According to Market Watch, traditional electronic cigarettes that look a lot like cigarettes are no longer the industry’s leading assets. Instead, open system vaporizers that allow users to have a more customized experience are dominating the vaping world. The tank style ecigs are now selling $500 million more per year than the cigalike models. This is an important new trend that ecig companies are watching closely as it develops.
Analysts at Wells Fargo Securities report that the ecig industry is now worth $2.5 billion per year. Just six months ago, the microcig design as leading the pack, but now things have turned upside down with open system vaporizers accounting for 60 percent of sales. Analysts said that the tanks contribute $1.5 billion to the market each year, but that number is growing daily.
Wells Fargo’s Managing Director and Senior Tobacco Analyst, Bonnie Herzog, said that tanks are the way to go if you want to have an advantage in today’s vaping world. “Open system vaporizers are quickly gaining in customer confidence, with electronic cigarette users moving towards those more powerful, tank-style devices,” she said. “In addition to the experience provided through them, open system vaporizers are also a lower-cost vaping option over the long-term. We have found, for instance, that the weekly spend for an open system user is about 30% less than that of an e-cigarette user.”
Herzog said the industry has seen a 23 percent growth so far in 2014 and she expects the explosive industry to continue growing in the future. “Open systems represent a huge opportunity for the industry, particularly retailers,” she explained. “In a recent Tobacco Talk survey of retailers, we discovered that in coming months, 100 percent plan to feature both electronic cigarettes and open tank systems in stores. Open tanks are profitable – with high margins – and unsurprisingly, are quickly growing in volume and shelf space at retail.”
At the Smoke-Free Alternatives Trade Association, Executive Director Cynthia Cabrera agreed that tank systems are the way to go. She said that today’s vapers are interested in customization and the older cigalike models simply cannot compare to open system vaporizers when it comes to user-driven experience.
Industry leader VMR Products is also supporting the open system movement and recently released their own tank system with the V2 Pro series. Co-founder and CEO Jan Verleur said that customers are increasingly interested in having the option to use e-liquids rather than cartridges. “Electronic cigarettes have been in the marketplace for over five years. In that time, we’ve seen a fundamental shift in customer appetites towards open system devices designed to exceed the capabilities of the micro-cig form factor. These vaporizing devices represent a significant growth opportunity for our industry to meet rising customer demand,” Verleur said.
How do you feel about open system vaporizers? Do you think they are the best choice for quality vaping or do you prefer to stick with the traditional cigalike style?