As we wind down 2013, in what has turned out to be a very important year in the development of the electronic cigarette industry, we’d like to take a look back on the year that was. Some say the past is one of the key predicators of the future. We aren’t sure that we would take it that far with e-cigs, but as this amazing product grows from its infancy stage to adolescence it would be wise to keep close tabs on the events that have shaped the industry thus far. With that we give you ECCR’s biggest e-cig news story of 2013: Lorillard’s acquisition of SKYCIG.
Not one to rest on their laurels, Lorillard Inc., the third largest manufacturer of tobacco in the United States, acquired the United Kingdom based SKYCIGS in October. This move came nearly 18 months after the Greensboro, North Carolina based maker of Newport brand cigarettes gobbled up Blu eCigs as their first entry into the electronic cigarette market.
Tom Rolfe, co-founder of SKYCIG struck a tone similar to the one exhibited by Blu eCigs president Jason Healy when he announced their sale to Lorillard. Rolfe framed the move as an exciting development, stating “we chose to move forward with Lorillard for the exceptional resources and expertise which the company can provide to enable SKYCIG to further both our product innovation and availability.” Read: SkyCigs E-cigs Acquired By Lorillard Tobacco Company
SKYCIG is slated to continue operating independently as a separate brand, meaning all the minds behind the company’s rise to prominence in the UK will remain in place. Clearly Lorillard is betting on its new acquisition to continue its growth in the burgeoning UK e-cig market.
All of this begs the question of how “big tobacco” approaches the challenge that electronic cigarettes pose to their market share. We’ve already seen RJ Reynolds develop and release (in a limited fashion so far) their own e-cigarette, dubbed Vuse and marketing a “new dawn” with its minute long vuse e-cig commercial. To much less fanfare, Philip Morris launched their MarkTen e-cig in Indiana this past summer. Now Lorillard continues to implement their seemingly divergent strategy of purchasing existing technology via known e-cig brands.
What we see in Lorillard that is different than the other two of the “big three” tobacco companies is their foresight into expanding quickly toward the international e-cig market. Just like in the US, we have seen brands popping up left and right in the UK and Europe.
Will there be some “locally grown” brands that rise to the top or will we see an invasion of long-standing American brands making inroads abroad? We’re certain that marketing plans have already been drawn up in an effort to capture the emerging market share across the Atlantic. Will 2014 be the year that these plans are put into action?
Several US-based brands market to the UK already via e-commerce sites that ship globally, while others have opened UK websites to push their existing product through a European advertising paradigm. Some have gone even further, like our top-rated brand Green Smoke, which has been operating a UK website and shipping center in the UK for years. The market’s needs demand some real attention to the millions of potential e-cig users in Europe and, in true capitalistic fashion, we’re in for multi-company race to grab that potential.
This is our biggest e-cig news story of the year not only because of the purchase of SKYCIG itself, although that move was certainly a whammy, but more for the signal it sends throughout the e-cig industry. It may be true that the top e-cigarette companies operate stateside, but as the competition moves to the international stage we are certain to see follow up maneuvers from the biggest players in every country.
Is Lorrilard’s acquisition of SKYCIG the first domino to fall, signaling a flurry of moves to capture existing UK or EU brands? Or are the big e-cig and tobacco companies planning a different strategy for Europe? This will be one of the big questions for 2014 and we’ll be following it closely here at ECCR, as electronic cigarettes take hold in the UK and Europe as a whole.
Until next time, Tyler
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