Pod mods: your biggest profit opportunity?

Pod mods – those ‘click and go’ systems using a sleek vape pen and a series of disposable liquid pods – are increasingly dominant in the vaping market.

“Within the vaping category, capsule and refillable products are currently in growth and are now used by most adult UK vapers,” says Nick Geens, head of Logic and Reduced Risk Products at JTI.

Unsurprisingly, this has made major manufacturers set their sights on this corner of the market with sub-brands including JTI’s Logic Compact, Imperial’s myblu and BAT’s Vype ePod joining Juul to create core range of big brands.

Vape specialists don’t quite know how to deal with this new wave of products and can dismiss them as simply a “short term” entry point for recent quitters.

Doug Mutter, manufacturing and compliance director at vape retailer VPZ says: “Pods or Pod Kits are a small and simple-to-use device, targeted at absolute beginners, or people looking for something very discrete and with absolutely minimal fuss or maintenance.”

The expectation is that as users get used to vaping they will natural gravitate towards a more traditional ‘open’ system. That’s quite the assumption.

While some vapers may well move away from cartridge or pod-based system towards traditional e-liquids, it’s by no means that simple. In fact, there’s every reason to think that these products will continue to take over the vaping world.

Firstly, these products are simple – a point continually made by manufacturers. “The premium pod device offers a convenient and modern alternative to traditional vaping product,” says Nick Geens.

Another advantage e-liquids have had for many years is the sheer range of flavours available in comparison with so-called ‘closed’ systems such as pod mods. Yet the gap is closing. For example, myblu’s Liquipods and Intense Liquipods number a combined 15 flavours.

To get an understanding of how an up-to-date range needs to look, a recent report from Neilsen showed current pod sales split 36 percent for menthol, 34 percent for fruit flavours and 19 percent for tobacco.

Finally, for smokers who don’t want to say goodbye to the nicotine hit they get from cigarettes, nic salts – a type of e-liquid that uses a natural salt found in tobacco – mean these systems can deliver a more cigarette-like experience than ever before. This makes pod mod systems a more compelling long-term solution for smokers.

Duncan Cunningham, corporate affairs director at Imperial Tobacco & blu says: “Smokers also want and expect a nicotine delivery that is more like that of a traditional cigarette, something which our Intense range looks to satisfy, thanks to the inclusion of nicsalts.”

According to Neilsen data nic salts now represent 20% of pod sales in the UK.

Podmods are, it is now widely agreed, getting to a position of dominance in the modern vaping market. And at the heart of the opportunity, for retailers, lies the cartridges or pods themselves, says Juul boss John Patterson.

“Within the sector there are starter kits, devices, refills and accessories. Although retailers should stock products across all segments, the main area for convenience retailers is refills. Whereas starter kits and devices will be one-off or infrequent purchases, smokers who have moved away from cigarettes into ENDS will regularly replenish refills and will expect to purchase these in the same stores as they previously purchased their cigarettes.”

Juul data, meanwhile, shows closed pod systems now representing 80 percent of the growth in this market. So take note: These products represent the heart of many store’s vaping opportunity. Are you up to speed?

Product: myblu Liquidpods

The USP: Quick charge time and a hassle-free simple pod system are some of the main attractions of the myblu system. The ‘myblu Intense’ system, meanwhile, utilises nic salts technology.

Need to know: myblu (the lowercase spelling is part of the brand) is one of the most recognisable and widely-distributed pod mod systems. Its Liqiuipods system features a wide range of flavours and blu’s corporate affairs director Duncun Cunningham says the choice of flavours can be a cessation aide: “Market insights have shown that adult smokers need to experience different flavours before moving from tobacco to vaping permanently.” Part of the Imperial Brands group, it is aided by big budget support and expertise.

Flavours: Tobacco, Menthol, Blue Ice, Bourbon Caramel, Caffè Latte, Eucapytus Lemon, Cherry Crush, Gingseng Ginger, Mango Apricot, Tobacco Crème, Coconut Breeze (Intense Liquipod: Tobacco, Menthol, Blueberry, Strawberry Mint)

They say: “myblu delivers an enhanced vaping experience that is as easy-to-use as it is to sell. The device combines a high-performance vaporiser, with just 20 minutes charge time, with hassle-free Liquidpods that allow consumers to switch between flavours in seconds via an easy one-step ‘click and go’ system. Its powerful and convenient design makes myblu an attractive product that appeals to existing vapers looking for a second device, vape/tobacco dualists and smokers looking to switch.” Duncan Cunningham – corporate affairs director, Imperial Tobacco & blu

Product: Logic Compact

The USP: Huge market growth. Compact (and it’s nic salts-containing variant Compact Intense) helped the brand grow by 45.2% year on year.

Need to know: The Logic brand is one of the most well established, representing 11.5% of the UK market in total. The two compact systems sit alongside Logic Pro, Logic LQD and two cig-a-like products. Its tagline – ‘Richest Flavour. Simplest Device’ – stakes a claim for the two most vital elements of a pod mod system, providing an accessible and satisfying entry point for new vapers.

Flavours: Tobacco, Menthol, Cherry, Berry Mint, Berry Crumble, Wild Blueberry, Cantaloupe Melon, Strawberry, Caramel Tobacco (Intense flavours: Amber Tobacco, Peppermint, Chai Latte, Berry Ripple, Banoffee).

They say: “The vaping market is a very crowded space, with more brands than ever offering new and innovative products. Although this makes for an exciting and evolving market, it can make it difficult and confusing for customers when purchasing their vaping device and liquid. What sets us apart from our competitors is that Logic is trusted by vapers – they know the brand and have faith in the quality of products they are using.” Nick Geens – head of Logic and Reduced Risk Products, JTI

Product: JUULpods

The USP: The brand was born in the US where it pioneered the increasingly-popular nic salt e-liquids. As mentioned earlier, this creates a nicotine hit closer to that found in combustible cigarettes.

Need to know: The JUUL system has lagged behind some others for UK distribution but, according to the company, its sales figures, where stocked, still make it one of the biggest podmod systems available in the UK market. Controversy around the brand in the US saw a slew of unfavourable headlines in 2019 but a new US regulatory framework due to come into force this year should see the brand’s image recover stateside.

Flavours: Golden Tobacco, Glacier Mint, Royal Créme, Mango Nectar, Alpine Berry

They say: “Our product has two key attributes: it’s simple and it’s satisfying. You’ve got two pieces: a device and a JUULpod making the proposition simple for both retailers and adult smokers alike. It also delivers on puff consistency providing a more satisfying experience for the user. When you combine these things, it gives Juul a unique position in the market and the reason why Juul has become a top three vape brand in the UK in such a short period of time.” John Patterson – sales director, Juul Labs

Product: Vype ePod

The USP: The product offers an impressive 275 puffs per cartridge and an all-day battery life.

Need to know: The Vype ePod sits alongside other products such as Vype ePen 3 and Vype eTank 2 as part of a portfolio of products. The

Flavours: Golden Tobacco, Chilled Mint, Garden Strawberry, Very Berry, Vanilla Medley.

They say: “The launch of the ePod represents further innovation for Vype as a brand. In contrast to our previous device – the ePen 3 – which is activated by a button, this device is puff-activated and provides a quiet vaping experience. Furthermore, the new magnetic pod replacement mechanism also allows consumers to achieve maximum pleasure and satisfaction with minimum hassle. With its progressive features and design, we expect the new ePod to make a difference in the UK vaping market.” Fredrik Svensson, general manager – British American Tobacco