The astronomical rise of ecigarettes and the ecig business over the past few years has given rise to hundreds of ecig brands, but has the industry finally reached its peak?
There are plenty of folks still purchasing electronic cigarettes, but lately we’ve been hearing and reading of a slowdown in the ecig business as sales numbers seem to have leveled off or even declined.
Part of this is the entry of ecig tanks and eliquid into major retail chains, making it harder to fully track the overall numbers. But with so much going on in the news about ecigarettes and a push by officials to restrict or outright ban them, we have to wonder if that is making an impact and if the ecig business has reached its peak.
This may seem like a shocking question to be asked on a site such as ours, because our support of the ecigarette is full-throttle and with good reason. But part of being in any type of industry in any way is being able to take a step back and look at the bigger picture. So are we in this bubble of ecig fervor at a time when consumers are looking at ecig brands with a more concerning eye? This may be the case in England, where sales growth of ecigs have stalled and lead to speculation of smokers losing their passion for vaping.
A lot of that slowdown can be attributed to smokers not getting enough of what they want. At least that’s the case that Jan Verleur, the head of VMR Products which makes ecig brands such as V2 cigs, makes in an article in the Telegraph that has been following the UK ecig business.
The Ecig Business Is Not Slowing Down It’s Diversifying
VMR Verleur says there is a lack of products that can effectively deliver nicotine, meaning that “As the technology stands, at best you could get 15 to 20 per cent of the customer base to transition over.” It is nicotine delivery that is the key to several FDA approved smoking cessation aids so basically it is a known factor, despite what critics say, it is not nicotine that is bad for you by itself and that nicotine is not what makes smoking dangerous.
Still, it seems from our view that those who aren’t getting what they want out of the mainstream 2-piece ecig are simply moving over to ecig tanks and eliquid. This would be the logical solution if you are a smoker who ultimately values satisfaction over ease of use.
This is also isn’t really the same story in the US like it is in the UK. While sales could be termed as stagnant here, it isn’t at the same level and it has some logical reasons for it too.
Wells Fargo tobacco analyst Bonnie Herzog admits that “ecig year-over-year pricing has been negative for 15 consecutive periods now.” But Herzog also believes that “it’s at least partially due to difficulty in capturing SKUs given the rapidly evolving vapor category and proliferation of vapors/tanks/mods and refills which tend to have a lower retail price/refill.”
What’s It Mean?
What that basically means is that prices set by ecig brands have been consistently lower for over a year, and that has an impact on overall ecig business sales numbers.
The key take away here is that a large part of this overall price drop is the surge in popularity for ecig tanks. People are buying them and refilling with eliquid, which is much cheaper than refill cartridges from the more entry-level 2-piece systems. This is something we have been seeing for quite a while, but Herzog really underlines how that trend has affected overall sales.
So while it may look like a decline in the popularity of ecigarettes to some based on sales numbers, we actually should be looking at this as the evolution of the product and its consumers.
An article in The Guardian recently covered this exact subject and openly questioned if we have reached “peak vape” due to falling sales numbers. This just doesn’t seem to be the right question to be asking.
Certainly if you take a look at the massive growth of electronic cigarette manufacturing plants, vape shops and explosion in vaping options from leading ecig brands you see that the ecig business isn’t slowing down. It’s just evolving, and with that certain sales numbers could fluctuate. The tendency is for people to label something they aren’t sure of and jump to conclusions, so some stagnant sales can lead to wondering if the electronic cigarette has peaked. Well, it hasn’t.
Not only has it not peaked, but we believe we are still on a long upward journey that will deliver to smokers everything they have been looking for. In reality, the ecig business is only just beginning. Vaping works for millions of people and will work for millions more going forward. We are thrilled to be going along for the ride!