Vuse currently leading e-cigarette category when it comes to c-store dollar share.
E-cigarette c-store dollar sales sequentially accelerated to 42.4% in the period ending Oct. 25, driven by 75% unit growth, partially offset by a decline of 19% in net pricing, according to Wells Fargo Securities LLC.
Reynolds American Inc. (RAI) has further solidified itself as the No. 1 e-cigarette (Vuse) in convenience store dollar share position, while Lorillard (LO)—with blu e-cigs—remains in the No. 2 position followed by Logic and Altria (MO) with MarkTen e-cigarettes.
“Though pricing trends have been negative for 11 consecutive periods, we believe it is at least partially due to difficulty in capturing/measuring the different SKUs given the rapidly evolving vapor category and proliferation of vapors/tanks/ mods (VTM) and e-cig/VTM refills, which tend to have a lower retail price/refill,” noted Bonnie Herzog, managing director of beverages, tobacco and convenience store research for Wells Fargo. “We are encouraged that category dollar sales growth has continued to accelerate, driven by RAI’s and MO’s national rollouts and we believe the trial and awareness generated by Vuse and MarkTen should help elevate the entire vapor category and drive incremental trial.”
LO retained the No. 2 dollar share position at 20.7% share while Logic was No. 3 with 15.5%, MO at 9.4%, and NJOY at 5.2%.
Interestingly, according to IRI, NJOY is No. 1 in the vaping category nationally across all tracked channels (which includes both e-liquid and vaping accessories), Wells Fargo reported. But when looking at unit share, RAI is No. 1 with 44.8%, followed by Logic (15.3%), LO (13.9%), and MO (10.5%).
“We continue to be somewhat skeptical of RAI’s No. 1 unit share of 44.8% given Vuse is in 35,000 outlets compared to more than 100,000 for blu, though we note Vuse’s equal pricing ($4.44) was 11% below the category average ($4.99) which likely explains the fast growth,” Herzog said.
LO, meanwhile, continues to lead the take-home channel with 38.4% dollar share. Other leading firms in XAOC were Mistic (20.4% share), ECIG (12.4%), and NJOY (6.5%), according to Wells Fargo.
While Wells Fargo remains “bullish on vapor long term,” Herzog noted that short-term e-cigarette profitability could be soft as volume moves to VTMs. “We continue to believe vapor consumption could surpass combustible cigs in the next decade,” she said.