They are just getting into the game, one already loaded with ecigarette brands, but a lot has been expected out of Vuse and MarkTen. Both are owned by big tobacco companies, RJ Reynolds and Altria, respectively, and thus they are both privy to huge marketing budgets. But as the market starts shaping up with more options for customers in the way of e cig tanks and e-liquid, it is starting to feel like both Vuse and MarkTen are already falling behind.
They may have both just experienced national rollouts this year, but the excitement that must have been building over the launch of their in-house ecigarettes has to be tempered right now.
The numbers are showing us time and time again that more people are opting for so called “open systems” and vaporizers. They may not be the most ideal ecig for everyone’s needs, but a lot more people are willing to take that chance and jump straight into e cig tanks that are manually refillable with e-liquid.
One person who sees this bright as day because it is her job to track it is Wells Fargo analyst Bonnie Herzog. “Vapor category momentum is moderating in c-stores,” she says while her contacts estimate a 7% growth rate for the third quarter of 2014. That is lower than the 12% in Q2 and 25% in Q3 2013).
She went on to note, “Retailers are excited about new vape products, with the e-cig-VTM mix expected to be (approximately) 53/47 in six months, versus (approximately) 67/33 today.” What that means in plain English is that she expects e cig tanks and e-liquid to be almost half of the new products on the shelves within 6 months. That has to giveVuse and MarkTen some reason for concern, don’t you think?
Progressive independent ecigarette companies like Apollo eCig have had to rely completely on quality and understanding demand. They do not have access to massive distribution and retail placement like the Big Tobacco ecigs. Apollo is American small business succeeding in an ultra competitive space and they have done so by listening to consumers and the outcome of that has been to focus on developing the best ecig tank system possible.
Ecig Tanks Expected To Be 50% Of Evapor By Mid 2015
Up until now the two brands are doing more of giving their product away, which makes it hard to discern if this is the best e cig consumers are choosing or just a free trial for them. Herzog explained “Overall, our contacts noted robust trial for Vuse and MarkTen, though this is not surprisingly being driven by ‘free’ product coupons and other promotional activity.”
The way that we can judge a true influence by either of the ecigarette brands is by seeing if people actually come back for more.
While some retailers did see more awareness of Vuse and it taking a great market share, others just aren’t sure yet. “Unable to tell so far due to the number of ‘free’ product coupons we are getting,” is how one retailer described Vuse. “They jumped to a 30% share the second week we carried them but the (number) of coupon redemptions is off the charts.”
While we wait to see if Vuse customers do come back and actually pay for the product put out by RJ Reynolds, there is even less enthusiasm behind the brand Altria has put forth. Herzog admits “MarkTen has garnered mixed initial response despite its higher margin for retailers.” This seems to match what retailers are saying, with one commenting, “MarkTen was heavily promoted when introduced in June 2014 and has since slowed down.” “Though it’s still a strong brand for us it’s behind Vuse and Blu over the past two months” said the same disappointed retailer.
The picture is far from being in complete focus andecigarette brands surely have some tricks up their sleeves, but nonetheless all of this has to be worrying for Vuse and MarkTen.
They spent a lot of time and money developing their own product lines based on what was most popular at the time – 2-piece systems. Now here they are rolling out their pride and joy at a time when more people are looking toe cig tanks and other open systems. Do they still believe in the path they chose or are they going to be developing something new to compete?