Looking back over 2023, the vape category has faced many hurdles this past year as retailers adapted to regulations and the Food and Drug Administration’s (FDA) vape product marketing decisions.
In May, the FDA issued warning letters to 30 retailers for illegally selling various types of Puff and Hyde disposable e-cigarettes. Shortly after, in June, the FDA issued more warning letters to 189 retailers for illegally selling unauthorized products like Elf Bar and Esco Bar.
However, the latest round of fines went out to 22 retailers in September for the illegal sale of Elf Bar and EB Design e-cigarettes, which FDA called “popular and youth-appealing” brands.
By issuing fines and warning letters, the FDA has made it clear that c-store retailers have to pay more attention to how they’re stocking their backbars with vape products. So, not only do retailers have to stay ahead of consumers’ demands and trends, but they also have to make sure they’re following rules set by the FDA.
“When some retailers don’t follow the rules, it continues to create pressure for all retailers. As some do not follow the rules, more and more security is placed upon retailers,” said Nathan Arnold, director of marketing for Englefield Inc., which operates 119 Duchess c-stores throughout Ohio and West Virginia. “Additional signage mandates, more requirements and restrictions continue to hurt vape and other tobacco categories. It is confusing for our team members who are selling the products to consumers and the consumers as well.”
Other c-store retailers pointed out that it’s important that the illegal products being sold were stopped because any negative outcome following the purchase of an illegal item could result in a wide array of negative media statements — not only for illegal items, but possibly legal items as well.
“I think that the FDA holding retailers responsible is an effective way to show that the rules and regulations on these products should be taken seriously,” said Keelye Gaither, brand and marketing director for Key Oil, which operates a KeyStop Travel Center and KeyStop Express c-store in Franklin, Ky. “By following the FDA guidelines, retailers are able to not only avoid penalties but also show that they care about what is sold in their stores and the well-being of their customers.”
These rules have also caused issues and confusion for retailers when it’s time to restock their backbars with vape products.
“I know that there are legal constraints on products that have put retailers in unique situations,” Gaither continued. “There are distributors who have sold products to stores that later were banned products that the retailer was responsible for. This makes a retailer more curious when sourcing products for sale.”
Vape Trends and Sales
Aside from the rules set in place by the FDA, vape dollar sales have been staying steady, while unit sales saw a huge decline. For the 52 weeks ending Oct. 8, vape dollar sales were down 3.8%, while unit sales dropped significantly at 8.3%, according to Circana, a Chicago-based research firm.
“We see the category as being flat for the rest of 2023 and going into 2024,” Arnold said. “While flat is sometimes viewed as a positive in the tobacco space, this category has seen several years of growth, and that is concerning for us as a retailer.”
Nonetheless, Key Oil has been seeing an increase in sales for its vape products.
“So far, our vape sales have been growing steadily,” said Gaither. “Since August, we have seen a consistent growth of $700 each month for some of our vape products. We have also noticed a steady growth in the ZYN and On! pouches in the last few months, but this is not taking away from our rising vape sales.”
As far as trends and consumer demands go, retailers have noticed consumers still want flavored e-cigarettes despite regulations.
“While customers are continuing to purchase these items, the selection is tightening, and the ever-changing rules and regulations create uncertainty about that category,” noted Arnold.
Consumers also want vape products with more nicotine and products that allow them to have a higher number of puffs while smoking.
“I believe the most important thing that people consider when purchasing a vape product is first, how many puffs you are getting and then the price,” said Gaither. “Having products that clearly state these numbers makes it easier for us to retail.”
“We see customers demanding higher-nicotine items. This continues to strengthen our customer base,” added Arnold. “While flavors are diminishing, we see the switch to higher nicotine become more popular.”
Overall, as 2023 ends and 2024 begins, retailers will continue to keep a close eye on vape rules and regulations while still offering products their customers know and love.
“We are looking to potentially offer cannabidiol vape products,” said Gaither. “For us, we really value the customer experience, and we do not want any products that we bring into our stores to negatively influence that.”