Sunday, June 16, 2013

Electronic cigarettes seriously starting to surge

Judging by the latest flurry of media reports, it appears that electronic cigarette supporters might be on the verge of being proven correct about the enormous potential of e-cigs and vaping.This recent electronic cigarette news has generally revolved around the topics of regulation, market and consumer acceptance, and the entry of all three major tobacco companies into the e-cig market.

Media coverage, commentary and social media over the last several years seriously questioned the legitimacy, direction, future and acceptance of electronic cigarettes. So, just how do electronic cigarettes move from being little more than a strange, obscure and unknown phenomenon to universal acceptance as a consumer product?

One interesting market connection made by several business experts and financial analysts is comparing electronic cigarettes to the recent huge growth of energy drinks, which were once perceived as out of the mainstream, but are now almost as accepted as soda or coffee. According to, energy drink and shot sales grew 60 percent between 2008 and 2012, and totaled about $12.5 billion in 2012 with likely growth to $21.5 billion by 2017.

When it comes to oversight in the U.S., the Food & Drug Administration (FDA) currently considers electronic cigarettes along the lines of traditional tobacco, while state and local governments are looking at regulation and taxation issues.

Globally, countries are taking various routes on e-cig regulation. For example, a recent New York Times blog noted a battle between European regulators and retailers. While the British government is looking at e-cigs as medicinal, France might ban them in public and Italy would ban them in schools. Many e-cigs are actually manufactured in China, so it will be interesting to see how Asian countries move on regulation.

The Times’ blog noted that global e-cig sales increased 30 percent in each of the previous three years to around $2 billion in 2011 with the European market around $650 million, according to Euromonitor International. Retail sales of e-cigs in the U.S. reached $500 million last year. While that is only a small fraction of the overall tobacco market, those figures are rapidly increasing.

So far, the electronic cigarette industry has grown mainly through online websites and social media, but there is a steadily increasing retail presence, especially with the backing of major tobacco companies. Most forms of tobacco are sold in convenience stores as almost 40 percent of their revenues come from tobacco, but those numbers are dropping with fewer smokers and other competition.

Celebrities, entertainers and others have also helped promote electronic cigarettes. Early adopters a few years back like Leonardo Dicaprio, Katherine Heigl and Johnny Depp are certainly big names, but they didn’t seem to have much impact on the public acceptance of e-cigs.

More recently, it has been actual ads and investment by some lesser known celebs that might be bringing electronic cigarettes to the next level. Actor Stephen Dorff’s television ads for BluCigs, singer Bruno Mars and Silicon Valley entrepreneurs Sean Parker and Peter Thiel’s investment in NJoy, and musician/actress Courtney Love’s appropriately outrageous online ad for NJoy.

Financially, the major tobacco companies have finally joined the e-cig market. Lorillard saw electronic cigarette earnings increase with a specific reference to the previous $35 million purchase of Blu Cigs, Altria’s subsidiary Nu Mark recently announced plans to enter the e-cig market with the Mark Ten brand, and Reynolds American just launched its Vuse brand e-cigs.

Besides the high profile positive coverage of electronic cigarettes, there are stories appearing in other media outlets and even the online commentary reflect an anecdotal positive consumer reaction to e-cigs. As much as anything, it might just be these ex-smoker testimonials in the online comments in news stories and social media that show the strongest case for the benefits of electronic cigarettes.

E Cig Werks has followed and covered electronic cigarettes and the industry for almost three years with  34 posts, 10 brand reviews, and more than 1,400 Twitter followers while reading and commenting on more articles, columns and content that one can count.

Over that time, E Cig Werks has been one of many strong advocates of electronic cigarettes as a long-term product that can help consumers avoid tobacco, nicotine, odor and second-hand smoke.

While the future of electronic cigarettes looks pretty clear and bright now, there are still potential clouds of smoke regarding regulation, taxation and further public acceptance, but at least those clouds won’t smell.


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