While the vape segment still faces a vexing regulatory environment, sales are delivering for c-stores.
By September 2021, the Food and Drug Administration (FDA) claimed to have received 8.9 million pre-market tobacco applications (PMTAs), mostly for e-cigarettes, vape products and e-liquids. Although the agency has decided on 96% of the submissions, an estimated 329,000 remain under review with decisions expected later this year, including a reassessment of JUUL products after initially denying the one-time category leader future retail sales.
While this was all unfolding, Vuse, by R.J. Reynolds Vapor Co., moved into the top position and remains there today. According to NielsenIQ data, as reported by Goldman Sachs, the brand accounted for 36.6% of market share for the 52 weeks ending Jan. 28, 2023. Then came the news in late January that the FDA issued marketing denial orders for Vuse Vibe Tank Menthol 3.0% and Vuse Ciro Cartridge Menthol 1.5%. The action meant c-stores had to immediately pull those specific items from shelves. It also verified the FDA’s declared intent to ban menthol tobacco/nicotine items.
Despite all the happenings on the regulatory front, electronic smoking devices produced an acceptable performance in 2022. IRI, a Chicago-based market research firm, lists dollar sales for the 52-week period ending Jan. 1, 2023, at 9.3%, although price per unit increased by 14%.
Mixing Up The Backbar
It’s developments like these that have category managers contemplating planogram revisions. With vape sales at Twice Daily and Sudden Service c-stores finishing the year with double-digit gains, Tri Star Energy’s Merchandising Manager Rick Staley is mixing up the backbar.
“I am expanding on disposable e-cigarettes, nicotine pouches and new non-tobacco products that seem to be hot now and moving JUUL up higher on the rack,” he stated.
Eric Pewterbaugh, category manager for RaceTrac, which operates 558 stores throughout the South, also hopes better visibility for vape will reinforce cross-category engagement among tobacco/nicotine consumers.
“A key item to look forward to will be the return of promotional activity from JUUL that coincides with the brand recognition growth of Vuse. This provides a dual opportunity for volume growth, as well as an advantageous assortment proposition for consumers,” he said.
Even more so, Pewterbaugh believes inflation will drive smokers to consider vape options.
“In 2023, we will see how the impact of cigarette pricing versus other tobacco products accelerates the consumer’s conversion journey. The data reveals that dual- and poly-users are transitioning away from combustibles to other tobacco products,” he explained. “Despite regulatory threats, vapor sales continue to grow nationally. Vapor as a category is here to stay.”