“We believe the trial and awareness generated by Vuse and MarkTen should help elevate the entire category and drive incremental trial,” predicts Wells Fargo.
E-cig c-store dollar sales maintained strong growt,h but sequentially decelerated to +25.6% in the period ending Nov. 22, 2014, driven by 55% unit growth, partially offset by -19% net pricing, Wells Fargo Securities reported, citing Nielsen data.
“Though pricing trends have been negative for 12 consecutive periods now, we believe that is at least partially due to difficulty in capturing SKUs given the rapidly evolving vapor category and proliferation of vapors/tanks/mods (VTM) and refills which tend to have a lower retail price/refill. We are encouraged by the strong 25.6% category dollar sales growth, driven by Big Tobacco’s national rollouts and we believe the trial and awareness generated by Vuse and MarkTen should help elevate the entire category and drive incremental trial,” Wells Fargo reported.
Wells Fargo noted that Reynolds American Inc. (RAI) remains the No. 1 e-cig player in c-store dollar share position, while Lorillard (LO) retained the No. 2 dollar share position at 22.9% share. Logic was No. 3—up to 18.6% share, and Altria was down sequentially to 6% and NJOY at 5.3%.
“Interestingly, according to IRI, NJOY is No. 1 in the “vaping” category nationally across all tracked channels (including both e-liquid and vaping accessories). In terms of unit share, RAI continues to be No. 1 with 44.1%, share followed by Logic (17.8%), LO (15%) and Altria (6.6%). We continue to be somewhat skeptical of RAI’s No. 1 44.1% unit share given Vuse is in 70,000 outlets vs. more than 100,000 for blu, though we note Vuse’s eq. pricing ($3.98) was 17% below category average ($4.80), which likely explains the fast growth,” noted Bonnie Herzog, managing director, beverage, tobacco and convenience store research for Wells Fargo Securities.
