As we approach 2024, c-store chains and franchisees are sorting through a jigsaw puzzle of replacement products and revised shelf sets.
Driven by the Food and Drug Administration (FDA) bans, market projections are that the tobacco backbar shelf sets will skew heavily toward alternative nicotine delivery SKUs by late next year.
Never mind that the FDA is overwhelmed by premarket tobacco authorizations for new nicotine products. The consensus is that the c-store front end will match what researchers are labeling “constantly changing preferences” of tobacco users, away from combusted tobacco toward gratifying nicotine cravings.
How is this helping? The Centers for Disease Control & Prevention’s (CDC) stated goal is to reduce combusted tobacco use to 5% of the adult population by 2030. Data shows we were already ahead of the curve before the pending FDA flavor bans. The focus on nicotine alternatives doesn’t contribute to a solution. It just kicks the can of addiction down the road and makes for better optics.
The FDA is simply rearranging the tobacco deck chairs.
According to the CDC’s 20-Year tobacco usage study, in 2022 11.6% of the U.S., aged 18 years or older, smoked cigarettes on a daily basis (higher if you include occasional users). Cigarette purchase volume between 2002 and 2022 declined by 57%.
Individual pack sales declined from 101 packs to 39 packs per smoker, per year. I think the actual decline is a little less, but you get the point.
Smokers continue to quit because of local restrictions, peer shaming, fewer venues, price increases, higher taxes and outright fear of illness and death. Cigarette volume has gone down by about 400 million packs a year for the past 10 years.
These CDC data points generally align with the Tobacco Tax & Trade Board tax removal statistics. Frequency of usage skews heavily to individuals over 50 years old.
Meanwhile, 18-24-year-olds are already at 5.3%. And 12-17-year-olds are at 1.6% for more than one smoke within 30 days, barely more than a rounding error.
By contrast, non-tobacco nicotine (vape) usage exceeds 11% among teenagers, an overwhelming “preference.” Meanwhile, the FDA has given tobacco users permission to believe that nicotine addiction is acceptable. The stigma of nicotine dependency has almost vanished, including among young people, many of whom weren’t going to smoke in the first place. To see the results, visit a high school restroom between classes.
The FDA flavor ban works against its own objectives. Smokers smoke because the taste and enjoyment of a cigarette is satisfying. The contentment of nicotine is a key part of the hand-to-lips, deep exhale, smoke-watching, conversational enjoyment of tobacco. Dangerous and harmful? Yes indeed, but rewarding in ways that go deeper than nicotine. Do you think people will ever share a nicotine pouch after sex?
Smokers quit out of fear of permanent illness and death as the dangers of tobacco smoke become common knowledge. It’s hard, but they do it. The data tells us the quit rate. More importantly, it shows the rate of non-starting that got us to 5% daily usage below age 25.
Current smokers switch to an alternative nicotine source to sustain their habit instead of quitting. This leaves the door open to switch back, and the data says they do.
Ending flavors in nicotine alternatives still leaves cigarette enjoyment as the greater pleasure. Why not both?
According to market projections poly-usage of both combustible and non-combustible nicotine products will be the trend. The circular logic of nicotine consumption to satisfy nicotine preference delivers nothing more than continued dependency. “Preference” has become a marketing buzzword for addiction. It’s the same street after you cross the FDA bridge.
According to the CDC, in 2002 one in four c-store shoppers was a tobacco user.
According to Nielsen, 85% of them were cigarette smokers. Today, it’s around one out of seven who walk in, and 74% of them buy cigarettes. Some 14% of shoppers are laying down 28% of c-store dollars.
Nielsen data showed that in the 52 weeks ending in October 2022, 8% of tobacco section sales were nicotine alternatives, around two-thirds of that was vape. In 2023, nicotine alternatives were flat, while smokeless grew by $830 million. If alternative nicotine SKUs increased 25% by 2026, what’s been accomplished? It’s still a cigarette
world. The switch by most menthol smokers to regular cigarettes might reduce net smokers by about 7%.
The 20-year decline in tobacco use started long before menthol and flavor bans.
Beyond the first 18 months, I don’t think the ban will have any more impact than if it hadn’t happened. Except that smokers who were quitting will feel better about themselves for using nicotine alternatives.
An Afterthought
The FDA has stated that the risks of tobacco smoke are a greater danger to public health than continued use of nicotine. That’s true, but the math doesn’t work for the longer term.
Data submitted a couple of years ago by the vape brand leader stated that 38% of their new consumers never smoked a cigarette before their first vape use. Meanwhile, studies by the UMASS Amherst School of Public Health show the tobacco quit rate via vape usage is only 9%. Nicotine math is not so good.
John Geoghegan has spent the last 30 years in the tobacco business, including vice president strategic planning at General Cigar Co., U.S. manager for DjEEP Lighters, head of marketing for Kretek International Inc. and manager of LaMirada Cigar Co. He began his career 57 years ago at Procter & Gamble. Geoghegan is a graduate of the University of Cincinnati. He lives in Laguna Niguel, Calif.