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Thread: Here comes big tobacco :) Wall Street Journal article

  1. #1
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    Here comes big tobacco :) Wall Street Journal article

    Big Tobacco Begins its Takeover of the E-Cigarette Market - Wall Street Journal - WSJ.com

    Anyone trying to figure out how much clout Big Tobacco can carry into the nascent market for electronic cigarettes might want to check out Colorado.

    Lorillard Inc., the No. 3 U.S. tobacco player and maker of Newport cigarettes, acquired the blu e-cigarette brand last year and has spent heavily to boost blu’s distribution and marketing. Blu is now the clear national leader, ahead of other major e-cigarette brands such as NJOY, Logic, Fin and Mistic that aren’t owned by a major manufacturer of traditional cigarettes.

    Now comes news from Colorado, where Reynolds American Inc., the No. 2 U.S. tobacco player and maker of Camel cigarettes, launched its Vuse e-cigarette in stores in July.

    The early returns? Vuse has built a 55.6% retail market share in the state over the last 16 weeks, leaving blu (25.5%) and NJOY (7.3%) in the dust, Reynolds said at an investor conference Monday, citing tobacco industry tracker Management Science Associates.

    Dedicated e-cigarette companies have argued they’ll come out on top because they pounced earlier and aren’t distracted by the much-bigger business of selling regular cigarettes. E-cigarettes – battery-powered instruments that turn nicotine-laced liquid into vapor – represent only about 1% of the $100 billion U.S. tobacco market.

    But the Big Three tobacco companies have at least three big advantages: extensive distribution networks, existing customer relationships numbering in the millions, and deep pockets.

    After just four months, Vuse’s distribution already spans 1,800 retail outlets in Colorado, according to Reynolds. The company also has a national database of 12 million tobacco customers to whom it can market directly – a major leg up because most people who try e-cigarettes already smoke. And with no current restrictions on e-cigarette advertising, it can spend heavily on television, print and radio ads.

    Not surprisingly, Reynolds doesn’t plan to stop in Colorado. It confirmed Monday that it plans to create a national footprint for Vuse in the first half of 2014.

    Altria Group Inc., the No. 1 U.S. tobacco player and maker of Marlboro cigarettes, has been even slower to enter the e-cigarette market. In August it began testing its MarkTen e-cigarette in some Indiana stores and plans to expand MarkTen into Arizona next month.

    But the early results at Lorillard and Reynolds indicate Altria could close the gap in a hurry.
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  2. #2
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    It's like heroin dealers opening up methadone clinics.
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  3. #3
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    As long as they don't lobby for increasing the barrier to market entry, such as medicinal regulation, online sales bans, excessive taxes, and bans on 'loose juice', Big Tobacco have my full support.

    I don't think they'll end up topping the 2nd & 3rd Gen ecig manufactuers, but I could be wrong. It will interesting to watch, as long as stupid leglisation doesn't get in the way.

  4. #4
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    Well they can keep on coming Fatman till the cows come home, but they will not be getting any support from me. As far as I'm concerned they need to be regulated before they get there hands on the ecig market and send all the smaller operators broke. It absolutely sh!ts me how the smaller businesses have set and made the ecig market what it is today, and now we have this nasty carcinogen selling big brother waltzing on in making out that they're the heroes. I'd actually be surprised if they use their real identity during their advertising campaign as well
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  5. #5
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    See mavinry4.. You've said all those things because, in the back of your mind. You know that's exactly what's going to happen. They will do everything within their power to gain total control, and maximum market share.

  6. #6
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    Quote Originally Posted by BlackDog View Post
    It's like heroin dealers opening up methadone clinics.
    You got that right BlackDog

  7. #7
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    I think one huge advantage the smaller e-cig makers and vendors have is that smokers hate the tobacco companies in the main. I think if there is an alternative which is reliable and tastes just as good as the big T products, people will opt for those. But then cost will come into it eventually Deep pockets are hard to beat in a price war.
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  8. #8
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    Even if smaller vendors remain to be allowed to exist.. nic and nic regulation may be the end of many products we know and love.. another alternative scenario is that tobbacco companies lobby to keep ecigs under the guise of making a menze but have the nicotine choked out of small operators or modders hands through legislation... what ever the case, hold onto your hats its going to be an interesting ride

    Quote Originally Posted by timmah View Post
    I think one huge advantage the smaller e-cig makers and vendors have is that smokers hate the tobacco companies in the main. I think if there is an alternative which is reliable and tastes just as good as the big T products, people will opt for those. But then cost will come into it eventually Deep pockets are hard to beat in a price war.

  9. #9
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    What do we have to worry about. When has a large multinational company ever screwed over it's consumers. /sarcasm

    I wish all people knew about PVs (3rd gen e-gigs). Most people don't bother reading up on it when they can just buy something in a shop or it's marketed better... beta max anyone?
    There should be daily updates on the news reporting which companies are own by tobacco pineapples.
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