Vaping Sales Rebound Ahead of Stricter FDA Rules

Sales of e-cigarettes have rebounded over the past three months, jumping ahead of the coming portion of smokers buying more of the product before tougher federal regulations begin Aug. 8, leading industry analysts said Wednesday.

Bonnie & middot; Herzog, of Wells Fargo Securities, said E-CIG sales rose 16.6% year-over-year for the 12-week period ending Sept. 10th.

Herzog's monthly report is based on data from Nielsen, which tracks the E-CIG mass channel and convenience store markets. Vaporizers, which typically sell for a lower price, are mostly available in tobacco and vapor stores, which Nielsen tracks as limited availability.

Introduced to the market on February 15, 2007, after electronics - including nearly all eCIGs and vaporizers - had to make up additional Food and Drug Administration requirements to prove that they did not cause harm to the public. This includes providing more details on liquid nicotine ingredients and manufacturing details.

Herzog said that on the sales bump coincided with VUSE, the best-selling CIG-A - like R.J. made a product price increase Renault Vapor, as well as in the coupon distribution push and raise offered the MarkTen XL of Numark, a subsidiary of Ochia Group.

“We also believe the industry's push for innovative and aggressive presumptive rules contributed (while) emphasizing the greater competition (of Sept. 16) with the announcement of nJoy's Chapter 11 filing,” Herzog said.

NJOY is the only major e-cigarette manufacturer to sell disposable and rechargeable CIG one of a kind products and vaporizers. It was fifth in market share at 5.1%.

Herzog said VUSE's market share was solid at 38.2% “reflecting solid consumer response to recent format enhancements and continued innovation. ”

Blu-ray eCigs, sold by ITG brand LLC, held second place with 16.9 percent. MarkTen XL's third place market share rose slightly to 15.3 percent.

Herzog continues to project $ 4.1 billion overall in 2016 E-CIG sales: $ 2.5 billion from vapors, tanks, mods and personal vaporizers, and $ 1.6 billion from e-cigarettes.

When it comes to sales of traditional cigarettes, they were up 1% in a 12-week period and up to 2% over the year.

“As we expected, cigarette sales are also starting to decelerate, dropping toward the historical trend of 3% to 4%, especially as the industry circles unusually strong massive trends over the past year,” Herzog said.

R.J. Reynolds Tobacco Co. continues to lead the industry in sales, most notably from Newport where sales grew, up 3.5% year-over-year in a 12-week period and up to 4.9% in the past year. Newport is the best-selling menthol cigarette and No. 2 brand overall.

Herzog said sales of premium cigarettes Natural American Spirit also benefited from the price hike, while Camel, the No. 3 brand, had seen a slight drop in sales.

Herzog said sales of ITG brand“s traditional cigarettes had stabilized in recent months, but were down 1.1 percent in a 12-week period.

ITG's market share was 7.4%, down from 10% in June 2015, when it acquired three Reynolds (Kuhl, Salem, Winston) and one Lorillard Company (Maverick) brands as part of the parent company Tei Brands PLC's $7.1 billion acquisition from Reynolds.

Herzog again warned that ITG continues to struggle to gain traction with four cigarette brands.

ITG officials had disputed Herzog's market share estimate, saying it was closer to 9.3%.