26
TOBACCO BUSINESS
JULY/AUGUST 2013
There’s no doubt that electronic cigarettes are a new force to be reckoned with,
but what about their cigar counterparts? E-cigars are on the scene, but they are
also being met with some skepticism.
I
n June,Wells Fargo tobacco analyst
Bonnie Herzog suggested that
e-cigs are “revolutionizing” the
tobacco market.
“We now anticipate the e-cigmarket will
approach $2 billion in retail sales (including
online) by the end of 2013 and eclipse $10
billion by 2017,” she stated. “Importantly,
our analysis indicates that e-cigs could
be margin-enhancing to the combined
category in the near-term, and by 2017
we predict e-cig margins could approach
the mid-40 percent range, higher than
current conventional cigarette margins of
approximately 40 percent.”
Herzog also mentioned that the
entrance of the “Big Three” tobacco
manufacturers “could catapult the growth
of the e-cig category driving the total
conventional cigarette and e-cig profit
pool up by a CAGR of seven percent
over the next decade.”
That’s encouraging news for those in
the e-cigarette business, but will that
have any bearing on the sister electronic
cigar scene?
Tony Saroya, owner of three tobacco
outlets in Las Vegas, believes it already
has. Saroya is a big proponent of
electronic smoking—actively selling
both e-cigarettes and e-cigars in all three
of his stores: Red Red Rock Smoke
Shop, Trenton Smoke Shop and Jack
and Jill Smoke Shop.
As the name suggests, the e-cigar
represents the electronic version of
tobacco cigars. It is a battery-powered
device that contains liquid nicotine that
is turned into vapor once you puff. Like
e-cigarettes, e-cigars currently on the
market come in both disposable and
rechargeable models.
Currently, Saroya stocks disposable
e-cigars from two manufacturers—
Logic and Fifty-One—at price points of
$19.99 and $39.99, which, he says, vary
due to the number of puffs they emit.
“The less expensive ones give out about
600 puffs, the more expensive, about
800,” he explains.
Lit in the Wind
One of the biggest customer benefits
of e-cigars—as Saroya sees it—is that
Are You Ready for
Electronic Stogies?
By Renee M. Covino
