As vapor becomes more of a pronounced OTP segment, convenience stores are becoming more of a pronounced provider.
By Anne Baye Ericksen, Contributing Editor
For most convenience stores, VTMs, including open-system vaporizers, tanks and e-liquids, function as a supplement to traditional tobacco sales rather than a specialty item meant to draw in a new customer demographic.
Not only are vapor items—vapors/tanks/mods (VTMs)—expected to surpass the $2 billion mark this year, but vapor sales could exceed e-cigarette sales by $500 million. Wells Fargo Securities reports that vape sales now outpace other non-combustible smoking devices three to one.
That’s a significant slice of a category that includes other than tobacco products.
Looking through the smoke at the vape segment, the market has fast evolved into three distinct business forums: one-third of sales come from vape shops; another third from the Internet; and the remaining 33% covers other retailers, such as c-stores, that have added noncombustible electronic nicotine devices (ENDs) to their existing product lines.
Although this portion of vapor sales consists of a conglomeration of different types of retail businesses, it produces substantial revenue—$300 million in 2014, and a projected $400 million this year, per Wells Fargo.
As it is turning out, c-stores are accessible locations for consumers looking for vape products.
“It’s two different types of clientele,” said Jon Fleck, merchandising manager for Cenex Zip Trip, the retail outlet division of CHS Inc., headquartered in Inver Grove Heights, Minn. “People buy vaping products from us because they are paying for the convenience.”
Stay tuned to Convenience Store Decisions’ June tobacco issue, for more on how convenience store retailers are faring with vapor, as well as other tobacco categories.