I recently found this very interesting, concise, and serious analysis of the fascinating topic of E cigarettes.
E cigarettes are an inherently fascinating product, because they are something new and electronic that the human mind has created for an ancient, famous product that has been around for thousands of years in different forms. When the Ccavemen first began chewing tobacco, and then the Indians and other tribes began smoking it, who would ever have believed that w would some day see an electronic machine used to mimic the traditional product known as tobacco? Ecigarettes have now been on the market for some time; they have reached the point at which it is necessary to examine their success in that market, to see how they are doing and what their prospects are. This article does exactly that: it reviews the latest surveys and statistics to see how likely it is that E cigarettes will survive and prosper. Every retailer must have this information.
This little article concisely provides facts and figures in a way that anyone who reads it can use them.
E-Cigarettes Important New Niche Category: Survey
Wells Fargo reports retailer confidence in e-cigs, concern that regs, taxes will slow down growth
NEW YORK — “I believe that e-cigarettes are a viable category and will continue to grow with the major brands rising to the top … with Lorillard purchasing blu, some validity has been added to the category.” This was the response of just one of the tobacco retailers and wholesalers interviewed for Wells Fargo Securities’ “Tobacco Talk” survey, according to analyst Bonnie Herzog, but the sentiment was shared by many.
While previous “Tobacco Talk” surveys had also included positive attitudes towards the growing category, Lorillard’s acquisition of blu ecigs has further convinced many that e-cigarettes are here to stay.
The May 17, 2012, survey results had 73.1% of the respondents believing that e-cigarettes are not simply a fad, but a lasting “trend,” similar to the energy drink phenomenon.
There’s good reason for such enthusiasm: one retailer described an impressive 193% increase in sales from the first week to the second week of offering NJoy e-cigarettes at its stores.
Not all retailers have seen such success, but the category is continuing to prove its worth with 2.5 million e-cigarette users, according to industry group Tobacco Vapor Electronic Cigarette Association, and an estimated $300 million in revenue currently at retail, and the possibility of increasing that number to $1 billion in the future, according to Lorillard’s CEO Murray Kessler.
We must of course know what those people think who are a bit less positive about it all – it is so early in the E cigarette game that they might turn out to be right after all.
Other respondents were more cautious about the ability of the e-cigarette industry to continue such impressive growth, citing new product boom, the possibility of further U.S. Food & Drug Administration (FDA) regulations and the addition of state and federal excise taxes as obstacles to the category.
One respondent went so far as to describe e-cigarettes as an “extreme liability risk,” noting the lack of regulation in both the United States and in China, where most of the products are manufactured.
Besides regulation and taxation, just how much space e-cigarettes will take from cigarettes and OTP has yet to be determined; 65% of survey respondents said e-cigarettes are not currently encroaching on traditional tobacco products, as most e-cig companies encourage self-service counter displays. As the category grows, however, many believe e-cigarettes will be required to move elsewhere. While some respondents predicted “other tobacco products” (OTP) as the ultimate landing spot for e-cigarettes, others see cigars as the natural victims of e-cigs moving off the counter, as cigar shelving can typically be adjusted to accommodate a variety of sizes.
Ultimately, the Wells Fargo analysts agreed with the majority of respondents that e-cigarettes are more than just a fad, but are also expecting increased regulation and taxation to slow down enthusiasm.
Or, as one respondent put it, e-cigarettes “are a real opportunity, but not quite up to the hype.” Read the full story on E Cigarettes Important New Niche…
How will it turn out for retailers who stock E cigaretes? My own experience has been neither as good as the most enthusiastic, nor as bad as the unhappiest. I look forward to reading respnses from other readers,and I shall most certainly share mine with you. We can all help each other out with this new product, in terms of finding ways to display e cigarettes and sell them.
Simon Wright enjoys everything from a good night out on the town to a quite fishing trip over the weekend. He has been a smoker for more than 20 years. Since finding out about the electronic cigarette it has become a focul point of Simons life and has made it his ambition to make sure as smokers as possible get to see the electronic cigarette.
Filed under: Electronic Cigarette News
Like this post? Subscribe to my RSS feed and get loads more!