E-cigs: Not so fast - Tobacco analyst sees slower growth for industry's hottest segment

[AegisPrime]

E-cigs: Not so fast

Could the electronic-cigarette craze be the dot-com bubble ready to burst or tobacco's version of energy drinks to the cold vault less than a decade ago?

Somewhere in between, said tobacco analyst Nik Modi

Modi suspects that while electronic cigarettes are enjoying a phenomenal trial period, the percentage of smokers sticking with e-cigarettes is relatively small and yielding far less impact on the cigarette category as initially believed.

It's interesting that BT seems to view e-cigs and vaping as almost unrelated - their interest lies in taking the lion's share of convenience store cigalike purchasing, the mod scene, whilst acknowledged doesn't seem to interest (or concern them) at all.

 

[Erncig]

What a bunch of BS. Anyone who compares a legit product like ecigs to an investment craze based on non profitable companies used in the dot come crash, simply doenst know what they are talking about.

 

[AegisPrime]

I think it's interesting that BT seems to regard e-cigs and vaping as two completely separate things - their intent is to take the lion's share of the cigalike covenience store products (Blu, Njoy etc.) but they seem to regard the mod/PV scene as irrelevant.

There's a danger for them that their investment in e-cigs won't amass the returns they're hoping for since I can't see anyone sticking with products like the MarkTen for long - either their customers are going to return to smoking or they'll move on to a PV.

That's not to say there isn't money to be made in the cigalike market - arguably there's more sales going on there right now than there is on the PV side but cigalikes are transitional - no vaper is going to stay there if there's a cheaper/better alternative.

What BT needs to do to stay relevant is throw its full weight behind e-cigs - market their own e-liquids and hardware to appeal across the full spectrum of vaping otherwise they'll eventually find themselves where they are now - selling a product to a crowded and diminishing market.

They also need to start lobbying for vaping to become an acceptable and healthier alternative to smoking - the less restrictions imposed on vapers, the more potential customers they'll have to sell to.

 

[Orb Skewer]

1st generation product, nuff said.

 

[AegisPrime]

1st generation product, nuff said.

Well let's face it - tobacco companies aren't consumer electronics companies - and they've been selling essentially the same product, unchanged for decades now - they have no idea how to compete in this rapidly evolving market space (hence the purchase of brands such as Blu and Skycig).

They figure so long as people are hooked on nicotine and they have a recognisable retail presence and brand in stores and gas stations that they'll carry on making billions - just with cigalikes instead of cigarettes. I'm sure there's people in the companies they've purchased that have some great ideas about better products and the market that exists for them, the question is, will the oligarchy listen to them?

 

[RosaJ]

They're counting on the convenience factor that people can buy their ecigs at the same places where they got their cigarettes. Something must be said for this. It takes a lot more effort to figure out where our forum is (for someone who doesn't know it exists), and much more to do the research of what kind of mods and atties are available, etc. Many people may just opt to go to their corner store and get a cigalike. That is not to say that their ecig customers will stay with the BT products.

I don't for one minute believe BT is lazy in their thinking, they have the money to pay marketing and human behavior experts to advice them.

 

[AegisPrime]

I don't for one minute believe BT is lazy in their thinking, they have the money to pay marketing and human behavior experts to advice them.

Lazy might not be the right word - entrenched perhaps - and of course, look at Kodak.

"There's been a lot of talk about e-cigarettes taking share from cigarettes," he said during Thursday's webinar, which also featured a presentation by Swedish Match category management director Joe Teller.

"But the numbers don't suggest that," said Modi. "We found that the actual industry decline rate for cigarettes improved as 2013 progressed--at the same time everyone was claiming e-cigs were taking shares away."

This is from a BT analyst - he's basically suggested that less people are quitting smoking so that the impact on cessation to e-cigs has been overstated - and completely ignoring the fact that e-cigarette sales have been growing exponentially.

Or in other words "We didn't lose as many customers as some have suggested so e-cigs don't pose as big a threat as we thought".

 

[Orb Skewer]

This is BT propaganda, for example, there are now several million e-cig users/Vapers-where did they all come from ? Mars ?
Their (leaf products) sales might be climbing slightly-but not in developed countries (they have lost several million cattle to date), they have shifted their circus to the far east and southern African countries, they know what they are doing alright, once the governments of the developed world have castrated 'vaping' as they are doing in the EU-then ***-O-like sales will soar, because thats the only product that will be widely available/usable.
BigT and BigP are going to slice this market up and share it between them-and throw scraps ($£e) in the direction of the governments that have 'paved' the way for this master plan, or, is whats going on in the EU and the States just a 'wobble' ?.

This is how I see it going-other opinions are of course as conjecturally valid.

 

[skoony]

i am of the opinion though that cigalikes will be around with us for quite a while.
they still are the most convenient form factor considering all the bans being put in place.
small,durable,and concealable. BT knows this too.
BT is playing both sides of the fence on this one.its a win win for them either way it goes.

regards
mike

 

[NorthOfAtlanta]

i am of the opinion though that cigalikes will be around with us for quite a while.
they still are the most convenient form factor considering all the bans being put in place.
small,durable,and concealable. BT knows this too.
BT is playing both sides of the fence on this one.its a win win for them either way it goes.

regards
mike

Or trying to shut down any competition so they can then come out with new, improved, larger and longer lasting


-------wait for it-------


APV's.

 

[Orb Skewer]

***-O-likes might be the only thing left around Skoony-that is the worry, 1st generation products will never be anything other than 1st generation products, you cant make an 80mAh battery into a silk purse.

 

[Thomasis]

I find it interesting that they are trying to "marginalize" the PV market as saying their sales aren't down but like stated above it was not disclosed where their sales had increased and where they have decreased. If they can convince the FDA that vapers are a small percentage of nicotine users we might fall in to a bad place. As an example look at Obamacare and I quote "If you like your plan you can keep it". Unless your one of the 5 million people that LOST coverage cause that few of people really dont count. I'm not turning this in to a political arena, I'm just trying to get people to see how well our government likes to marginalize people BEFORE they take things away from a particular sect of population. Marginalizing US as VAPERS will be the first thing they do.

 

[rothenbj]

I think it's interesting that BT seems to regard e-cigs and vaping as two completely separate things - their intent is to take the lion's share of the cigalike covenience store products (Blu, Njoy etc.) but they seem to regard the mod/PV scene as irrelevant.

There's a danger for them that their investment in e-cigs won't amass the returns they're hoping for since I can't see anyone sticking with products like the MarkTen for long - either their customers are going to return to smoking or they'll move on to a PV.

That's not to say there isn't money to be made in the cigalike market - arguably there's more sales going on there right now than there is on the PV side but cigalikes are transitional - no vaper is going to stay there if there's a cheaper/better alternative.

What BT needs to do to stay relevant is throw its full weight behind e-cigs - market their own e-liquids and hardware to appeal across the full spectrum of vaping otherwise they'll eventually find themselves where they are now - selling a product to a crowded and diminishing market.

They also need to start lobbying for vaping to become an acceptable and healthier alternative to smoking - the less restrictions imposed on vapers, the more potential customers they'll have to sell to.

That's one approach. Another is to provide the pharma model. Work with the government to hake their style e cig the only viable alternative on the market via deeming regulation. Control battery size (for safety), eliminate all but pre-filled cartos (for safety and to protect the children, restrict flavors (protect the children), ban internet sales (protect the children) and tobacco licensing.

Basically those "society valued" rules will eliminate all but the few who will go black market from moving past the cigalikes. People will move between the two products. Use the e cig for a while, then back to smoking. Market the new improved e cig later for those wanting to try to stop smoking and be there for them when they fail. Basically, they can replace BP in selling the snake oil until maybe they control the whole market and get the FDA loosen the technology requirements.

Not saying this is the approach they'll take, but BT is very good, like most huge corporations, at getting the government to do what's in the corporations best interest.

 

[edyle]

What a bunch of BS. Anyone who compares a legit product like ecigs to an investment craze based on non profitable companies used in the dot come crash, simply doenst know what they are talking about.

It's a point of view magazine "The source for convenience store and fuel news"; retailer point of view.

 

[Cyberslinger]

Ecigs are Gen1. The real advances in this tech, on a consumer level, are just starting. In the next year we will see advanced APVs in beautiful form factors with low cost, pre-sealed tanks of gourmet juice. When this product hits the market there will be a true ahah moment for the population and there will be no stopping it. All of this is happening right now. The future is not in ecigs. The future is not with big tobacco (NO ONE trusts them). The future is with startups. They're never gonna know what hit em and by the time they do... It will be to late.

Find the right company and invest early. I believe Facebook money can be made.

 

[edyle]

"The advocacy of the product is still very poor and the repeat rates are not very good" with e-cigs, Modi said, adding that significant innovation in quality and consistency is still needed if e-cigarettes are to enjoy the staying power many hope for. "These transitions take a lot of time, and there's still a lot of uncertainty involving this category."

Despite his caution, Modi said e-cigarettes will continue to grow and that retailers, notably in convenience, are increasing space for the nascent segment. In an exclusive study conducted with CSP earlier this month, Modi shared that 80% of convenience retailers are expanding their e-cigarette offerings and that 95% said they planned to carry Vuse, the e-cigarette product by RJ Reynolds that is to be rolled out nationally this coming year.

I'd say that sounds right on the button.

The technology is still not past a certain critical point in development.

 

[rothenbj]

Ecigs are Gen1. The real advances in this tech, on a consumer level, are just starting. In the next year we will see advanced APVs in beautiful form factors with low cost, pre-sealed tanks of gourmet juice. When this product hits the market there will be a true ahah moment for the population and there will be no stopping it. All of this is happening right now. The future is not in ecigs. The future is not with big tobacco (NO ONE trusts them). The future is with startups. They're never gonna know what hit em and by the time they do... It will be to late.

Find the right company and invest early. I believe Facebook money can be made.

That sounds like some pre-marketing hoopla. Is this a statement of science fiction or knowledge of a fledgling company? For the form factor statement to be true, and I'm assuming you mean size wise, a much more effective and safe battery would be required IMHO.

 

[edyle]

Could vaping--and the rise of vaping lounges--deliver an entirely new business model that potentially undercuts the sale of disposable and rechargeable e-cigarettes in c-stores?

In a Google search of both "electronic cigarettes" and "vapor shops," Modi said interest in the former peaked between February 2012 and January 2013, while the latter continues to climb.

"The consumer work we've done in this area shows [vaping] is catching up like wildfire. It's cheaper, the consumer can customize it, there's an experience involved [with the vape shops]," he said.

To me that is reminicent of what many talk about here on ecf


e-cig =========== cigalike
vapor =========== APV / rebuildable

 

[Cyberslinger]

It's not science fiction. And It's the next logical step in the evolution.