Altria and NuMark eVapor are going to get your money! Or at least that’s the plan. It may sound ridiculous but when you already make $5 billion dollars per year of pure profit and analysts are telling you that you could pull in another $5 billion by adding ecigarettes to the portfolio, well then why not think big?
When you think about the fast growing successful companies out there that offer great investment potential, you know those types of dream investments where you invest modestly and end up owning a pro sports team, you would naturally think about tech companies, maybe some new innovative energy brands. Those might work out for you. But none of those investments could match the consistent earnings of Altria year to year.
Altria has averaged 20.6 % growth per year for about half a century. S&P Capital IQ analysis shows that if you had bought $100 bucks of Altria stock in 1968, today you would be looking at an account balance of almost $700,000.
In fact, just last year alone Altria increased profits by $500 million. Whatever your feelings may be about Big Tobacco, they know how to make money. Big Tobacco knows full well that vaping is the future and Altria has assigned their NuMark evapor subsidiary the task of gaining market share.
Tagged as “An Altria Innovation Company”, NuMark eVapor certainly has a lot of resources at its disposal.
Altria And NuMark eVapor Set Their Sights On Vapers
At first, Big Tobacco decided to flex some muscle and just wipe out e-cigs before the vaping movement could take root. The problem was that vaping filled a void. vaping worked for so many people and the ecig was successful despite the efforts to crush it.
In 2013, Lorillard CEO Murray Kessler estimated that ecigarettes had driven total tobacco cigarette sales down by at least 600 million cigarettes, or about 1 percent, during the first quarter of 2013 alone.
That estimation was based completely on retail electronic cigarette sales and did not account for the dent in cigarette sales being made by online sales of ecigarettes.
The best ecigs are sold online and it is difficult to track the total numbers. It is safe to say that online ecig sales had driven cigarette sales down far more than retail ecig sales. This trend continues as there are now an estimated 4 million Americans who now vape instead of smoke. That means that vaping has led to in the range of 40 billion less cigarettes sold every year. Needless to say the writing was on the wall, vaping is clearly replacing smoking for millions of people.
Big Tobacco decided to get in the game. Altria established a subsidiary called NuMark evapor. Altria was actually the last Big Tobacco company to get into the game but they wasted no time making a big splash. NuMark eVapor announced plans to develop the Mark Ten and then bought established e-cigarette brand, GreenSmoke. NuMark eVapor has since followed through with the launch of the Mark Ten evapor device.
NuMark eVapor has stated that its long-term goals include continued exploration of smoking alternatives. The NuMark eVapor website cites the fact that 25 million or more smokers in the US are looking for an alternative to smoking cigarettes. NuMark eVapor has their eye on reaching as many of those 25 million people as possible. At the same time, NuMark eVapor has stated its intentions to expand their ability to influence regulatory and government affairs. What that means for any future FDA ecig regulation remains to be seen.
NuMark’s Mark Ten eCigarette
The NuMark eVapor Mark Ten eCigarette was the new brand that first hit the shelves well over a year ago now. The MarkTen was tested in Indiana and Arizona prior to the national release of mid-2014.
The Mark Ten is a tobacco executive’s vision of an ecig. The packaging was small, and so is the evapor device itself!
The MarkTen is a small ecig without much punch. With only two flavors and one nicotine level, it basically treats all smokers the same but as vapers well know the idea of a one size fits all ecig is ludicrous.
The Mark Ten’s size and limited option means that it takes up very little retail space and retail is what NuMark eVapor knows. Indeed with the distribution and the ability to put the MarkTen in retail locations where consumers were already buying ecigarettes, the little ecig actually sold well. It offers big margins for NuMark and retailers alike.
After NuMark eVapor developed plans for the MarkTen, the next evapor maneuver was to buy the very successful ecig company, Green Smoke for $110 million in February of 2014.
Ecigarettes are nothing at all like tobacco cigarettes, in spite of the connections that anti-vaping groups try so hard to make. Green Smoke is an experienced electronic cigarette company that understands vaping and to this day makes probably the best quality cigalike ecigs on the market.
Mark Ten ecigs cannot compare to the quality, options and performance of Green Smoke ecigs, Altria knew it.
By bringing is a group with experience and knowledge in ecigarettes Altria has no doubt gained a better understanding of ecigs. The influence of experienced and innovative GreenSmoke executives will only help Altria design better evapor products that meet the expectations of vapers. Look for the impending release of an expanded MarkTen line with more options and a larger design that will last longer, give more vapor and more puffs.
Despite the acquisition by NuMark, Green Smoke remains largely reliant on online sales. There is obvious potential for Green Smoke to access Altria’s distribution network and that could still happen but Green Smoke offers such a wide range of products, flavors and nicotine levels that it would require a lot of shelf space to offer even a snippet of its ecig products.
It just goes to show that you get the most options and the best products when you buy ecigs online. When you buy retail you are limited to ecig brands with the biggest profit margins that take up the smallest amount of shelf space and offer the least selection. NuMark eVapor’s retail strategy for their Mark Ten electronic cigarettes will always lag in terms of quality because of the limitations of retail.
What NuMark eVapor may lack in offering a range of quality evapor options, they hope to make up for with the sheer volume that Altria’s distribution offers them. If the redesigned Mark Ten provides more vapor, more options and better quality, that volume could easily translate into billions.
NuMark eVapor and Verve Discs
NuMark eVapor has more than e-cigarettes in its portfolio. As part of the effort to serve adult tobacco consumers with alternative products the company has released Verve Discs.
Verve Discs are a flavored, chewable candy-like product that contain 1.5 mg of nicotine. Verve discs are triangular shaped and sold in tubes. Each tube contains 16 discs. There are four different flavors.
Each disc lasts for about 15 minutes. There have been no studies to determine if Verve Discs help mitigate the urge to smoke.
NuMark is currently testing sales of Verve Discs in Virginia. Verve is sold the same way cigarettes are, you have to ask the clerk for a pack. Verve is an adult product and should not be sold to children.
The plastic tubes that Verve Discs come in are equipped with child resistant packaging.
The future of Verve Discs is unclear. It depends on how the product tests in the Virginia market. It is not surprising that NuMark eVapor would branch into other tobacco alternatives. RJ Reynolds has done the same thing with the release of Zonnic nicotine gum. Ultimately, the main focus of NuMark will ultimately be the evapor industry.
NuMark eVapor will undoubtedly play a role in the future of vaping. By virtue of their resources and influence alone, we know that they will certainly survive any FDA ecig regulations. You can count on seeing NuMark ecigs on retail store shelves for many years to come.