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TOBACCO BUSINESS INTERNATIONAL
JANUARY/FEBRUARY 2015
By Jennifer Gelfand
Vapor Trendspotting
There’s a lot happening in the vaping world these days. Here’s a look at some of the
industry’s emerging trends—and what we can expect in the future.
T
he news that Oxford Dictionary
named “vape” the word of the
year only serves to underscore
the fact that interesting and exciting
developments have been and continue
to take place in this growing category.
The past year saw a flurry of activity in
the vapor world, including long-awaited
proposed deeming regulations from the
FDA, a consumer shift from e-cigarettes
to vapors/tanks/mods (VTMs), and Big
Tobacco definitively moving into the
category.
As Bonnie Herzog told attendees of
Wells Fargo’s annual vapor conference,
“This industry has staying power and will
continue to be disruptive.”
The vapor shop retail channel continues
to expand, across both the U.S. and the
worldwide market.“I’ve been told that there
are 30,000 [vape shops],” says Nick Molina
of International Vapor Group. “I think the
number is actually between 15,000 and
20,000, which is still pretty astounding.”
Many predict that innovation will
drive future growth and determine the
eventual winners in the marketplace.
“This is like the first or second inning,”
says Joe Murillo of Nu Mark, Altria’s
vapor arm. “The consumer is still making
tradeoffs; nothing is quite matching
[traditional cigarettes] yet in terms of
taste, performance, and battery function.”
Still, like most in the industry, Murillo
is optimistic that both the distribution
infrastructure and product quality will
continue to improve. “The channels
are still working themselves out and
regulation is only just beginning,” he says.
“However, I have worked on any number
of new products at Altria—a number of
which we were hopeful would be effective
reduced-exposure products—and I have
never seen consumers adopt a product or
be as interested in a product as they are in
vapor.”
TBI
Eight Industry-Shaping Trends Spotted in 2014*
1.
Vapor/tanks/mods (VTMs) gained momentum over rechargeable and disposable
cig-alikes, with a slight bias toward closed systems that leverage the razor/blade
model;
2.
Big Tobacco entered in a big way, using its deep pockets to drive trial and
awareness;
3.
Vape shops soared in popularity by luring customers with a plethora of hardware/
liquids and the ability to educate consumers;
4.
Proposed deeming regulations were announced, providing some clarity on what
to expect;
5.
Flavors went mainstream, with nearly all leading vapor companies now offering
flavors, including some who initially opposed them;
6.
Consumer brand loyalty continues to increase,
although it remains well below that of combustible cigs;
7.
Innovation is creating less-commoditized products; and
8.
M&A activity is continuing to build.
*Courtesy of Wells Fargo’s Bonnie Herzog