Observations Yankee Doodling

The battle between big tobacco and vape shops

BMJ 2014; 349 doi: https://doi.org/10.1136/bmj.g5810 (Published 26 September 2014) Cite this as: BMJ 2014;349:g5810
  1. Douglas Kamerow, senior scholar, Robert Graham Center for policy studies in primary care, and associate editor, The BMJ
  1. dkamerow{at}aafp.org

Despite vigorous promotion e-cigarette sales seem to be going down

Electronic cigarettes seem to be everywhere. Characters on the US television show Saturday Night Live smoke them to look cool1; the movie The Hangover Part III portrays mob kingpins as e-cigarette users; and e-cigarette companies are now paying for product placement in movies (which manufacturers of conventional tobacco cigarettes are not permitted to do).2

As the debate continues about whether e-cigarettes are a threat to public health or, paradoxically, our best hope to rescue the world from the death and devastation of tobacco products,3 big tobacco continues its relentless march to take over the e-cigarette market.

Lorillard was the first of the “big three” tobacco companies to enter the e-cigarette business in 2012. Its Blu brand disposables are the best selling of the first generation e-cigarettes, which contain a non-rechargeable battery, a vaporizing system, and a disposable cartridge of liquid nicotine, and are sized and shaped to look like a tobacco cigarette. These “cigalikes” even glow at the tip when you inhale. They compete with the disposable e-cigarettes produced by (relatively) small companies that are independent of the tobacco industry and were the pioneers in e-cigarettes, such as NJOY. You can buy individual cigalikes for under $10 (£6; €8) or purchase them in bulk for about $5 apiece. One disposable e-cigarette is equivalent to a pack or more of tobacco cigarettes.

Now the other members of the big three have joined the e-cigarette market. In 2013 RJ Reynolds, makers of Camel and Pall Mall brands, launched Vuse, their second generation “digital vapor cigarettes,” which have rechargeable batteries and replaceable nicotine cartridges. You can buy a starter kit for $10 that includes a plain or menthol nicotine cartridge, a rechargeable power unit, and a USB charger. Altria, maker of Marlboro, bought the e-cigarette company Green Smoke in April 2014, and it is now introducing its own brand of rechargeable e-cigarettes, MarkTen.

Tobacco companies sell their e-cigarettes in convenience stores, such as 7-Eleven, where 70% of cigarettes in the United States are sold. They already have the distribution system and shelf space, and the e-cigarettes fit in perfectly with the existing tobacco products. My local convenience store carries multiple versions and flavors of Blu and Vuse interspersed among the Newports and Kools (figure).

Convenience store sales are the major source of e-cigarette sales data, which show the colossal growth of e-cigarette sales from $2m in 2009 to more than $710m in 2013.4 But, surprisingly, e-cigarette sales at convenience stores have gone down recently.

Lorillard’s e-cigarette sales fell 23% to $88m in the first six months of 2014. Although this was partly due to increased sales of Vuse and MarkTen, overall e-cigarette sales at convenience stores fell 7.5% in July 2014. When you add data from supermarkets and drugstores, e-cigarette sales are up only 12% this year, compared with 150% annual increases in 2012 and 2013.4

How does this decline square with estimates that total sales of nicotine vapor products will hit $2.5bn this year, a large increase over 2013?4 The answer is the fastest growing seller of nicotine vapor products: independent “vape shops” that sell a range of rechargeable, refillable nicotine delivery systems and allow users to combine devices, flavors, and concentrations at lower costs than cigalikes. Vape shops generally don’t sell Altria, RJ Reynolds, or Lorillard products.

The exact number of existing vape shops is unknown, but one estimate is that the number has more than tripled to 35 000 in the last year in the US alone.4 These shops, which range from independent one-offs to small city or regional chains, and the internet are the current growth centers for e-cigarette sales.

Did tobacco companies bet on the wrong marketing system for their products? Possibly, but they have huge market clout and have only just begun to ramp up their availability in stores that sell tobacco products. Altria and RJ Reynolds plan to place their products across their vast distribution networks, ultimately reaching more than 300 000 US stores.4 They have also moved rapidly into the production of rechargeable vaping devices and multiple flavors, as you might find in a vape shop. Lorillard’s Blu now comes in cherry crush, piña colada, and peach schnapps flavors, among others.

Given their reach and deep pockets—both Altria and RJ Reynolds are spending more than $150m this year alone to roll out their products—it would seem unwise to bet against their success. Further, when the Food and Drug Administration begins its proposed review process, the e-cigarettes backed by tobacco companies will have the resources and experience needed to comply with regulatory requirements.

I don’t think the vape shops have a chance in the long term. My guess is that they will stop being industry leaders and their rows of colored bottles of poison5 will become under-the-counter goods over the next few years. Which makes it all the more urgent to regulate nicotine vapor products of all types and to research their uses and abuses.

Notes

Cite this as: BMJ 2014;349:g5810

Footnotes

  • Competing interests: None declared.

  • Provenance and peer review: Commissioned; not peer reviewed.

References

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