NEW YORK -- New year, similar story: The electronic cigarette segment continues to decelerate according to Nielsen data. All channel data through Jan. 23, 2016, shows e-cig dollar sales were down 17.7% and unit sales were down 3.3%.
“Though e-cig year-over-year pricing has been in persistent decline, we believe it is at least partially due to difficulty in capturing SKUs of the evolving vapor category and proliferation of vapors/tanks/mods (VTM) and refills, which tend to have lower retail prices,” Wells Fargo senior analyst Bonnie Herzog wrote in a research note.
Herzog added that the way Nielsen tracks the segment is problematic because individual units are tracked—meaning one disposable electronic-cigarette sale is weighted the same as a refill package that includes five cartridges.
“While Nielsen’s data is useful directionally, we believe the e-cig unit and pricing data is difficult to rely on given Nielsen is still not reporting ‘equivalent’ units in this category,” Herzog wrote.
The types of vapor products that are being sold seemingly supports this. For the 52 weeks ending Jan. 23, 2016, liquids accounted for 5% of all channel e-cig dollar sales, kits for 17%, disposables for 23% and rechargeable refills for 55%.
While segment growth decelerated as a whole, Reynolds’ Vuse had its strongest share position to date with a 38.5% dollar share and a 48.4% unit share across all channels. Fontem U.S. (the Imperial subsidiary that operates blu eCigs) was second with a 20.7% dollar share and 15.7% unit share, while Logic and Altria split third with Logic’s 14.6% dollar share and 8.6% unit share and Altria’s 7.6% dollar share and 9.2% unit share.
“Altria’s 7.6% dollar share was impressive given that it lapped a tough year-ago comparison (14.3%) and reflected strong consumer uptake of its new MarkTen XL and a small boost from Green Smoke,” Herzog said.
NJOY rounded out the top five, with a 3.8% dollar share and 4.4% unit share.
Reynolds was also the top performer in c-store channel sales (43.4% dollar share, 53.2% unit share), with blu, Logic and Altria in the second, third and fourth slots, respectively. However, CB Distributors took fifth over NJOY, with a 3.6% dollar share and 3.2% unit share.