Wells Fargo Securities survey highlights pressure on tobacco cigarette market
In what is becoming something of a pattern around the world, the latest Wells Fargo Securities Tobacco Talk survey has further highlighted ongoing migration from traditional tobacco cigarettes to electronic cigarettes and vapor devices. This is something which was recently credited with pushing the rate of smoking in the UK down below 20% for the first time in 80 years. So, are we seeing a similar situation emerging in the US?
When looking at alternatives to tobacco cigarettes the two more prominent products are electronic cigarettes and vapor products. These are devices which are relatively new to the main market although they have been around in some shape or form for many years. So, what impact are they having on the tobacco cigarette market in the US?
Retailers switching shelf space
While many statistics can be slanted to give a certain impression there are some very interesting numbers in this Wells Fargo Securities survey. Perhaps the most prominent statistic is the fact that shelf space amongst 30,000 convenience stores across the US is changing shape. We have seen an increase of 31% in the level of shelf space given to electronic cigarettes over the last 12 months. This in itself is a very interesting fact and one which seems to have gone unnoticed by the US regulatory authorities which still continue to drag their heels.
Even though electronic cigarettes always seem to grab the headlines it is interesting to see that growth in electronic cigarette sales has dipped slightly although the sector is still forecast to grow by 20% per annum for the foreseeable future. If this is a disappointing figure, we are sure it is something that the electronic cigarette industry can live with!
Switch to vapor devices
Vapor devices come in all shapes, sizes and forms, in effect offering something for everybody looking down this particular avenue. While these products tend to be overshadowed by electronic cigarettes, especially those which look like traditional tobacco cigarettes, there seems to have been a change in the marketplace. While electronic cigarette sales have dipped slightly, although still growing at around 20% per annum, it seems that vapor products such as tanks and open systems are growing in popularity.
There is a suspicion among some parties that while increased sales for vapor devices will assist the electronic cigarette industry in the long-term, these products could overshadow their electronic cigarette counterparts in the short-term.
There is no doubt that between electronic cigarettes and vapor devices the tobacco cigarette industry is stuck in a pincer movement. Even though electronic cigarettes are seen by many as the leader in this particular field there is evidence to suggest that vapor devices, tanks and open systems are gaining market share. It will be interesting to see how this develops in the short to medium term with some retail experts predicting that the number of electronic cigarette smokers in the US will outnumber their tobacco cigarette counterparts within the next decade.
One interesting fact buried away in this Tobacco Talk survey is the very impressive 60% reorder rate which now seems to be commonplace across the electronic cigarette industry. This would seem to indicate that electronic cigarettes and vapor devices are not just a passing fashion and are most certainly here for the long-term.
Mark Benson is a contributing author for Spinfuel eMagazine. His continuing columns will bring a level headed approach to the dynamics involved in realizing a positive future for the e-cigarette industry. For more information on electronic cigarettes and the various products available please visit the OKCigs website