Herzog now estimates mods/e-liquid sales up to $1.5 Billion, cigalike sales down to $1 Billion in US this year

[Bill Godshall]

Below are Bonnie Herzog's latest estimates of 2014 US sales of cigalikes (she calls them e-cigarettes) at $1 Billion and of vapors/tanks/mods at $1.5 Billion.

Contrast this with Bonnie Herzog's May 27 estimates (at the bottom of this post) of 2014 US sales of cigalikes at $1.4 Billion and of vapors/tanks/mods at $1.1 Billion.

And since the cost of using mods and e-liquid is far lower (probably 67% - 75% lower) than the cost of using cigalikes, it appears that far more cigalike users have switched to mods and e-liquid during the past year than anyone has estimated or predicted.

This also explains why Altria, Reynolds and Lorillard (and NJOY, FIN, LOGIC) increasingly want the FDA to impose the deeming regulation and ban mods and e-liquid (as otherwise, the cigalike segment of the e-cig industry will continue to decline as mods and e-liquid continue to skyrocket).

- - - -

Exhibit 1. Estimated 2014E $ Sales of the U.S. Vapor Market (September 16, 2014)

Vapor Market Size $2.5B

E-Cigarettes $1.0B
Tracked Channels (Nielsen) $700M
Non-Tracked Channels $300M
- Online $150M
- Other $150M*

Vapors/Tanks/Mods $1.5B
Online $500M
Vape Shops/Retail $1,000M

Source: Nielsen C-Store Database, Wells Fargo Securities, LLC estimates
*Other Non-Tracked channels include tobacco-only outlets and other e-cig retail locations.

- - - - - -

Exhibit 1. Estimated Size of the Vapor Market (May 27, 2014)

Vapor Market Size $2.5B

E-Cigarettes $1.4B
Tracked Channels (Nielsen) $700M
Non-Tracked Channels $700M
- Online $350M
- Other $350M*

Vapors/Tanks/Mods $1.1B
Online $300M
Vape Shops/Retail $800M

Source: Nielsen C-Store Database, Wells Fargo Securities, LLC estimates
*Other Non-Tracked channels include tobacco-only outlets and other e-cig retail locations.

 

[Kent C]

In Ohio... (there's a built in 'lag' for various 'new stuff' making it to the Midwest from the coasts , the 'tobacco-only outlets' (not vapor lounges) ... started selling 2nd gen. eGo style ecigs with Vision-type toppers about mid-summer this year. Before that, only cigalikes and most of them disposables. The one store where I stopped only had two 'new items' along those lines. Now, they are taking up about 1/3 of the ecigarette shelf space.

 

[Nate760]

This also explains why Altria, Reynolds and Lorillard (and NJOY, FIN, LOGIC) increasingly want the FDA to impose the deeming regulation and ban mods and e-liquid (as otherwise, the cigalike segment of the e-cig industry will continue to decline as mods and e-liquid continue to skyrocket.

I don't know that NJoy belongs in that group anymore, as they've begun making an aggressive move away from disposables and toward tanks/rechargeables just in the past few weeks.

 

[Bill Godshall]

If $1.5 Billion of mods/e-liquid and if $1 Billion of cigalikes are sold this year (which I think is about right), since mods/e-liquid cost an average of 25%-33% of the price of cigalikes, mods/e-liquid are now outselling cigalikes by 4.5 - 6 times (in terms of nicotine consumption).

Due to the huge price difference between mods/e-liquid and cigalikes, and similar price difference between mods/e-liquid and cigarettes, the Big Tobacco companies are going to increasingly pressure the FDA (via the deeming regulation) and state legislatures (via taxation, licensing and other regs on e-cigs), to protect their cigalikes from market competition by mods/e-liquid.

We can also expect Big Tobacco companies and other large cigalike companies to increasingly repeat the false fear mongering claims about e-liquid poisoning children, and about vaporizers being used for illegal drugs, and to lobby for laws that ban or severely restrict sales and marketing of mods and e-liquid.

 

[Bill Godshall]

Nate wrote:

I don't know that NJoy belongs in that group anymore, as they've begun making an aggressive move away from disposables and toward tanks/rechargeables just in the past few weeks.

Please provide some evidence including weblinks (as I've been urging the Weiss brothers, who own and run NJOY, to do so for the past several years).
About a month ago, NJOY began selling lots of different flavored cigalikes (after publicly urging FDA to ban flavored e-cigs a year ago).

 

[NorthOfAtlanta]

Here you go Bill.

https://www.njoy.com/vaping/e-liquids/vape-tanks/10-pack

 

[Kent C]

If $1.5 Billion of mods/e-liquid and if $1 Billion of cigalikes are sold this year (which I think is about right), since mods/e-liquid cost an average of 25%-33% of the price of cigalikes, mods/e-liquid are now outselling cigalikes by 4.5 - 6 times (in terms of nicotine consumption).

Due to the huge price difference between mods/e-liquid and cigalikes, and similar price difference between mods/e-liquid and cigarettes, the Big Tobacco companies are going to increasingly pressure the FDA (via the deeming regulation) and state legislatures (via taxation, licensing and other regs on e-cigs), to protect their cigalikes from market competition by mods/e-liquid.

We can also expect Big Tobacco companies and other large cigalike companies to increasingly repeat the false fear mongering claims about e-liquid poisoning children, and about vaporizers being used for illegal drugs, and to lobby for laws that ban or severely restrict sales and marketing of mods and e-liquid.

And we could expect that may be what the FDA's "workshop" is all about, (as you've stated in that thread) rather than gathering scientific data. The can claim that they even have 'ecig manufacturers' who agree with their deeming.

 

[Kent C]

Here you go Bill.

https://www.njoy.com/vaping/e-liquids/vape-tanks/10-pack

I also see there are hacks/mods for the Vuse, Mark Ten, etc. disposables for making refills. Who didn't know that would happen? Again, regarding the black market, they have no idea.

 

[Stosh]

Here you go Bill.

https://www.njoy.com/vaping/e-liquids/vape-tanks/10-pack

WOW, they have really thrown down the gauntlet....they have Single Malt Scotch flavor eliquid. I haven't bought pre-mixed eliquid in years but NJoy may get a new customer.

(the children should love it...)

 

[DC2]

If $1.5 Billion of mods/e-liquid and if $1 Billion of cigalikes are sold this year (which I think is about right), since mods/e-liquid cost an average of 25%-33% of the price of cigalikes, mods/e-liquid are now outselling cigalikes by 4.5 - 6 times (in terms of nicotine consumption).

Due to the huge price difference between mods/e-liquid and cigalikes, and similar price difference between mods/e-liquid and cigarettes, the Big Tobacco companies are going to increasingly pressure the FDA (via the deeming regulation) and state legislatures (via taxation, licensing and other regs on e-cigs), to protect their cigalikes from market competition by mods/e-liquid.

We can also expect Big Tobacco companies and other large cigalike companies to increasingly repeat the false fear mongering claims about e-liquid poisoning children, and about vaporizers being used for illegal drugs, and to lobby for laws that ban or severely restrict sales and marketing of mods and e-liquid.

It's the only logical thing to do, and it's what we've seen them starting to do.

 

[Nate760]

Please provide some evidence including weblinks (as I've been urging the Weiss brothers, who own and run NJOY, to do so for the past several years). About a month ago, NJOY began selling lots of different flavored cigalikes (after publicly urging FDA to ban flavored e-cigs a year ago).

They came out with a line of tanks/liquids last month ( https://www.njoy.com/vaping ) at the same time they released their new rechargeable kits. I've got a connection with one of the higher-ups in their customer service division, so I've already been sent a complimentary Recharge kit (it's easily the best performing small-profile cigalike I've ever tried), and my complimentary tank should be arriving today. According to my conversations with the aforementioned connection, the company's executive leadership plans on moving its core business away from the disposables and toward the tanks/rechargeables. I get the impression that there's been a legitimate change in direction/philosophy and this is not merely a token gimmick. So it seems your urging may have paid some dividends.

 

[NorthOfAtlanta]

Shows the difference between a multi-billion dollar company who thinks it's easier to get the government to protect their product and a smaller one that can change direction with the market.

Yeah BT and BP we're looking at you.

 

[Jingles]

I just got a free recharge kit from NJOY this week too. I guess I'm on their mailing list. They're OK. They wont replace my MVP or Vamo, but could be handy for stealth vaping.

 

[Nate760]

Shows the difference between a multi-billion dollar company who thinks it's easier to get the government to protect their product and a smaller one that can change direction with the market.

Yeah BT and BP we're looking at you.

Six months ago, I was one of the loudest voices calling NJoy out for being in bed with BT and conducting themselves like a tobacco company in all but name (and I still believe those were perfectly valid criticisms at the time). This change in direction on their part is thus very surprising, but also very welcome, and I give them credit for having the courage to do it.

 

[Nate760]

I just got a free recharge kit from NJOY this week too. I guess I'm on their mailing list. They're OK. They wont replace my MVP or Vamo, but could be handy for stealth vaping.

Above all, I'm really impressed with the engineering work they did on the batteries. Normally, batteries that small (I'm looking at you, Blu) are all but worthless, underpowered, burn out within a few hours, and take longer to charge than they actually last in use. The NJoy battery, on the other hand, charges in less than an hour and runs for a solid couple days of moderate use. Similarly, the cartos seem to have an impressive lifespan for as small as they are. I probably only do about 30% of my vaping with cigalikes (mostly when I'm driving), but the first two cartos lasted almost a full week.

To be honest, when the kit came in the mail and I saw how tiny the things were, I assumed they'd have all the same performance/lifespan issues that every other similarly-sized product does. I also, quite frankly, had no particular reason to believe NJoy was capable of delivering a well-engineered, good-performing product. It was a pleasant surprise to find I was wrong. I'd love to know the specifics of how their R&D people managed to solve (or at least mitigate) all the problems that normally bedevil the products in that class, because it seems they did a really good job of it.

 

[Rickajho]

Six months ago, I was one of the loudest voices calling NJoy out for being in bed with BT and conducting themselves like a tobacco company in all but name (and I still believe those were perfectly valid criticisms at the time). This change in direction on their part is thus very surprising, but also very welcome, and I give them credit for having the courage to do it.

Ok. Now if we could only get nJoy to stop referring to their new devices as "vape pens" and their CE4 clearo as a "cartomizer system". Sigh... Baby steps... Baby steps...

 

[dragonpuff]

I'm glad to hear Njoy is catching up

Apparently they are not too concerned about big tobacco trying to corner the market by manipulating the government, otherwise they wouldn't have invested so much time and money in developing their own proprietary refillable system... so does that mean we have less to worry about? Perhaps they know something we don't?

Also, how are you guys getting these free sample kits from them, and how do I get one?

 

[Bill Godshall]

Apparently they are not too concerned about big tobacco trying to corner the market by manipulating the government, otherwise they wouldn't have invested so much time and money in developing their own proprietary refillable system... so does that mean we have less to worry about? Perhaps they know something we don't?

The owners and execs of NJOY knew that sales and market share of their cigalike products have declined every month since November 2013, and they wanted to stay in business at least another three years (when FDA's premarket approval for e-cig products would be required if/when deeming reg is given final approval).

It would be helpful if someone found and posted NJOY's comments to the FDA (as my searches on FDA's website haven't found anything, although it appears that FDA's searching system isn't working properly).

 

[StarreLabelle]

Once people understand that vaping with eliquid and a good non disposable device is superior and far less costly than the horrid cigalikes, of course they switch. The only tolerable cigalike I've tried is the vanilla Blu, but it's more expensive than a pack of cigarettes and doesn't last long.
I hope people put pressure on the FDA so we aren't sold out. Some of the cigalikes also sell non disposable units, like the aforementioned Blu. So, these other cigalike makers should follow suit; there's still money to be made in the MODS and eliquid industry, as it's in it's infancy.

 

[StarreLabelle]

Above all, I'm really impressed with the engineering work they did on the batteries. Normally, batteries that small (I'm looking at you, Blu) are all but worthless, underpowered, burn out within a few hours, and take longer to charge than they actually last in use. The NJoy battery, on the other hand, charges in less than an hour and runs for a solid couple days of moderate use. Similarly, the cartos seem to have an impressive lifespan for as small as they are. I probably only do about 30% of my vaping with cigalikes (mostly when I'm driving), but the first two cartos lasted almost a full week.

To be honest, when the kit came in the mail and I saw how tiny the things were, I assumed they'd have all the same performance/lifespan issues that every other similarly-sized product does. I also, quite frankly, had no particular reason to believe NJoy was capable of delivering a well-engineered, good-performing product. It was a pleasant surprise to find I was wrong. I'd love to know the specifics of how their R&D people managed to solve (or at least mitigate) all the problems that normally bedevil the products in that class, because it seems they did a really good job of it.

Njoy must have improved upon the taste, as the disposable I vaped was disgusting. Blu has far better disposables, but I've never tried either brands non disposables, and don't plan on starting. I'm not impressed with Njoy if they play both ends against the middle. I hope it comes back to bite em.