As our recent infographic depicts, it is already far more cost effective to vape than it is to smoke. The savings made every year can grow into the thousands, freeing up much-needed cash for millions of Americans. Now, financial analysts Wells Fargo are reporting that the gap between cigarette and e cig prices is set to increase even further.
Wells Fargos tobacco Talk survey has indicated that the price of tobacco looks set to increase this year, potentially as early as this month. Counteractively, electronic cigarette prices have largely stayed the same or have decreased in some cases. The analysts surveyed 45,000 retail locations around the country and found that more than half (59%) have recorded steady e cig prices and nearly a quarter (23%) have reported a drop in price of up to 10%.
As a relatively young industry, there are still many advances in production and technology being made in the world of electronic cigarettes. This is allowing for greater cost efficiency as the technology improves. Some retailers are reporting that they expect the price of electronic cigarettes to become even more economical.
One retailer suggested: E Cigs are too immature of a category to have a unified pricing theme, I expect pricing to plummet the next year.
Established companies are investing in more cost and energy efficient technologies to lower prices without compromising the quality and integrity of the products. Senior analyst Bonnie Herzog reported:
"Packaging changes are creating a more favorable dynamic in the e-cig market as technology improvements are resulting in smaller, sleeker, less bulky and less wasteful packaging in disposables and rechargeable e-cigs. A few respondents noted increases in multi-cartomizer pack interest as consumers more fully adopt e-cigs. These packs results in a much lower per-cartomizer cost.
"The improved packaging of e-cigs appears to be driving incremental consumer awareness and trial to the category. For rechargeable kits in particular, more efficient packaging of multi-cartomizer packs is likely driving the affordability gap wider of e-cigs versus traditional cigs, and this makes us that much more bullish on the category."
Tobacco companies are somewhat held to ransom by the high taxation that is attached to the product. This inhibits their ability to lower prices to meet public demand. Such prohibitions have contributed to the rising popularity of the electronic cigarette and have led to the latter taking a larger share of the market. This has also led to vapers making great savings every year if they have made the switch from traditional cigarettes.
The Price Difference between Cigarettes and E Cigs set to Increase
