Millions of Americans have spent decades relying on Altria, RJ Reynolds, and Lorillard to get them what they need to get through the day. This incredible reliance on traditional tobacco cigarettes has brought an absolute fortune of profits to these tobacco giants, all on the backs of smokers.
The advent of the electronic cigarette has the potential to change the game completely, finally giving smokers the alternative choice they have been looking for. But with e cig brands such as Blu e cig, MarkTen, and Vuse, Big Tobacco is trying to make sure we aren’t butting them out of the picture in this transition.
There’s no denying that a lot of us have a negative view of Big Tobacco. How could we not? These are the people that blatantly lied to Americans for years about the level of danger their products posed. Which is basically a nice way to say that the folks at Altria, RJ Reynolds, and Lorillard have made, and are still making, their money by killing people. It is only because the decline in smoking and huge interest in ecigarettes that they have gotten behind their own e cig brands.
Therein lies the problem, however. So many smokers have longed for the day that they wouldn’t be helping fill the coffers of Big Tobacco, but now if they buy a Blu e cig, or one from MarkTen or Vuse for that matter, they still are.
Big Tobacco Knows How To Make Money
As Vivien Azer, an analyst at Cowen, explains, “With each of the three tobacco companies entering the category, they’re positioned to capitalize on it.” It isn’t that we expected Big Tobacco to go down without a fight, but it is still surprising to see their continued growth despite the obstacles.
Altria, RJ Reynolds, and Lorillard all lose customers every year. They lose them mostly to death, but also to consumers who find alternative options, like electronic cigarettes. Yet they still manage to grow their profits due to increased pricing and other measures.
Altria once again beat expectations to bring in $4.27 billion in revenue for the first quarter of 2015. The difference this time, however, is that the tobacco giant warned investors that they need to be cautious about their expected gains for the future.
This change is because Altria sees the writing on the wall as much as everyone else does.
A spokesman of theirs, Bill Phelps, said plainly “Part of our focus is meeting and exceeding adult tobacco users expectations with our products.” Those expectations are changing, and so must Big Tobacco. “Our research shows that about half of those who smoke are interested in alternatives to cigarettes. We offer a variety of products that will evolve as those preferences evolve,” says Phelps.
In that line of products are e cig brands MarkTen and the purchase of Green Smoke. All of this is an effort to stem the flow of customers who are leaving. They may be able to make up these lost funds from disappearing customers by raising prices on the remaining customers for now, but that can’t last forever.
What we need to understand is that this is perhaps a historic opportunity to oust Big Tobacco from the picture, or at least hasten its descent. You can be sure that RJ Reynolds and Lorillard are feeling the heat too, which is why they are investing in e cig brands Vuse and Blu e cig. But these products don’t offer enough for most smokers looking to make the switch, and they certainly aren’t the best technology on the market. Yet they are gobbling up market share in retailer stores, where customers often can’t distinguish between the various products and brands.
We wish those consumers could come here first and understand what would work best for them. Besides the fact that they will find an answer to all their questions and probably better tools for where they aim to go, they will understand that other companies are doing it better right now.
They will also understand that the villain they have been fighting for all these years has a real dilemma at hand, and they have the power to deliver the dell knell and oust Big Tobacco from their lives forever.
Lets hope word gets out to the public before we empower Big Tobacco once again to be a part of our lives for years to come, and rely on them to create a product with the customer in mind. Unfortunately, this has never been the case before, so we shouldn’t expect them to start now. In some circles people wonder if ecigarettes can save the tobacco industry, in our circle we hope ecigs can defeat them entirely.