Vapor products seem to have hit a rocky patch in the US and it is possible that only well thought out regulation will help smooth the way ahead.
Bonnie Herzog, the managing director of Beverage, Tobacco & Convenience Store Research at Wells Fargo Securities, says that a survey her group had conducted among about 20,000 tobacco retailer and wholesaler contacts had thrown up a few ‘calls to action’.
They wanted the Food and Drug Administration to take the lead in better informing the public about the relative risks of vaping and smoking. They wanted the industry to work together to push for vapor products to be granted modified risk status so that the public perception of these products did not deteriorate further. And they wanted vape shops to be regulated more closely so that they did not undermine the industry’s reputation.
The survey uncovered also that retailers have been ‘somewhat underwhelmed’ by the larger devices that are coming on to the market and that are meant to bridge the gap between traditional electronic cigarettes and VTMs. Retailers believe that about 75 percent of the sales of these products will cannibalize existing sales rather than generate incremental sales.
Nevertheless, Herzog said she remained cautiously optimistic by technological innovation in the vapour-products category.
And she remains bullish long term, believing that the consumption of vapor and other non-combustibles, such as heat-not-burn products, could surpass consumption of combustible cigarettes by 2023. ‘We continue to believe that technological innovation is crucial and that Big Tobacco will be pivotal in shaping the non-combustible nicotine industry,’ she wrote.
Her bullish stance is not altogether surprising. Herzog reported that vapor category growth in c-stores remained robust: at 17 percent in the fourth quarter of last year, though down on the 21 percent the third quarter. Repeat vapor product purchases are said to have accelerated to 60 percent in the fourth quarter from 57 percent in the third quarter.