The regulatory saga for vape and e-cigarettes just keeps rolling along, leaving convenience stores waiting to operate under clear, concise and consistent rules once and for all.
The Food and Drug Administration (FDA) has approved fewer than 25 tobacco-flavored e-cigarettes and vaping devices for legal retail sales. By the end of 2023, FDA still hadn’t issued decisions on major brands, including JUUL and some Vuse and Alto products. However, by the end of January, the FDA confirmed that it has issued more than 440 letters warning brick-and-mortar stores along with online retailers to pull unauthorized products, including Esco Bars.
The agency also levied civil money penalties to nearly 90 businesses, per a statement on its website. What’s more, it has ramped up enforcement activities on imports. Late last year, the AP reported that the FDA seized multiple shipments of unauthorized e-cigarettes.
“NACS has urged the FDA to provide needed clarity around the premarket tobacco application process by publishing a list of which vapor products can legally be on the market and which should be removed. Only when retailers have that list and know what they are authorized to sell should FDA begin enforcement of cracking down on illicit vapes,” proclaimed Anna Ready Blom, director of government relations for the National Association of Convenience Stores (NACS).
Battling Headwinds
On the backbar, retailers still feel the effects from flavor bans and the limited FDA approvals. Vaping products earned $7.09 billion for the 52 weeks ending Dec. 31, 2023, according to Circana Total U.S. Convenience data.
However, unit sales were depressed by 8.7%. An 11.6% price hike helped dollar sales post a 1.8% growth.
Interestingly, vaping accessories enjoyed a positive year, with dollar sales jumping 19% and units gaining 10.9%.
“The category experienced some headwinds in 2023, but we were able to manage through them and outperform our trading area,” said Adam Long, senior category manager for Rutter’s, which owns and operates 85 sites in three states.
Long added that regulations also have dampened product innovation.
“There are particularly high barriers to entry in the category. As such, we don’t expect to see much innovation from non-established market participants. We do expect to see new offerings from established players, but that will be dependent on how they navigate the regulatory process for new products,” he stated.
All that said, Long will keep a watchful eye on the segment, including gauging how nicotine customers may alternate between products, including vape and smokeless.
“We’ll continue to look at tweaking our merchandising strategy in 2024 to maximize return on space,” concluded Long.