TOB Magazine

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TOBACCO BUSINESS

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MAY

JUNE

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show with a host who brings relatable people on who talk

about their experiences and also visually demonstrate

the product’s features.

For example, one demonstration shows two glass boxes.

In one we pull vapor from an e-cigarette, and in the other

we pull vapor from a Cue system so that you can see how

much more vapor Cue is delivering. This is a visual pre-

sentation of how a device like Cue can deliver much more

thick, warm vapor than an e-cigarette. So the infomercial

strikes a balance between emotional connections and pre-

senting rational, hard facts about the product.

How does your campaign fit in with restric-

tions about making health claims about the

benefits of vapor products?

FDA has not issued guidance with respect to vapor prod-

ucts specifically directly related to the use of television

ads or any other media for that matter. That said, we

voluntarily self-regulate our marketing practices very

strictly. We do not make any cessation claims in our mes-

sages. Nor do we make any claims that vapor products

are healthier than smoking. In fact, the only comparison

we make to cigarettes relates to the fact that vapor prod-

ucts don’t smell or stain your clothes. We are also very

careful about when we broadcast and on what channel.

The channel has to guarantee that at least 85 percent of

their intended audience is made up of adults, and we

primarily air it at night when kids are in bed.

Who is your core target audience for Cue?

The core audience is smokers looking for an alternative.

There are a lot of them out there who have been dissatis-

fied by e-cigarettes or who are intimidated by vaping de-

vices and vapor stores. This comprises the biggest popu-

lation still out there that we want to reach. A secondary

audience is the vaper himself or herself who is looking

for a more convenient way of vaping.

How is the ad performing for you?

In these first few weeks the results have far exceeded our

expectations. We are getting more people calling the

800-number or going online and buying the product than

we anticipated. There are two metrics in the infomercial

world. The first one is calls per $1,000 spent: how many

calls you get for every $1,000 you spend on television. The

second is conversion: how many of those who call actually

end up buying. Our response rates have been very strong.

Over time, we will start editing the infomercial into short-

er versions. As you go shorter with the commercials, you

tend to drive fewer people to website and call center and

more to retail. That will be the second phase.

What do retailers need to do to maximize

sales of your products? How are you

helping them do this?

We have launched a national multi-million dollar info-

mercial campaign aimed at driving education, brand

awareness, and trial. Think about Cue as a Keurig-type

of model: the more devices there are in the market, the

more replacement cartridges people will look to buy in

stores. Cue wants to make life simpler for consumers,

and for retailers, too. We have a dedicated field sales

force and category management team that will work

with retailers to make the best usage of their e-vapor

shelf and maximize profit.

We’ve talked about your infomercial, but

what are you doing at the store level to help

educate consumers?

We are working with our retail partners on different

options. Every retailer is a little different. In some dis-

count tobacco stores and even vape stores, you can

work with clerks to educate them about the product and

provide them with educational tools and leaflets. So we

do that. With some less human-touch-based retail for-

mats like c-stores, it is in point-of-purchase display ma-

terial, leaflets and coupons. We are launching a mobile

tour where we will have a Cue lounge truck that visits

different festivals and Indy 500 and NASCAR races so

people at those events can come into the mobile lounge

and learn about the device, try it, and even buy it. Ed-

ucation is really the key component of our communica-

tion package.

Are you working on a next-generation product?

Or is all innovation on hold now?

Because of the Deeming Rule, innovation is over when

it comes to products on the U.S. market. The product

we are selling now, Cue, was in commerce before the

Deeming Rule, and there is no modification or innova-

tion possible that we can do to it. So for now we are re-

ally focused on our PMTA process for existing products.

A company like Swisher had an edge over new-

er companies in coping with FDA compliance.

Are you looking at acquiring competing compa-

nies that may be ill-equipped to navigate

the regulatory environment?

EAS’s relationship with Swisher is helpful in many ways.

Since EAS was created two and a half years ago, my

team and I spent months testing products and talking to

entrepreneurs and established companies until we found

Digirettes, which had the best technology on the mar-

ket with Cue. That is why we put our resources behind

it. Can there be others out there? Absolutely. Would we

be interested in looking at those? Absolutely. However,

if a product is in the market and that product wanted

to continue to exist—barring any deadline change from

the FDA—that product will need to go through all the

testing [that] the FDA requires within the next one and

a half years, which is a short time. With Cue, all of that

has already started. So any new technology that hopes

to continue to exist after 2018 will need to speed that

process up.

My estimate is

that by 2025,

the combined

total revenue of

all the alterna-

tive products—

heat-not-burn,

e-vapor, closed

systems like

ours, and open

systems—

together will

equal that of

combustible

cigarettes.

’’