Flavored e-liquids once were the key marketing focus for the electronic nicotine delivery systems (ENDS) marketplace.
Now that marketing banner is being stretched tighter by federal and local regulators.
For example, New York City Council is considering a ban on vaping flavors, and at presstime a key committee had recently held a public hearing to discuss the proposed ordinance, providing vaping stakeholders the opportunity to speak at a public hearing.
Last fall, the U.S. Food and Drug Administration (FDA) called on e-cigarette and vaping manufacturers to submit plans on how they will work toward reducing such use or face possible removal from store shelves.
Then last November, the FDA announced a proposed rule change to restrict the sale of flavored e-liquids or nicotine salts to 21-plus-only retailers, meaning convenience stores would no longer be able to carry the products—details of the regulation change are expected to be released in early spring. This is on top of bans already enacted in some cities and new proposals on the state and local levels.
“Proposed legislation is everywhere, including a New York City ban being considered by the city council and a statewide ban proposed by Governor Cuomo,” said Jim Calvin, president of the New York Association of Convenience Stores. “With all the pending regulatory activity, and manufacturers adjusting their marketing strategies in response to FDA threats, it’s going to be a volatile year for the vaping products category in New York c-stores.
Total convenience store sales of electronic smoking devices rose 163% to $2.8 billion in the 52 weeks ending Dec. 30, 2018, according to IRI, a Chicago-based research firm.
MATTER OF CHOICE
Cessation proponents in New York have stated that a ban on sales at convenience stores eliminates choices in the locations cigarette smokers are most likely to encounter them, which means fewer impulse purchases that may lead to long-term switching from cigarettes.
How Altria Group’s minority stake in Juul might lessen this aspect is yet to be determined. But as part of the agreement, the manufacturer will add Juul coupons to its cigarette packaging as well as share its prime shelf space in stores.
“Altria will put pressure on other competing brands just like it does with cigarettes, moist smokeless tobacco and cigars,” said Rick Staley, merchandising manager for Tri Star Energy LLC. The Nashville, Tenn.-based, company operates Twice Daily and t Fuel stores.
E-liquids have become a target for taxes, too. According to the National Association of Tobacco Outlets (NATO), several states have introduced new taxes, including Hawaii. Bills in both the state House and Senate would add a 70% tax on the wholesale price of e-cigarettes and e-liquids. Currently, only California, Pennsylvania and Minnesota tax the wholesale value.
There’s good news for the category, too. At the NACS Show last October, E-Alternative Solutions, maker of Cue vaping pods, introduced Leap, a closed vaping system using nicotine-salts-based e-liquids that will be available in three nicotine levels, including at 0%.
Fontem/Imperial Tobacco’s myblu Intense Nicotine Salt e-liquid pods is rolling out two new flavors, Mint-Station Liquidpods and Tobacco Liquidpods.