The rapid growth of the vapor industry has been attracting a steady influx of entrepreneurs aiming to capitalize on the potential that a viable alternative to smoking combustible cigarettes represents. While many of these are opportunistic ventures looking to make a quick profit before regulations go into effect, several serious players committed to the long term have entered the fray with promising technology and the managerial firepower to position their companies for the long haul. One of these is Solace Technologies, the brainchild of four young co-founders who set out to develop a more effective and economical nicotine e-liquid.
“We were seeing smokers trying to switch to vape product, but the nicotine levels were low and so they would try to vape but realize it wasn’t giving them the satisfaction they were looking for,” recounts Eric Anwar, chief marketing officer and a co-founder of Solace Technologies, along with partners Brendan McDermott, Lorenzo De Plano and Jomie Raymond. “Most would continue to smoke cigarettes and vape indoors [when smoking isn’t allowed]. It is not really solving the problem.”
One vapor company, Pax Labs, had managed to deliver a more comparable solution by harvesting nicotine salt, the natural state of nicotine, from tobacco leaves and using it in e-liquids. Vapers quickly discovered that liquids made with nicotine salt more closely mimic the sensation of smoking, offering a “rush” and “throat hit” similar to that provided by combustible cigarettes. However, Pax Labs’ patented e-juice formula was only available inside disposable pods that could only be used with its device, the Juul.
“Juul was limited in flavors, and it was very expensive, so we thought people will want a cost-effective method of switching over, and they will want flavors they like,” explains Anwar. “Plus, there was a lot of community support for the open bottle. That is where we saw white space and jumped in.”
Solace’s four partners set out to develop a nicotine salt-based e-liquid in flavors that smokers would enjoy and that could be used in open-system devices (and, ultimately, in closed-system devices that vapers “hack”). The effort was an immediate hit, winning a Best New Product Award at the 2016 Tobacco Products Expo show and gradually gaining a loyal following in the vapor community.
“Early on, education was our biggest challenge,” notes Anwar, who says vapers were not familiar with nicotine salts and disconcerted by the nicotine levels in Solace’s e-liquids. The nicotine levels in traditional e-liquids tend to range between 3 mg and 8 mg, while nicotine salt-based e-liquids have quantities like 30 mg and 50 mg because the dosages consumed are smaller.
Vapers have since embraced nicotine salt-based products, propelling the Juul to the forefront of the vapor market and giving companies like Solace a competitive edge its founders intend to continue to leverage. “Education is still a key component of transitioning customers into these new product forms, nicotine salts, by educating them on the benefits of them and showing that they can achieve the same satisfaction without smoking a combustible cigarette,” says Anwar, who points out that smokers are primarily looking for a satisfying, convenient and affordable alternative. “An open system gives them a wider variety of flavors from which to find one or two that work for them as an alternative to what they are using. They’re also are a lot more cost-effective. Once people try it, they’re willing to refill a pod to use the product they like. That touches back on the educational aspect we discussed. It looks complicated, but after the first time you use it, you realize it is fairly convenient, and you can choose any flavor you want. That is the beauty of the open system.”
The Flavor of Success
Along with its open-system approach, Solace prides itself on offering a wide array of unique flavors and building a brand that stands for quality. “We have an incredible team who are all passionate about what they do,” says Anwar, who says the company’s products are manufactured in Los Angeles. “We constantly make sure everything is of quality and that we are listening to our customers, doing things right and, overall, helping the industry. This was never about making a quick buck; it was about building a brand that could have impact and ultimately change lives.”
Solace is already a significant player in the market, with a reported $3.7 million in sales, and the company expects to continue its rapid growth trajectory, especially once the U.S. Food and Drug Administration (FDA) regulation of the industry goes into effect. Solace, which had products on the market before the agency’s predicate date of Aug. 8, 2016, is also closely following the FDA’s regulatory proposals and adjusting its practices to stay ahead of any mandates on packaging, promotion and manufacturing that are likely to be enacted.
“We are trying to stay ahead in terms of compliance, making sure we do things that will positively impact not only us but the industry,” says Anwar. “We hope that everyone in the industry sees that we all need to work together to do things responsibly so that there isn’t so much negative attention, because obviously that [has the potential to] change the way the FDA is viewing these products. So I’m hoping the FDA still sees the benefit and that their regulatory position lets brands continue to grow by doing it responsibly.”
With regulation, Anwar expects to see a winnowing of the field as companies without the resources to navigate the FDA’s premarket tobacco product approval process fold up their tents or sell out to larger tobacco firms. While Solace’s founders haven’t ruled out the possibility of cashing out, neither is an exit strategy uppermost in their minds, according to Anwar.
“It is a little early to say exactly what will happen now,” he says. “At the end of the day, we come into the office every morning and ask ourselves, ‘How can we get better today? How can we continue servicing our customers, developing our brand and growing and spreading awareness about nicotine salts as an alternative for cigarettes?’ We are taking it day by day and hoping we continue to have a name in this industry and grow our brand to be among those who are in it for the long term.”
This story first appeared in the September/October 2018 issue of Tobacco Business magazine. Members of the tobacco industry are eligible for a complimentary subscription to our magazine. Click here for details.
– Story Jennifer Gelfand, editor-in-chief of Tobacco Business Magazine. Photos courtesy of Solace Technologies.