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TOBACCO BUSINESS
JANUARY/FEBRUARY 2014
that potentially game-changing FDA
regulation of this relatively nascent
category is imminent. Unlike many
in the industry, the company chose
to take a proactive approach toward
accommodating what it sees as
inevitable: an FDA ban on flavored
e-cigarettes.
“Beyond menthol and tobacco, we
don’t do any flavoring,” says Wiesehan.
“We think it’s an issue with the FDA
and we want to be very prudent in what
we do and also be good citizens. We are
not trying to promote to anyone who is
not already a smoker, which is what we
believe the FDA will look at when they
look at flavors.They will say, ‘Look, you’re
attracting children or you’re attracting
someone who does not currently smoke.’
Our demographic is 100 percent
someone smoking cigarettes today. We
want those smokers to try an e-cigarette.”
The company is also committed to the
“We Card” tobacco sale age verification
retail program, requiring consumers to
show proof that they are of age before
purchasing its products.
To ensure consistent taste and quality
of the vapor being inhaled, Ballantyne
chose to manufacture the liquid used in
its products in the U.S., another decision
it hopes will play well with regulators.
“We ship that to China for assembly
and then ship the finished products
back,” explains Wiesehan. “But we’re
looking into moving the entire process to
North Carolina, which will give us better
control of the supply chain and which we
also believe the FDA will prefer.
“We think [e-cigarettes] will be
regulated a lot like tobacco. Flavors will
be a problem, selling to minors will be
a problem, [and] Internet sales will go
away. And then we think they will want
to see good manufacturing practices.
We will have to show them our testing
and prove that our liquid is as consistent
as we say—which is something a lot of
companies can’t do,” relays Wiesehan.
Such speculation has been a point
of differentiation across the e-cigarette
playing field with some manufacturers
moving forward with flavored products
and overseas manufacturing practices,
essentially banking on having time to
reconfigure their business approaches
as necessary if and when the FDA
introduces e-cigarette regulations.
Although regulations were expected
in October of 2013, at press time the
agency had yet to make any major
announcement regarding the category.
In the meantime, the e-cigarette
market continues to grow as more and
more retailers pick up the category.
Mistic’s electronic cigarettes and
vapor products are currently sold in
approximately 40,000 retail outlets
across the country, as well as through
its website. Beyond Walmart, chains
like Rite Aid, Kangaroo Express, Circle
K, Winn Dixie/Bi-Lo, Food Lion, and
many others stock these products.
PoS PointeRS
For those retailers just introducing
the category, Wiesehan recommends
taking an aggressive stance. “You need a
counter display that puts them right in
front of your customers,” he says. “Once
it’s established you can move it back,
but education at the point of purchase is
key for a retailer who is just getting into
e-cigarettes.”
It’s also critical that first-time “vapers”
have a good experience with the
product—which is why some of the me-
too, fly-by-night brands can backfire
for retailers, he adds. “It is all about the
taste. If someone tries an e-cigarette for
the first time and gets a bad one, they
usually don’t go back and try another
brand.”
Ultimately, the most important thing
retailers can do is to simply be in the
category. “E-cigarette sales are growing
every day,” says Wiesehan. “E-cigarette
sales will top $2 million this year,
including Internet retail. This category
isn’t going away.”
TB
“We think [e-cigarettes] will be regulated
a lot like tobacco. Flavors will be a problem,
selling to minors will be a problem, [and] Internet
sales will go away. And then we think they will want
to see good manufacturing practices.”
