Despite a lot of uncertainty about future regulations, smokers are still flocking towards electronic cigarettes. Recent sales data from Nielson revealed that sales were up substantially in March, with convenience stores reporting a 51.6 percent increase in unit sales. On the other hand, the prices are going down, which means vapers have even more incentive to make the switch from their old tobacco smokes to electronic cigarettes.
Analyst Bonnie Herzog from Wells Fargo has historically been very outspoken about her support for the ecig industry. She even predicted that ecigs would eventually outsell Big Tobacco, although it might take a decade to accomplish the transition. It looks like her predictions are right on track. Herzog said while sales are booming, the unit prices are falling as vapers switch from cigalikes and disposables to more advanced ecigs with refillable tanks. This allows them to only buy eliquids and atomizers, which cuts down the cost substantially over time.
March’s top selling brand was Reynold’s Vuse. Herzog said Vuse was priced lower than competitors, which could have tipped the scales in their favor. “We are impressed with Vuse’s strength,” she said. “We note Vuse’s pricing ($6.82) was 34 percent below category average of $9.12.”
The second runner up in March was Blu Ecigs from Lorillard. Third place was a split between Logic and MarkTen while NJoy trailed behind competitors in last place. NJoy had previously enjoyed market dominance, but as some of the other ecig lines improve the design, they are now lagging behind.
Sales were also up for Big Tobacco in March, but the increase was substantially smaller at only two percent. As more smokers learn about the benefits of ecigs and the tobacco-free alternative they offer, vaping is gradually moving towards market dominance.
Herzog predicts that the ecig industry will also see growing profits this spring. “We continue to expect strong manufacturer pricing in 2015, which should help offset broad volume declines and generate robust profitability and growth.”
While this data is exciting, it really paints an incomplete picture of the ecig industry’s true growth. Many smokers choose to buy their electronic cigarettes online, where they are often significantly cheaper and they can even buy in bulk. Vape shops also bring in a good volume of sales each month.
Have you noticed a shift in the ecig industry lately? Are more smokers switching to ecigs in your area?