chain is going to stay relevant today and into tomorrow, it must keep up. And by keeping up, I don’t mean investing a great amount of money, time or space in every new product, new technology or new idea that comes down the pike. I do mean keeping informed about what’s going on in the industry and where it’s likely to go. That means research, reading and learning as much as possible about the products, the regulations and the market. The future of the industry is not the present, nor is it the past.
One of the most important things that we’ve learned thus far is that consumers who use electronic products can be an adventuresome group. They are willing to test and taste a multitude of flavors and willing to experiment with different form factors; they also are willing to go outside the established tobacco chain to vape shops for purchases.
Surveys tell us that many of these consumers will spend up to $60 to get started with vaping systems and accessories, and subsequent weekly purchases can approach $10 to $15. From that standpoint alone, it makes sense to understand what they’re trying and buying and understand how to build and support product lines that appeal to these consumers. At the end of the day, a distributor or retailer may not take the risk, but at least the risk has been assessed.
Don’t Give Up
The experience with electronic products has exhausted and frustrated many. But it’s important to know that the exhaustion and frustration should not lead to complacency. For anyone who sees promise in this category today, in the future or even those who once saw promise and now are not so sure, it’s important to engage or re-engage in the industry, in the products and in the continuing public health and regulatory debate.
My bottom line is this: If you’ve had a bad experience in the vapor category, it’s still too early to give up on it. From a technology perspective, things change quickly, and vapor is changing quickly. Our smartphones of today differ substantially from those of two, five and 10 years ago, and so do its consumers. Don’t give up. Get smart and, to the greatest extent possible, stay as smart as possible.
Members help make our journalism possible. Become a CSP member today and unlock exclusive benefits, including unlimited access to all of our content. Sign up here.