TOB_Magazine

[ 66 ] TOBACCO BUSINESS [ MAY / JUNE | 18 ] We expect the category will grow around 25 percent to $5.5 billion in [sales for] 2018. Meanwhile, Imperial Tobacco is fired up to debut its next-generation iteration of Blu: Myblu, a sleek pod-style vapor product expected to compete directly with Juul. Ease of use, pleasing aesthetics and nicotine salt technol- ogy have earned Juul a hefty 49.6 percent market share, but Imperial hopes that Myblu’s technology coupled with a more omnichannel market approach will help it regain some of the share it has lost to Juul over the last year. Overall, Herzog sees the tobacco industry increasing- ly pivoting toward “reduced-risk product development” and continues “ to believe there is plenty of room for mul- tiple players to succeed over the long term and believe the winners will ultimately have a balanced portfolio of [reduced-risk products] that appeal to a wide range of adult tobacco/nicotine consumers.” Recent sales data suggests that rechargeable refills are by far the most popular with vapor consumers, account- ing for 76 percent of total retail sales over the four weeks ending March 24, 2018, the most recent period for which Wells Fargo Securities data is available. Disposables, by contrast, constituted only 6 percent of sales during that period, while kits accounted for 18 percent of sales. In terms of the retail landscape, Wells Fargo Secu- rities’ market research suggests that tanks, mods and personal vaporizers hold the lion’s share of the market, constituting about $3.5 billion, compared to e-cigarette products at $2 billion. Vape shops still dominate retail sales of tanks, mods and personal vaporizers, account- ing for approximately $2 billion of overall revenues, with sales in c-stores, food, drug and mass retailers of about $650 million and tobacco shops and online out- lets accounting for about $850 million in sales. C-stores, food, drug and mass retail channels, however, continue to account for the bulk of e-cigarette sales ($1.1 billion), with online and other retail channels together doing $900 million in e-cigarette sales. TB Vapor Innovation Continued Imperial Tobacco hopes to siphon market share from Juul with its new Myblu pod-style vapor product.