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Ecig Sales Up, Despite FDA Regulations Launch

By Tyler McCanus

Tuesday September 27, 2016
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Despite all the concern over the FDA now regulating the electronic cigarette industry, ecig sales are actually up. That may come as a surprise to some people, given the amount of bad press vaping has had to deal with in the past year, but it also could reflect the industry’s ability to overcome such hurdles. Of course, that bad press was generally not justified, but that’s also something that we’ve had to learn how to deal with. It hasn’t been as easy getting the word out about the power of vapor to change lives, but we, and the industry as a whole, remain vigilant.

Apparently that stay-the-course mentality is beginning to pay off. While there was some concern at the beginning of 2016 about the vape revolution stalling, there shouldn’t be any longer. Back then ecig sales were clearly down, and the FDA had still not come down with a final ruling. It was a worrisome time for the electronic cigarette industry, that’s for sure. We’ve also seen our fair share of scares and misrepresented data since then, as the anti-vaping activists ramped up their efforts.

All of that seems to have been a wave that crashed down, but left the ecig industry standing as a stalwart in the face of pressure. The ability to withstand this sort of attack was due to a number of factors, but we can’t ignore the impact of Big Tobacco. In perhaps the most ironic twist in the short but powerful run of the electronic cigarette industry, we actually found Big Tobacco companies like Altria fighting for vaping. It’s still an idea that we are wrapping our head around here, but it surely made an impact. Now, ecig sales are up again.

Things Are Looking Up

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The report of electronic cigarette sales being up is based on Nielsen data, which primarily focuses on convenience store sales and the like. This generally means they aren’t tracking vaporizers and eliquid because those are either sold by online vendors (ECCR link) or in vape shops. Still, the upward movement is a relief after a rough year. The Nielsen data shows ecig sales up a not insignificant 16.6% for the 12-week period that ended September 10th. That’s a double digit move, which is nothing to sneeze about.

Bonnie Herzog, an analyst of the tobacco and vaping industries for Wells Fargo Securities, attributed at least some of this to price increases. She pointed at the bump in price for Vuse and a marketing push for Altria’s MarkTen product. Interestingly, she was also quoted saying “We also believe the industry’s push to innovate ahead of deeming regulations contributed, (while) NJoy’s bankruptcy filing (of Sept. 16) underscoring greater competition.”

What Herzog is suggesting is that the recent bombshell announcement of NJOY going bankrupt could actually signal more growth for the industry, not less. NJOY may have navigated itself to a dead end, but it did so because of the increased competition. Increased competition comes from an increase in demand, and the result is this bump in ecig sales we are seeing.

Further evidence of the move toward vaping comes with the continuing drop of smoking rates. “As we expected, cigarette volumes are starting to decelerate, trending toward historical declines of 3 percent to 4 percent, particularly as the industry laps unusually strong volume trends over the past year,” Herzog pointed out. That’s perhaps another nail in the coffin for traditional tobacco cigarettes, and the vapor industry is there to aid in that transition.

All of this has led to rosier picture than expected, and just in time for the upcoming holiday push in just a couple months. We’re heartened by this data, but we also know there obstacles ahead for the ecig industry. Still, the very idea of vaping and its impact on smokers (and those who love them) remains as strong as ever. Good news for everyone this time, and we’re optimistic we’ll see move of it as we move into the final quarter of 2016.

Happy Vaping!

Tyler,

Team ECCR

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