In the face of adversity, Naked 100 readies itself for the challenges of submitting premarket tobacco product applications to the U.S. FDA.
By Timothy S. Donahue
It’s good to be Naked. In just a few short years, USA Vape Lab’s Naked 100 brand has become one of the hottest selling e-liquids in the world. The Naked 100 brand is so popular that some industry estimates have it being sold in over 9,300 brick-and-mortar vape shops across the U.S. Retailers say that Naked 100 e-liquids are so prevalent with vapers because the brand’s “expertly balanced flavor profiles” are perfectly suited for vaping. One shop owner claimed that Naked 100 flavors stay “fresh and bright as you vape” them.
According to Kristofer Manabat, the chief strategy officer atUSA Vape Lab, the company found success because its owners have always had a strong understanding of the vapor consumer and the constant challenges facing vape shop owners. After all, they had all owned or worked at vapor retailers before starting USA Vape Lab. Manabat, for example, was one of the driving forces behind the success of Vapor DNA, a major online vapor retailer.
“There are a few things that have helped us become a successful small business. It’s our high-quality products. It’s our approachable attitude,” says Manabat. “It is important to remember that all of the executives at USA Vape Lab came from the vapor retail segment, so there is a clear understanding of the consumer and the needs within a vape shop. One of our core business pillars is to focus on engagement with store owners, employees and consumers.”
Based in Southern California, USA Vape Lab’s 43,000-square-foot headquarters houses a 7,300-square-foot ISO 7-certified lab that only produces Naked 100, The Schwartz and a few small OEM brands, says Manabat, adding that USA Vape Lab moved into the new facility after outgrowing its previous location in less than two years.
“As we have grown and as market demand, especially for Naked, grew, it really squeezed and capped out our capacity,” he says. “This facility has been under construction since August of 2017, and we just moved our manufacturing component here in December of 2018.”
A better approach
USA Vape Lab began in 2015 with its The Schwartz brand e-liquid, which was designed for a specific palette and demographic, according to Manabat. He says it quickly became apparent that the company needed another brand that was more approachable to the everyday smokers that were quickly becoming everyday vapers. The company released the Naked brand (now Naked 100) in early 2016.
“E-liquid flavors were beginning to become more complex. We wanted a product that wasn’t. Naked 100 was simple, understandable and approachable. Many brands at the time were being very inclusive, catering to certain demographics and subcultures. They gravitated towards edgy or sophisticated, for example,” says Manabat. “Naked was not that. Naked 100 was very broad. To me, Naked 100 is the only brand that straddles the broad spectrum of the consumer landscape. It is a very inclusionary product.”
Then, in mid-2016, Naked began to hit an apex of sales, according to Manabat. “This was during a time period where the vapor market had witnessed numerous top brands reach the height of the market only to find out there was volatility at the top,” he explains. “There were several brands that grew very quickly, found success for a few months, maybe a year, and then fell completely out of favor with consumers, and that transitioned to the vape shop owners.”
Looking back at their retail experience, the owners of the company knew that availability was going to be a major factor in bucking the roller-coaster market trend and making Naked 100 a long-term success, according to Manabat. “There has to be accessibility for the consumer,” he says. “Transitory customers benefit from having the ability to access their favorite brand wherever they go.” In order to meet this challenge, Manabat says the company took on a grassroots approach and started visiting vape shops.
“We started to interface and go to the stores, put boots on the ground and interact face-to-face with everyone we could,” he says. “We continue to do this today. It is a shifting, improbable industry, and the customer (business owners and employees) and consumer matter most. I take calls from everyone all the time. Whether it’s a single store owner, a major vape shop chain owner or a Naked 100 user. We want to personally interact with all of our customers.”
The vapor market is always evolving. Manabat explains that in order to keep up with market changes, the company needed to continue to interact with it on a real level. It wasn’t going to let its success be the catalyst to its failure. The company doesn’t have a big fancy booth for shows or flashy labels that confuse customers. “We aren’t out to be something we are not,” says Manabat. “We are here to make a difference and help our customers help their customers become successful in accomplishing their goals.”
By early 2016, sales for the Naked 100 brand, with its simplistic approach and grassroots marketing, began to skyrocket. While other companies were producing flavors with multiple complicated layers—such as vanilla, graham cracker, marshmallow and strawberry aged in a bourbon barrel—Naked was making flavor profiles that “are more like music in the background,” says Manabat.
“In the early days of the industry, 2011, 2012 … flavors were more simplistic. We wanted to get back to that. We wanted to start with the concept of what vapers were looking for, and, I think, with a Naked 100 flavor, for example, it is less abrasive in day-to-day use … it is much more conducive to everyday use than a lot of other e-liquids.”
Finding the right flavor combinations can be challenging, according to Manabat. He says that while the fruit flavors category is broad, the actual number of fruit flavors that are vapeable is much lower. Finding these vape-friendly fruits helps Naked 100 create e-liquid flavors that stand out to consumers. “There are only a very small number of fruit flavors that break down and vape in a palatable way,” he says. “These are the flavorings we focus on. We want every experience with a Naked 100 product to exceed consumer expectations.”
Helping consumers understand what an e-liquid flavor is was also a goal of Naked 100, according to Manabat. He says that the names and labels of Naked 100 flavors clearly state what they are, and the main flavor component is easily recognized. “There is nothing obtuse about Naked 100,” he says. “What you see is what you get.”
Survival skills
Currently, USA Vape Lab, like most e-liquid manufacturers based in the U.S., is fighting for its survival. Manabat says that 80 percent to 85 percent of his day is centered around the company’s mission of submitting premarket tobacco product applications (PMTAs) to the U.S. Food and Drug Administration (FDA).
“Things are a little hectic around here as we go through the PMTA process … getting together the data. We are approaching it at full force,” says Manabat. “We have been preparing for this since we started, and in 2017, preparations really came into full gear.” The FDA’s PMTA deadline is May 12, 2020. Any products on the market that do not have a submitted PMTA by that date will be removed from the market.
Manabat says USA Vape Lab was waiting on the final guidance from the FDA, and, in his opinion, the challenges are quite profound. “It is this intersection of a small business undertaking a large business effort. It is difficult for small companies because we don’t have the expert skillset, the subject matter experts, the longitudinal history, the scientific backing and fundamentals of Big Tobacco or Big Pharma … we have our partners, and they are excellent and determined, but the challenges are gigantic.”
Manabat explained that the challenges of completing the PMTA and compiling the required data is one factor; however, the challenges outside the scope of submitting a PMTA are also growing with great amplitude. “Outside the PMTA, one of the more difficult things to navigate is that while we have a process for the PMTA, we have other forces at play altering the landscape,” he says. “For example, youth access; there is a lot of that in the media now, and it has a relationship to the PMTA … what we do today, we will have to explain why we did it that way tomorrow.”
Manabat says the issues faced by USA Vape Lab are going to be similar to what all small companies attempting to survive the PMTA process will face. He believes companies can succeed through these issues; however, they need to realize it is going to be a long, arduous process.
“We can confront and succeed against these issues, yes … but the PMTA is going to be difficult … the methodology of how to approach it. Our industry must explain to the FDA who flavored ENDS [electronic nicotine-delivery system] products are for and what they can provide users. What is going to be even more challenging is explaining and confronting these other forces that are shifting and evolving: public perception, legislation, legal action … there is just so much going on outside the PMTA process agenda.”
The best advice Manabat could offer small companies attempting to get a PMTA authorization is to take the time to build a relationship with the FDA. A company isn’t going to be successful if it challenges the regulatory agency every step of the way, he says.
“You have to interact with them in a professional, meaningful way,” Manabat explains. “You aren’t going to be the FDA’s best friend, but you need to have a relationship with the federal government for any consumer goods market. There are many companies that will not and cannot do the PMTA, but the ones that do must understand it needs to be a working relationship; it’s a robust process.”
In the end, Manabat says that USA Vape Lab is just a small company that cares about its employees and its customers. The company is huge on advocacy for the industry and will continue to show its support. Manabat says this is important because USA Vape Lab “owes it” to the other small vapor businesses seeking a PMTA. “We have to at least give it our best shot,” he says. “We want to be known as a company that did things the right way and blazed the trail for other companies to find success.”
Timothy Donahue
Timothy S. Donahue is the co-founder and managing editor of Vapor Voice.
Tim spends much of his time on the road, attending conferences and interviewing industry representatives.
His networking skills, work ethic and quick mind are valuable assets to our diverse audience.