Evolving market

The smoking cessation products market is expected to witness impressive 12% y-o-y volume growth in 2018 over 2017.

Ongoing anti-tobacco movements and increasing sales of electronic cigarettes (e-cigarettes) as a smoking cessation product are key drivers for the market, according to a study by Fact.MR.

The smoking cessation products market study investigated the key influential factors causing a rise in the willingness of smokers to quit smoking.
The tobacco epidemic is responsible for over 7 million deaths per year worldwide.

Tobacco smoking is the primary cause of a life-threatening disease – Chronic Obstructive Pulmonary Disease (COPD) and it is likely to become the third leading cause of death by 2030.

Stringent laws against tobacco smoking in public places are aiding movements against tobacco smoking.

A significant rise in tobacco taxes in most countries is exhorting consumers to quit smoking.

A majority of consumers are turning to smoking cessation products to mitigate the withdrawal symptoms and increase the chance of quitting smoking, which is ultimately boosting growth of the smoking cessation products market.

Despite the ongoing controversies about the benefits and hazards of e-cigarettes, most consumers are preferring to adopt e-cigarettes as a smoking cessation product. The recent rise in sales of e-cigarettes is mainly attributed to the rise in its demand among young-adult smokers.

The Centers for Disease Control and Prevention (CDC) released the ‘2016 National Youth Tobacco Survey (NYTS)’, which finds that e-cigarettes are the most popular smoking cessation product among high school students in the U.S.

The 2018 NYTS revealed that use of e-cigarettes among high school students increased by whopping 78% during 2011-2018.

The adolescent population is resorting to e-cigarettes as a smoking cessation product over its other types, and its reasons may be traced back to the USB flash drive-like shape and the availability of interesting flavors of e-cigarettes.

The persistent popularity of e-cigarettes is making a significant impact on imperative business strategies of smoking cessation products market players. Manufacturers in the smoking cessation products market, such as British American Tobacco plc and Imperial Brands PLC, are planning to boost investments in their e-cigarette facilities to envisage incremental growth in smoking cessation products market in coming years.

However, the US Food and Drug Administration (FDA) recently imposed a ban on the flavors used in e-cigarettes. In order to reduce the potential impacts of stringent regulations on manufacturing and marketing of e-cigarettes, leading players are adopting strategies to work closely with governmental organizations in the upcoming years.

Though smoking cessation products are ubiquitous across the globe, the regional markets for smoking cessation products in North America and Europe are the most lucrative markets for stakeholders, according to the Fact.MR study.

The study finds that manufacturers in smoking cessation products markets in the U.S. and Europe fathom that tobacco smoking has reached epidemic proportions in these regions, which is reflected in the recent developments in their vital strategies.

Growing demand for smoking cessation products in North America and Europe can be underpinned by the alarming rise in adoption of tobacco products, especially across a young-adult demographic in these regions.

According to a survey on Adult Smoking Habits in the UK: 2017, people aged 25 to 34 years had the largest proportion of current smokers in the UK. In the U.S., over 38 million adults smoked cigarettes in 2016 and the largest increase in quitting was among a young-adult demographic in the country, according to the CDC.

To capitalize on the increased willingness of the millennial population in developed countries in North America and Europe, leading manufacturers in the smoking cessation products market are likely to concentrate most of their efforts into these regions in the foreseeable future.

The Fact.MR report assesses the smoking cessation products market growth for the period 2018-2028 to find that it is envisaged to grow at a 10.8% volume CAGR through 2028.

Despite only being around a decade old, the UK vaping market continues to develop and evolve at pace from both a commercial and technical perspective.
The category is estimated to be worth £728m, with sales channels spanning online and vape stores in addition to traditional retail outlets. While it may be difficult to ascertain the true scale of this fast-growing category, what is clear is that the opportunity it presents for retailers is huge.

There are 3m vapers in the UK, a figure that is expected to continue to rise; which is no surprise when you consider the significant lifestyle and cost benefits compared to traditional tobacco. However, currently only a minority of vape sales stem from traditional retail outlets, suggesting a real growth opportunity for convenience store owners prepared to upskill and invest in the category.

The continuous evolution of vaping technology, allied to changing consumer trends, makes this an incredibly fast-moving and exciting category.
Duncan Cunningham, Head of Corporate and Legal Affairs at Blu, comments: “blu is constantly looking at ways to strengthen its innovation – driven by consumer insights – to further enhance its broad product portfolio and ensure it continues to meet the changing needs of established vapers, as well as smokers looking to switch to something better.”

Perhaps somewhat surprisingly, 40% of UK smokers still haven’t even tried vaping (Public Health England).

“We believe it’s our responsibility to continue to develop products that will encourage these individuals to switch, whether through great new flavours, breakthroughs in nicotine delivery like Nicsalts or vape devices utilising current wider tech trends like smartphone connectivity,” adds Cunningham. “The vape category will only continue to grow, potentially presenting one of the biggest retail opportunities in recent years.”

Vaping continues to gain traction in the UK via a growing body of research in favour of e-vapour (EVP) products.

Regulators and public health bodies are increasingly concluding the category presents less of a risk to public health than cigarettes, and that vaping has an important role to play in helping smokers switch to something better.

This includes, most recently, calls from MPs in the Science and Technology Committee for the Government to relax its vaping laws and regulations, which they argued were hampering the sector – as well as highlighting that a ban on vaping in public spaces would be counterproductive for those attempting to quit – with the ambition of helping more people to switch.

“blu supports this recommendation and believes the more widespread, positive word of mouth around vaping, the better,” says Cunningham.
Ultimately, positive regulation that’s based on rigorous, peer-reviewed research will ensure consumers have access to high quality products and information they can trust, helping them in their journey to transition from smoking to vaping.

As with other categories, sales of vape products can spike at certain times of year, especially those typically associated with consumer health drives such as January. Key social occasions like Christmas should also be considered.

As consumer interest in vaping continues to grow, retailers are likely to see vape product sales opportunities emerge linked to other key occasions such as the NHS-led Stoptober initiative, as well as VApril.

“While it’s important for retailers to maintain stock levels throughout the year, we would recommend taking extra care – and driving extra consumer attention towards their vape offerings – at these peak times of year to avoid missing out on sales,” adds Cunningham.

As with the range of devices stocked, retailers should take care to offer a flavour portfolio that satisfies their customers’ needs.

While some consumers may be looking for a tobacco flavour to mimic the flavour of traditional cigarettes, research shows that fruit-based flavours are increasingly preferred.

In fact, three of the five top-selling blu e-liquid flavours are fruit-based: No.1 menthol, No.2 blueberry, No.3 tobacco, No.4 strawberry mint and No.5 cherry (Nielsen).

“We would always recommend stocking a wide range of flavours at different nicotine strengths that are suitable for a variety of devices, including both e-liquids and Liquidpods,” comments Cunningham. “Ranges should comprise of fresh flavours like our Polar Mint, fruity flavours like Tropic Tonic, savoury flavours like Vanilla Crème and of course, classic Tobacco flavour.”

blu has already made some significant strides with its e-liquid range following its acquisition last year of Nerudia, an independent company dedicated to innovation and R&D in the vaping category, and has further plans in the pipeline to drive new innovation in the category both in 2019 and beyond to ensure blu remains at the cutting edge of e-vapour.

This includes the launch of its improved Tobacco flavour, offering consumers a more caramel-ly, nuttier flavour profile. Keep an eye out for an ‘enhanced flavour’ flash on blu tobacco e-liquid packaging.

With a dizzying number of different devices and liquids now available on the market, many consumers seeking to enter the category are unsurprisingly intimidated by the sheer breadth of the vape offering.

“These consumers need knowledgeable advice from retailers on what to buy along with reassurances on product quality and the benefits of switching,” says Cunningham. “By taking the time to expand their understanding of the category, retailers can effectively advise these customers and grow their sales as a result.”

blu has produced several retailer category guides to help retailers get to grips with the category.

The latest edition covers everything retailers might need to know, including the different terms and category buzzwords, detailed explanations on the wealth of devices available, information on key trends and even merchandising tips. To request your copy, or for more information or advice, speak to your blu rep or email [email protected].

“As well as store owners themselves, it’s vital that staff also understand not only what products they are selling but also the customers who they are selling to,” adds Cunningham. “Training is key to success in this regard and by making the time investment to educate all staff on the category, including the benefits of switching, retailers and their staff will be able to provide an exceptional level of service to customers that will encourage them to return again and again.”

The new myblu pod mod device has grown extensively in distribution and availability since its launch just a few months ago; it can now be found in a wide range of convenience stores across the UK.

“We’ve already had some great success in getting this new tech into the hands of smokers and vapers and have great expectations for the range in 2019 and beyond,” observes Cunningham. “myblu delivers an enhanced vaping experience that is simple, powerful and convenient, making it an attractive product that appeals to existing vapers looking for a second device, vape/tobacco dualists and smokers looking to switch.”

The device combines a high-performance vaporiser with hassle-free Liquidpods that allow consumers to switch between flavours in seconds via a simple one-step ‘click and go’ system. myblu offers more power and a broader range of flavours (including nicsalt variants) than many other pod mod products in the market at a great value price point.

If we look to the US – the biggest vaping market – pod systems are a key growth category, highlighting further opportunities for growth here in the UK.
Blu has some big plans in the pipeline for continued innovations and improvements to enhance the myblu range, as well as the wider blu portfolio, and grow its appeal even further.

myblu is the first widely-available pod mod device to feature Nicotine Salts (nicsalts), devised by smokers for smokers.

Nicsalts more closely resemble the way that nicotine is found in the tobacco leaf in its natural state. Vaping a myblu Intense Liquidpod results in nicotine being absorbed into the body faster than normal e-liquids.

This rapid absorption of nicotine through nicsalts allows myblu Intense to more closely replicate the experience of smoking a traditional cigarette.
As a result, the range will particularly appeal for adult smokers looking to switch for the first time, or those who have tried vaping in the past and haven’t been completely convinced.

Allied to the broad range of flavours available in the Intense range, myblu offers an enhanced smoker experience – making it a must-stock range for independent retailers.

Growing market

Nick Geens, Head of Reduced Risk Products at JTI, comments: “The UK is the second largest e-cigarette market with over 3.2 million adult vapers, and with the market expected to grow, the category presents an exciting opportunity for independent and convenience retailers. We are continually updating and releasing products to ensure we meet the needs of the ever-growing number of vaping consumers in the UK, and hope that we can help retailers maximise sales in this expanding category by responding with innovative NPD.”

Within the vaping category, capsule and refillable products are currently the fastest growing devices, and are now used by most adult UK vapers.
The Logic range holds a 12.4% share of the UK independent and symbol vaping market and 10.9% share of the overall UK vaping market in traditional retail (Nielsen).

Retailers can tap into the growing refillable market by stocking Logic LQD, which recently updated its e-liquid bottles with a new design and competitive RRP of £3.99. Retailers can also sell the revamped LQD bottles as part of JTI’s 3-for-£10 promotion.

Lower strength e-liquids now account for over 29% of the segment (Nielsen), so the extension of JTI’s successful Logic LQD e-liquids earlier this year with the launch of a lower strength (6mg) variant offers retailers a significant profit opportunity.

Retailers can also take advantage of the increasingly popular capsule market with Logic PRO, the No.1 capsule vaping brand in the UK (Nielsen).
According to the latest insight, the three most popular vaping flavours are fruit (30%) followed by menthol (22%) and then tobacco (19%) according to KTNS – all of which are included in the Logic LQD and PRO flavour ranges.

Nick Geens adds: “With the vaping category expected to continue growing, we remain focussed on working closely with retailers to support and grow their businesses alongside ours, for the long-term. Our passionate team of “Logic Champions” are also dedicated to sharing their knowledge and advice with retailers to make sure they are as prepared as possible to compete with multiples in vaping sales.”

Logic LQD enables retailers to maximise sales from the biggest segment within the category (Nielsen).

JTI has launched a new Logic LQD bottle with a lower price point of £3.99. With the growing popularity of refillable and e-liquid products, this launch extends the opportunity for retailers to maximise sales in the vaping category.

Retailers can also sell the revamped LQD bottles as part of JTI’s 3-for-£10 promotion.

In September, Logic announced an update to its popular Logic PRO capsule vaping device, the next generation Logic PRO 2. Featuring a new soft touch finish, lighter weight and improved charging time, the Logic PRO 2 is lighter and smaller than its predecessor.
Offering a matte black, soft-touch finish for a more comfortable vaping experience, the latest device also includes a 650 mAh battery that can fully charge in 70 minutes and lasts 24 hours.

Nick Geens concludes: “The Logic portfolio has enjoyed increased success since the launch early 2016 and now enjoys a 12.4% share of the UK independent and symbol vaping market and a 10.9% share of the overall UK vaping market in traditional retail.”

JTI is support its popular Logic Pro range with the launch of a new UK-wide competition for retailers.

The ‘Looking for Logic’ competition will run on JTI’s trade website JTIAdvance.co.uk where retailers will be invited to find images of the full Logic Pro range hidden within various Christmas scenes.

Running until 20 January, with a new scene released every fortnight, retailers have the chance to win a bumper set of prizes including a Robot Vacuum Cleaner, iPad, £200 holiday vouchers and an HD security camera.

JTI Advance is a tool for retailers to support and develop their tobacco and vaping business.

Available on mobile, tablet and desktop to suit the busy schedules of retailers, it offers key business tools including training guides, videos and downloadable PDFs. The free online resource also provides users with key category insights, news on product developments and up-to-date industry and legislative information.

Innovative sector

Brett Horth, CEO of Vapouriz, comments: “The vaping sector is a dynamic industry with change and innovation happening all the time. Vapouriz is a very agile company, able to respond to customer and consumer needs; providing products, flavours and innovation to satisfy market demands.”

The sector has seen great growth and with POR in excess of 50% on most products, it provides an ongoing, stable opportunity for convenience stores.

“What we would say is that with this growth has come some less than great products,” adds Horth. “So, we would recommend that to give your customers a flavorsome and safe vape, we would always encourage retailers to stock quality products – both hardware and liquids – from a reputable company.”

Vapouriz’ fully owned state of the art production centre, with the latest high-quality technology, is based at the company’s Surrey HQ and means the firm can oversee all stages of the production process.

The company has the capability to manufacture over 40 million bottles of e-liquid a year, all of which must adhere to strict quality control standards and the legal regulations of TPD and CLP.

Customers can be assured that Vapouriz is producing the highest quality e-liquids from only high-quality ingredients that we either produce or source locally from a list of highly vetted suppliers.

The Vapouriz portfolio of brands provide e-liquids for all vapers and in over 200 flavours from traditional tobaccos and menthol to the exciting deserts of the Ohm Baked Range.

They are all created and developed by an in-house flavour development team, who keep an eye on all the latest food and flavour trends.

Many vapers have multiple devices for different occasions and are looking for great flavour and quality that they can use across their device portfolio.

“In response to this trend we have created an easy to sell, easy to use, high quality brand: Vapouriz 50|50,” adds Horth.

Made from equal ratios of PG and VG liquid allows it to be used in classic vape machines delivering a full flavoursome vape, as well as great cloud formation in sub ohm devices.

“This makes it a perfect solutions option for any vaper who comes into the store, and an easy product to sell for anyone behind the counter,” says Horth.

“We recognise that not every retailer fully understands the nuances of vaping products, and 50|50 is easy and simple to understand and sell.”

Vapouriz 50|50 is available in a wide range of high quality flavours.

“The benefit of a local store is without doubt the personal service,” comments Horth. “Being able to offer to their customers exactly what they need – tailoring their e-liquid range of strengths and flavours to satisfy the consumer demand of their customers.”

Upskilling themselves in what products are on offer for vapers will complement the liquid range.

Vapouriz offers training and education support to its customers.

“To work well in convenience a product needs to be easy to sell and drive repeat purchase for the business,” adds Horth. “Our new Vapouriz 50|50, does exactly that.”

The product is so called because it is made from equal parts of PG and VG. PG allows for full flavour and can be used in classic vape machines, while VG produces the great cloud formation of the sub ohm devices.

This 50|50 combination allows it to be used in any vaping device: both classic and sub ohm; and with varying nicotine strengths (from 3mg – 18 mg)and flavours one would expect including traditional tobacco flavours right through to the fruity notes of Raspberry & Apple.

“Our main advice would be to stock a wide range of quality liquids – in a variety of nicotine strengths and flavours,” Horth comments. “To build on seasonal opportunities. Giving up smoking remains the number one new year’s resolution, so making sure you are stocked up on quit kits and liquids for the new January vaper.”

Vapouriz has found that those switching to vaping start on a reasonably high nicotine content and a tobacco or menthol liquid, such as Original Tobacco and Double Menthol before reducing their nicotine strength and exploring the wide range of different flavours available.

“Make sure the products that you are offer are good quality, from a reputable company like Vapouriz,” suggests Horth.

The company’s high-tech production centre means it can oversee all stages of the production process. Customers can be assured that Vapouriz is producing the highest quality e-liquids from only high-quality ingredients that it either produces or sources locally from a list of highly vetted suppliers.

“Definitely make friends with your local field sales rep, not only are they experts across the range and the industry but are happy to visit and demonstrate how all our products work,” Horth adds. “You can also pick up all the Vapouriz brands and kits from your existing distribution partners.”

The new year will see the introduction of the final flavours in the 50|50 range, which brings the total flavours available up to 50. This gives retailers the opportunity to hone down their offer, tailoring it to their individual customer needs.

Vapouriz has recently introduced Double Drip Nic Salts. Nic salts are growing in popularity and accelerating growth in the vaping category and offer retailers another opportunity to capitalise on this dynamic market. With a recommended retail price of £4.99, retailers can make a POR in excess of 56% per unit. Available to pre-order now in seven flavours.

Nicotine salts are designed to mimic the strength and sensation of the nicotine found in a traditional tobacco cigarette.
The primary function of organic salt acids in nicotine salts are to help them vaporise at lower temperatures, lower the pH levels and improved the nicotine absorption.

This combination offers an intense, but smooth, nicotine hit, combined with the flavour and quality of the Double Drip brand.
Easy to sell, nic salts can be used in any classic vaping kit with a high resistance coil. Double Drip Nic Salts are formulated with a 50|50 PG|VG base so can also be used in selected sub ohm devices, offering a solution to any vaping customer.

World No.1

Following its acquisition of Reynolds American Inc. in 2017, BAT is now the world’s leading vapour company. Vype, the company’s flagship vapour brand, is now present in most major vaping markets including the UK.

BAT also owns leading brands in the UK (Ten Motives) and Poland (Chic).

The company further enhanced its vapour products portfolio in 2017 with the acquisition of the ViP brand.

BAT launched its first Vype product in 2013 and today our range provides a choice of closed and open systems to meet vapers’ varied preferences.