The North American Vaping Market

Part
01
of seven
Part
01

E-Cigarette Market - Market Size

Through the years 2018 to 2025, the global e-cigarette market will experience dramatic growth. Generally, the popularity of e-cigarette products and the awareness of the health hazards of traditional cigarettes serve as an impetus for the market to grow during these years. Globally, North America and Europe dominate the market. In fact, in 2017, North America posted an estimated $5.2 billion in e-cigarette products revenue. The North American market will grow at a CAGR of 16.03% through the years 2018 to 2025 leaving us with an estimated market value of $17.08 billion in 2025.

WORLD MARKET

In 2016, the global e-cigarette industry has posted $7.1 billion in market value. The market is slated to grow considerably through the years 2018 to 2024 due to the increasing popularity of consumers demand on environment-friendly and economical products. North America and Europe together dominate the industry by accounting for over 75% of the global e-cigarette market in 2016. The high consumption rate of vape products in these regions can be attributed to the fact that e-cigarette products are considered viable options to curb smoking addiction among its residents. The European market will sustain its dominance in the market for the years 2018 to 2024 with UK and Italy being considered major growth drivers.
Asia Pacific region continues to have an increment share in the global e-cigarette market by contributing over 20% of the industry's revenue in 2016. The growth in the Asia Pacific region is driven by its residents' efforts to lessen smoking addiction along with an increasing consumer's interest in e-cigarettes. Furthermore, the region has posted a growing disposable household income which means an increase in the buying power among its residents. The major growth contributors in the Asia Pacific region are China, Malaysia, and India.

NORTH AMERICAN MARKET

In 2017, the North American region is the largest e-cigarette market in the world contributing an estimated $5.2 billion in revenue to the global e-cigarette industry. It is expected that North America will continue to dominate the global e-cigarette industry through the years 2018 to 2025. In fact, by 2025, the region will contribute an estimated $17.08 billion in market value. The US is considered to be the region's major growth driver contributing approximately 96% or $16.40 billion ($17.08 billion x 96%) of the North American e-cigarette market.
Using the aforementioned data points, we can calculate the Compounded Annual Growth Rate (CAGR) of the North American e-cigarette market using a CAGR calculator:
2017 market value: $5.2 billion
2025 market value: $17.08 billion
Number of years to 2025: 8 years (2025 2017)
CAGR of the North American e-cigarette market: Entering the above data points in the CAGR calculator we get 16.03%.
Hence, the North American e-cigarette market will grow at a CAGR of 16.03% through the years 2018 to 2025. The global consumer's awareness on the health hazards of smoking addiction remains to be one of the most compelling reasons why there is a rapid increase in the global e-cigarette market.

ADDITIONAL INFORMATION

Currently, it is estimated that there are 10 million users of e-cigarettes in the US while the UK has 3 million users. The US Centers for Disease Control estimates that 3.7% of the US adult population use e-cigarette products "either every day or on some days".
In Canada, the Waterloo University estimates that within the past 30 days, 946,000 Canadians have used e-cigarette products while 308,000 Canadians use e-cigarette products on a daily basis. This puts the Canadian e-cigarette market to stand between 308,000 to 946,000 users.

CONCLUSION

In conclusion, the increasing popularity of e-cigarette products together with well-informed consumers on the hazards that traditional cigarettes pose on one's health serve as salient growth drivers of the e-cigarette industry. The North America e-cigarette market will grow at a CAGR of 16.03% through the years 2018 to 2025. In 2017, the North America region posted a $5.2 billion in market value and is expected to grow to $17.08 billion in 2025. In 2025, it is estimated that the US will account for approximately 96% or $16.40 billion of the North American e-cigarette industry.
Part
02
of seven
Part
02

E-Cigarette Market - Demographics

Although quantitative demographic information for typical e-cigarette users was not available for North America, my colleagues and I have identified the demographic profile of the typical e-cigarette user in the United States. In the United States, the typical e-cigarette user is a white male in the 18 to 34 age group. Americans with an associate degree are the most prevalent users of e-cigarettes, and Americans who do not live in large metropolitan areas are slightly more likely to use these products. Employed Americans are more likely to use e-cigarettes than those who do not participate in the labor force or are currently unemployed. Additionally, current or former smokers of tobacco cigarettes are much more likely than never-smokers to use e-cigarettes, although the use of e-cigarettes as tobacco cessation products is an emerging topic in current scientific literature. Below is a deep dive of our findings.

METHODOLOGY

In order to research demographics for typical e-cigarette users, my colleagues and I focused on North American demographics, with an emphasis on the United States and Canada. However, we discovered that the available research on user demographics differs considerably between the two countries, and these findings could not be easily reconciled to produce a standard demographic profile for e-cigarette users in North America. As a result, we focused our research on providing a demographic profile for e-cigarette users in the United States only, as we identified a number of current, reputable statistics that allowed us to create a comprehensive profile. A typical Wonder brief contains research that has been published within the preceding 24 months. However, in many cases, some reputable research we located was conducted outside this time frame, although the ultimate analysis and publication of the corresponding findings occurred within the last two years. In addition to a brief overview of the industry, we have examined e-cigarette usage rates among eight demographics: age, race, gender, education, income, employment status, location, and current or former tobacco usage.

Overview of the industry

Our findings indicate that the e-cigarette industry first gained a strong foothold in the United States around 2010, with a dramatic increase in usage rates observed by 2014. The Centers for Disease Control and Prevention (CDC) currently estimate that nine million Americans use e-cigarette products. It is believed that 12.6 percent of all American adults have experimented with these products at least once. In 2016, the e-cigarette market in the United States was valued at $2.35 billion.

Demographic profile of e-cigarette users

1. Age

In general, e-cigarette users in the United States are more likely to be found among younger age groups. Research into differences in age groups among American e-cigarette users indicates that adults ages 65 and older are the least likely to experiment with e-cigarette usage, at a rate of only 2.3 percent of all e-cigarette users. Among adults ages 45 to 64, only 7 percent of American adults use e-cigarettes, while 9.4 percent of Americans ages 35 to 44 use e-cigarettes. In comparison, the two largest demographic groups for e-cigarette users in the United States are adults ages 25 to 34 (12.8 percent) and ages 18 to 24 (14.8 percent). In total, 27.6 percent of e-cigarette users in the United States are ages 18 to 34.

Growing concern has been voiced about e-cigarette usage rates among younger Americans. In addition to the 18 to 24 age group being the largest consumers of e-cigarettes among American adults, there is evidence that the age of first e-cigarette usage is decreasing. In 2015, 16 percent of high school student self-reported that they have used e-cigarettes, while 5.3 percent of middle school students in the United States had experimented with these products. E-cigarette usage is currently higher than usage of all types of tobacco products in American schools.

2. Race

Caucasians and those reporting to be "other races" are more likely than African-Americans and Asian-Americans to use e-cigarettes. It is estimated that 8.1 percent of Caucasians have experimented with e-cigarettes, while 12.7 percent of Americans identifying as "other" races have used e-cigarettes. Approximately 4.7 percent of Americans of Hispanic origin reported e-cigarette usage, while 8.1 percent of non-Hispanic Americans have used these products. In comparison, only 4.7 percent of African-Americans have used cigarettes, with Asian-Americans reporting the lowest usage rate, at 3.6 percent. However, among African-Americans who do use e-cigarettes, this demographic is the most likely to express a desire to continue using these products.

3. Gender

Men have been consistently found to be heavier users of e-cigarettes than women in the United States. Men are more likely than women to experiment with e-cigarettes at least once, at a rate of 8.6 percent to 7 percent. In the same study, men reported they were more likely than women to have used e-cigarettes more than once in the preceding 30 days, at a rate of 2.3 percent of men to 1.7 percent of women. Finally, 1.1 percent of men consider themselves "regular users," compared to only 0.8 percent of women.

4. Education

Americans with a 4-year college degree are the least likely demographic to use e-cigarettes, with only 4.2 percent of Americans holding a bachelors degree or higher reporting they have experimented with e-cigarettes. Thus, there is a stark difference between e-cigarette usage among college graduates with a bachelor's degree and those with an associate degree (10.2 percent), high school diploma (9.2 percent), or less than 12 years of secondary education (8.1 percent).

5. Income, Employment, and Home Ownership Rates

E-cigarette usage is inversely proportional to income level. Among Americans earning $75,000 or more annually, only 5.7 percent use e-cigarettes. In contrast, 7.7 percent of Americans earning between $40,000 and $74,999 annually use e-cigarettes. An income of $20,000–$39,999 is associated with an e-cigarette usage rate of 8.9 percent. The highest e-cigarette usage rate is reported among Americans earning less than $19,999 annually. It is estimated that 10.2 percent of e-cigarette users in the United States are in this category. It is estimated than 8.7 percent of Americans who use e-cigarettes are employed, while 6.7 percent who are unemployed or do not participate in the labor force use these products.

Despite exhaustive research, we did not find current research that reflects the relationship between home ownership and e-cigarette usage rates, as it appears this is one demographic that has not been explored. However, we expect that only Americans at higher income levels would be able to afford to own their own homes, and thus e-cigarette usage would be lower among homeowners.

6. Location

There are three location variables to consider when evaluating the demographic profile of a typical e-cigarette user. First, research has indicated that the highest concentration of e-cigarette users is found in states that spend the highest levels of funding per capita on tobacco control. In states in the highest quarter of tobacco control spending, 8.7 percent of residents are e-cigarette users. In contrast, in states with the lowest levels of spending per capita on tobacco control, only 7.8 percent of residents use e-cigarettes. Second, e-cigarette users are slightly less likely (8.9 percent) to live in a large metropolitan area than e-cigarette users living in a big city (7.4 percent). Finally, residents in the "west central region" of the United States are the most likely to use e-cigarettes (9.3 percent), while residents in New England are the least likely (6.3 percent).

7. Former or Concurrent Tobacco Usage

There is evidence that the majority of users in the United States who decide to try e-cigarettes are current or former users of tobacco cigarettes. Approximately 47.6 percent of current tobacco cigarette users have tried e-cigarettes, compared to 55.4 percent of former tobacco cigarette smokers. In stark contrast, less than 4 percent of American adults who have never utilized tobacco cigarettes decide to experiment with e-cigarettes. In another study, e-cigarette usage rates among American adults who had never previously used tobacco products was reported to be as low as 2 percent.

Among American adults who consider themselves e-cigarette users, only 3.7 percent reported that they used e-cigarettes every day or some days each week. Among users who experiment with e-cigarettes and choose to continue using these products, usage rates vary. Only 15.9 percent of current tobacco cigarette users are also e-cigarette users, while usage rates among former tobacco cigarette users are slightly higher, at 22 percent.

There is an emerging body of research that focuses on the impact of e-cigarette usage on tobacco cessation. While current legal regulations in the United States permit manufacturers of e-cigarettes to make claims that the products can be used as tobacco cessation products, few manufacturers choose to do. As a result, most e-cigarettes in the United States are classified as recreational products. In the largest and most recent survey on this topic, which was the "2014-15 Current Population Survey-Tobacco Use Supplement (CPS-TUS)," researchers found "recent quitters" are an important demographic. Recent quitters are defined as those users who have ceased using tobacco products within the previous year, and they are the group most likely to experiment with e-cigarettes. It is estimated the 49.4 percent of "recent quitters" have tried e-cigarettes at least once. Of this group, recent quitters were also the most likely to continue using e-cigarettes, with 38.7 percent indicating they continued their usage. On the other hand, when recent quitters of tobacco products decided to cease using e-cigarette products as well, they typically do so within one year. It is estimated that 30.4 percent of recent quitters of tobacco cigarettes also cease using e-cigarettes within one year. In light of evidence that as tobacco usage rates in the United States have fallen to a historical low while e-cigarette usage has increased, additional research into this topic is merited.

CONCLUSION

In summary, our findings indicate that the typical e-cigarette user in the United States is a while male in the 18 to 34 age group with an associate degree. E-cigarette users are less likely to live in a large metropolitan area, and the majority of first-time users are current or former smokers of tobacco cigarettes. E-cigarette usage is higher among employed Americans.
Part
03
of seven
Part
03

E-Cigarette Market - Leading Brands

There was no pre-existing list or information on the top 5 e-cigarettes (e-cigs) in North America by market share. To search for this information, we scavenged third-party websites, news articles, and company websites. Instead, we were able to find the top 5 e-cigs by market share for the U.S., which was the region of the highest priority.

The top 5 leading e-cigarette brands in the U.S. by market share are:

1. Juul46.8%
2. Vuse (R.J. Reynolds Vapor Co.) — 20.7%
3. MarkTen XL (NuMark LLC, subsidiary of Altria Group Inc.) — 11.4%
4. Logic (Japan Tobacco) — 7%
5. blu eCigs (ITG Brands LLC) — 4.4%

This list was pre-compiled by research company Nielsen after a 4-week study that ended December 30, 2017. Their results were shared on the Winston-Salem Journal.

Juul Products

The company had a huge boost in sales in the last year, jumping from 25% in 2016 to 40% on December 2, 2017, and finally to 46.8% on December 30, 2017. JUUL was developed by Stanford graduate students in 2007, and "creates an aerosol to activate ingredients using a regulated heating element." JUUL has just one brand called JUUL.

Device Kits ($39.99) include:
— Rechargeable JUUL device (comes in black or navy blue)
— USB Charger
— One year limited device warranty

Starter Kits ($49.99) include:
— Rechargeable JUUL device (comes in black)
— USB Charger
— Four JUULpods (Virginia Tobacco, Cool Mint, Fruit Medley, and Creme Brulee)
— One year limited device warranty

JUULpods ($15.99/pack, each pack has 4 pods) flavors:
Mango, Cool Mint, Virginia Tobacco, Cool Cucumber, Classic Menthol, Fruit Medley, Creme Brulee, Classic Tobacco, and Flavor Multipack.

Vuse Products

Vuse has 3 brands: Ciro, Vibe, and Solo.

CIRO
(0.9ml v-liquid, 1.5% nicotine, 260mAh battery)

Vuse Ciro Complete Kit ($23.48) includes:
— One ciro power unit
— One flavor pack of your choice (3 cartridges per pack)

Vuse Ciro Power Unit ($9.99) includes:
— One ciro power unit
— One USB charger

Vuse Ciro flavor pack ($13.49, 3 cartridges per pack) flavors:
Fusion, Tropical, Melon, Menthol, Mint, Nectar, Original

VIBE
(1.9ml v-liquid, 3.0% nicotine, 600mAh battery)

Vuse Vibe complete kit ($24.98) includes:
— One vibe power unit
— One flavor pack of your choice (2 tanks per pack)

Vuse Vibe power unit ($14.99) includes:
— One vibe power unit
— One USB Charger

Vuse Vibe flavor packs (2 tanks per pack) flavors:
Menthol, Original, Mint, Nectar, Melon, Tropical, Fusion

SOLO
(0.5ml v-liquid, 4.8% nicotine, 270mAh battery)

Vuse Solo complete kit ($18.74) includes:
— One solo power unit
— One flavor pack of your choice (2 cartridges per pack)

Vuse Solo power unit ($10.99) includes:
— One solo power unit
— One USB Charger

Vuse Solo flavor pack ($7.75, 2 cartridges per pack) flavors:
Fusion, Tropical, Crema, Melon, Menthol, Mint, Nectar, Original, Berry, Chai

MarkTen XL Products

Markten provides two brands on their official website: Markten and Markten Elite.

MARKTEN
Markten uses FourDraw technology that allows vapor to flow through 4 holes on the cartridge tip.

MarkTen Device Kit ($6.89) contains:
— One MarkTen battery
— One MarkTen cartridge
— One USB charger
— Choose from flavors: Classic (3.5% NBW), Menthol (3.5% NBW), Bold Menthol (4.0% NBW), and Bold Classic (4.0% NBW)

All MarkTen cartridge flavors and NBW %:
Menthol (3.5%), Classic (3.5%), Bold Menthol (4.0%), Bold Classic (4.0%), Smooth Menthol (2.4%), Summer Fusion (2.5%), Smooth Cream (2.4%), Winter Mint (3.5%), Mardi Gras (2.5%), Caribbean Oasis (2.5%)

Other MarkTen Kits and Bundles:
— Trial Offer ($21.89) — 1 device kit, 2 cartridge packs of choice
— 4 Cartridge Pack Bundle ($30) — 4 cartridge packs of choice
— Assorted flavor bundles ($22.50) — 3 set cartridge packs

MARKTEN ELITE
Markten Elite is a pod-based device with each pod holding 1.5mL.

MarkTen Elite Battery Kit ($19.99) includes:
— One MarkTen Elite battery
— One USB charging cable

MarkTen Elite (Flavor) Pods and NBV% ($8.99 per pack, $7.19 with auto ship): Glacier Mint (1.8%), Sweet Original (1.8%), Strawberry Brulee (1.8%), Apple Cider (1.8%), Hazelnut Cream (1.8%)

Other MarkTen Elite kits and bundles:
— Two pod pack trial offer ($37.97) — 1 battery kit, 2 pod packs
— Five pod pack trial offer ($64.94) — 1 battery kit, 5 pod pack

Logic Products

Logic offers four product brands: Pro ($19.99), LQD Tank ($29.99), Power ($9.99), and Vapeleaf ($9.99).

PRO
Pro products come in 4 flavors and 2 different levels of nicotine. Flavors include: Tobacco (20 mg/ml), Menthol (20 mg/ml), Cherry (18 mg/ml), and Berry Mint (18 mg/ml). Capsules are sold for $7.99 a pack with 2 capsules per pack.

Logic Pro ($19.99) includes:
— 1 Pro pen (650mAH battery)
— 1 USB charger

LQD TANK
LQD Tank is a "variable voltage vaporizer" using a "dual-chamber tank system" with dual coils. It features an auto-lock and security feature that activates after 10 minutes.

Logic LQD Tank ($29.99) includes:
— 1 LQD tank
— 1 extra atomizer free for a limited time

Logic LQD E-Liquid 10 ml bottle is sold for $7.99 with a 6 mg/ml nicotine level. There are 11 flavors and features a "certified three-step unlocking system designed to prevent child access."

POWER
Logic Power uses a 300mAH rechargeable battery with just one nicotine level (27 mg/ml). Four flavors are available: Tobacco, Menthol, Cherry, and Berry Mint. Capsules are sold at $7.99 per pack, with 2 capsules per pack.

Logic Power Rechargeable Kit ($9.99) includes:
— 1 pre-filled cartridge
— 1 USB charger
— Available kit flavors are Tobacco, Menthol, and Cherry.

They also provide disposable versions on third-party websites.

VAPELEAF
Logic Vapeleaf ($9.99) just includes the battery and USB charger, with tobacco caps sold separately. Vapeleaf passes "heated vapor through ground tobacco" for a greater tobacco flavor. Tobacco is the only available flavor, and is sold for $7.99 per pack, with each pack including 1 cartridge and 5 tobacco caps.

blu eCigs Products

Blu offers 5 products: myblu, disposable, Plus+ Xpress, Plus+ Rechargeable, and Pro.

MYBLU
Blu is currently running a promotion to sell their myblue Starter Kit for $1 each (originally $19.99). It includes their myCARE lifetime-limited device warranty, the myblue device, one 2.4% Gold Leaf liquidpod, and a USB charger. myblu also has 8 flavors and 4 different nicotine levels, including 0% nicotine. Liquidpod packs are $8.99 each with two 1.5ml liquidpods per pack.

DISPOSABLE
Disposables are designed to be disposed of after one use and come fully charged. 6 different flavored disposables are available at $7.99 each: Tobacco, Magnificent Menthol, Vivid Vanilla, Carolina Bold, Cherry Crush, and Polar Mint. They come in either 2.4% or 4.5% nicotine strengths.

PLUS+
Xpress is sold for $11.99 and includes a battery, USB charger, and 2.4% nicotine tank. Rechargeable is sold for $42.99 and has room for three refill tanks and two batteries. Plus+ has 11 flavors and 4 different nicotine strengths.

PRO
Pro features a larger battery and refills using e-liquids. It is sold for $29.99 and includes a Pro clearomizer, USB charger, rechargeable device, and one tobacco liquid. It has 11 flavors and 3 different nicotine strengths.

Conclusion

We were able to find the top 5 e-cigs by market share for the U.S., which was the region of the highest priority. The top 5 brands (in order) are: Juul, Vuse, MarkTen XL, Logic, and blu eCigs. A list of available products was also provided for each of the brands.
Part
04
of seven
Part
04

E-Cigarette Market - Purchase Locations

North America currently holds the largest share of the e-cigarette market. In this region, and especially within the U.S., the key distribution channels for e-cigarettes are online and retail channels.

Online channels consist of OEM e-commerce websites and online DTC retailers, including Amazon and Alibaba. Around 26% of e-cigarette users said they have made e-cigarette purchases online, and online sales are expected to increase significantly through 2023.

The brick-and-mortar retail segment holds the majority share, specifically convenience stores which make up 81% of the retail segment, followed by drug stores and grocery stores. Vape shops make-up around one-third of the vaping industry, suggesting that there may be some cross-over between channel segments.

Traditional tobacco stores hold the majority sale share of closed system device sales. While open-system users have typically preferred vape shops, recent data suggests that there is shifting preference way from vape shops and towards traditional retail channels among these users.

Below, you will find a deep dive of our findings.

methodology

In order to answer your question, we conducted extensive research through industry reports, market reports, consumer surveys, and trusted media sites.

While there are a significant number of highly reputable reports which cover e-cigarette distribution channels in-depth, all the reports we found are behind paywalls and, therefore, we were only able to harvest the qualitative data from the report summaries and press releases of these reports. While this qualitative data was rather insightful, it did not provide the hard data in terms of percentages and numbers that you were hoping for.

As a result, we began to extend the scope of the research to include some older data (i.e. data older than two years). This was necessary in order to find insights which directly answered your question. However, even in this regard, the amount of publicly available information which provided quantitative insights regarding sales stats, sales channels, distribution channels, and consumer preferences was severely limited.

We also attempted to triangulate some estimates by examining the financial reports of leading manufacturers in this market to see if there was any insight on the performance of their distribution channels. However, we discovered during our analysis of key players that the majority of players in this market (such as the market leader, Njoy) are private companies, and therefore, their annual reports are not publicly available.

Despite this, we have managed to pull together a few key insights, which we believe sufficiently helps to answer your question. While much of the more useful data is out-of-date, the recently published qualitative insights we found suggest that the e-cigarette industry is on the rise and that the sales breakdown of distribution channels today is relatively the same as it was several years ago.

e-cigarette key distribution channels

A recently published press release on PR Newswire provided some qualitative insights on the current e-cigarette distribution channels. While these insights are globally focused, we believe they are still highly relative to North America individually, as this report states that North America holds the largest share of this market. The growth of the North American market is being spurred by an increasing number of vape shops and online e-cigarette outlets.

According to this press release, the online sales segment is expected to increase by a significant amount between 2018 and 2023, due to the fact that this channel offers a wider variety of products compared to retail locations. Despite the projected rise in the online segment, e-cigarette products are still sold primarily through retail channels, as these channels hold the majority share of sales. The retail segment is further divided into "convenience stores, vape shops, tobacco shops, grocery shops, drug stores, and other retail outlets." Meanwhile, the online channel is further segmented into "OEMs' e-commerce portals and online direct-to-consumer stores such as Amazon, eBay, Alibaba, and AliExpress."

Additionally, a 2016 market report for the U.S. e-liquid market states that the leading distribution channels for e-liquid are online and retail channels, with the retail channel segmented into "convenience stores, pharmacies, tobacco shops, and vape shops among others."

E-CIGARETTE share of DISTRIBUTION CHANNELS

According to data published by Statista in 2012, the units of e-cigarette sold across various retail segments were as follows: convenience stores sold 13.2 million units, drug stores sold 4.27 million units, and grocery stores sold 0.3 million units. This data set did not include any other retail segments. This likely because, according to an NCBI report, these segments appear to have been the three main retail channels were e-cigarettes were being sold between 2012 and 2013. The report states:

"In convenience stores, dollar sales increased markedly during 2012–2013: 320.8% for disposable e-cigarettes, 72.4% for starter kits, and 82% for cartridges. In food, drug, and mass merchandisers, dollar sales increased 49.5% for disposable e-cigarettes, 89.4% for starter kits, and 126.2% for cartridges."

A 2017 U.S. e-cigarette consumer survey revealed that the sales channels that consumers prefer may skew dependent on the specific type of device the consumer uses. Traditional tobacco channels hold the majority share of sales for closed-system devices and a significant share of open-system sales. Since 2015, the traditional tobacco channel has seen a rise in popularity, as sales have been shifting away from specialty shops and towards traditional retail channels. This is a new trend, as open-system users have previously shown a preference for vape shops.

Data from 2014 shows that the retail channel in the U.S. had sales of $795 million for the year. Convenience stores had an 81% share of the retail category. Another source states that vape-shops and lounges account for approximately "one-third of the industry." This suggests that there is likely some crossover between channel definitions. For example, we assume it is likely that some vape shops could also be considered a convenience store and vice versa depending on the types of inventory and products being sold.

For the online channel, 2015 data published by Statista, a survey of e-cigarette users shows that 26% said they make online purchases of e-cigarette devices and/or supplies.

It should be noted here that during our research, we did not come across any data reflecting e-cigarette sales at festivals. We assume this is likely because this data may be grouped under another channel description, or because this data may be difficult to track and monitor due to the nature of the sales channel. Additionally, our research findings suggest that all festivals make their own rules when it comes to e-cigarettes and vaping products and, therefore, we assume vendors are not allowed to sell these products at festivals that restrict them. Based on this, we would assume that e-cig sales at festivals are relatively quite low compared to the dominant channels.

conclusion

In closing, while publicly available and recently published quantitative data on this topic was severely lacking, we have pulled together recently published qualitative insights and compared them to older quantitative insights to illustrate the current landscape of e-cigarette distribution and sales channels.
Part
05
of seven
Part
05

E-Cigarette Market - Events

E-cigarette companies JUUL, NJOY, and Logic have all used experiential marketing campaigns that include brand activations through vaping lounges that offered product samples. E-liquid manufacturer Mad Ape Vape and vaping apparel company Vaprwear also tout the benefits they reap from event marketing tactics, such as event sponsorships, live appearances at vaping shops, and product demonstrations at events such as Lollapalooza.

Please note that to find relevant data, I had to search a bit further back than our usual two-year time span. Despite searching sources such as the Canada Vaping Association and Canada's Vape Expo, all examples I found were in the US.

JUUL Labs

Though slightly dated (2015), an article at AdAge discusses the "Vaporized" marketing campaign launched by JUUL, which included pop-up "JUUL bars" at events in Los Angeles, New York, and the Hamptons. I looked for follow-up data on the success of these JUUL bars, but I found none.

However, an article at Event Marketer discusses a month-long brand activation by JUUL in which they set up a vaping lounge where visitors could relax and sample four products. Designed by Boxman Studios, the 20 x 8 foot container housed the colorful lounge space with illuminated displays and a Bosco Animated Gif Booth. Visitors were encourages to share the experience on Twitter and Instagram using the #JUUL hashtag.

NJOY

E-cigarette brand NJOY embarked on a week-long experiential marketing campaign during the 2015 Mercedes-Benz Fashion Week in New York. The campaign was developed by Factory360, which hired promotional models to sample NJOY products and invited social media influencers to write about the experience. After-parties gave influencers additional access to supermodels, celebrities, and fashion designers. The campaign was deemed a success with 22,000 samples handed out to influencers and celebrities, doubling their distribution from the previous year's event. The company's Facebook likes increased by almost 800 and over one million impressions were generated. Another 60,000 impressions were garnered from the social influencer's participation.

Logic Vapeleaf Studio

E-cigarette brand Logic has used its pop-up Vapeleaf Studio to engage consumers at events in New York. The free event in the Lower East Side of New York gave smokers who RSVPed the opportunity to try out Logic's products. The three-day event included top New York DJs Fabi Jugo and Ryan Clover, food, and local craft beers. While I did not find any specific success metrics, photos from the event show lots of people enjoying the event and sampling products. Also, there is mention of future Vapeleaf Studio events, which indicates a level of success.

Mad Ape Vape

Mad Ape Vape is an e-liquid manufacturer based in Tampa, FL. Owner Jesse-M Smits notes that the company sponsors and attends conventions, where they demonstrate their products, and he makes "personal appearances at vape shops." However, I found no specifics regarding when or where they have attended events or success measures.

Vaprwear

In an interview, Tom Gruger, CEO of Vaprwear, a vaping apparel company, mentions the company's use of events as a marketing vehicle. Gruger says that they get a great response when they attend events because people have a firsthand experience using or interacting with their product. He specifically mentions attending Lollapalooza in Chicago, which the company attends every year. Wearing one of the company's vaping backpacks created a lot of interest in the product from attendees who would approach him, saying things like, "Wait a minute! What just happened there?" While this is an example of a vaping apparel company, rather than an e-cigarette company, it offers some insight into the success vaping-related companies can have when attending events.

CONCLUSION

In conclusion, e-cigarette brands JUUL, NJOY, and Logic have all incorporated brand activations through their experiential marketing campaigns, including vaping lounges and pop-ups that offer product samples. Mad Ape Vape and Vaprwear are vaping industry companies that have also seen success from event marketing tactics, including event sponsorships and product demonstrations at events.
Part
06
of seven
Part
06

E-Cigarette Market - Cultural Views

With more than 9 million US e-cigarettes users and 946,000 Canadians having used them recently, it's hard to say that vaping today is taboo. The most prominent reasons the consumers of electronic cigarettes continue to vape are :
— Compared to smoking, e-cigarettes are safer (still not known)
— The smell of vapor is less offensive
— A plethora of flavors to choose from
— Device settings can be customized
Reduced stigma compared to smoking

TWITTER

On Twitter, e-cigarettes get more positive than negative tweets, with the most re-tweeted tweet being the one providing a link to the reviews of different electronic cigarettes. This fact suggests that the public is mainly concerned with the opinions and experiences of others. Nevada, Florida and California are the states with most tweets related to e-cigarettes.

PERCEIVED HARM

About 65% of Americans believe e-cigarettes are harmful, more than cannabis, but less than regular cigarettes, with women being more prone to this opinion. 44% to 48% of US adults believe that they are less harmful, while 32% put them on equal footing in regard to harmfulness. Only 2% of Americans express that neither of them is harmful in one study, and 11% in another. Compared to marijuana, the difference between those that regard cannabis and adults believing e-cigarettes as being less harmful, is only 2%. More Americans express that marijuana does less damage to the health of the user.

CESSATION AID

Nearly half of Americans believe that vaping does not help in quitting cigarettes, while 38% believe they do. 56% of adults believe that vaping leads to smoking in the future among teenagers, 33% think that it doesn't matter, while only 6% believe the chances are slimmer that they'll start smoking.

TAXES AND REGULATION

The strongest beliefs about e-cigarettes surround limiting the age of consumers to 18 and older. This is the age from which electronic cigarettes can be bought (94%), and in addition, labeling the amount of nicotine a liquid has (90%) is recommended. Many adults believe that e-cigarettes should be taxed like tobacco cigarettes, while 32% oppose such taxation. Candy-like flavors with nicotine should be prohibited, as stated by 48% of adults. A study on Reddit found that the e-cigarette users' opinions on regulations of electronic cigarettes is mostly negative.

INDOORS

A majority of people feel vaping in restaurants, schools and alike should be prohibited — 69%, while only 26% support indoor use. The new trend among students is the JUUL, a vape pen that's discreet in its vapor production, making it perfect for closed environments like school and workplace.

ADVERTISING

61% of adults support the prohibition of TV e-cigarette advertisement.

TRENDS

As the e-cigarette industry had been growing, new trends started to emerge. Vape tricks and consumers who practice them are becoming more popular, with new competitions like Vape Summit gaining more traction. Vape bars like American Vape Cafe are rising in popularity and offer a built-in shop for vaping equipment along with cafe-like service. Vape photography, which focuses on the shapes of vapor, and unusual flavors also bring more attention to the e-cigarette community.

SAFETY

Health authorities are warning that vaping is dangerous, and mostly focus on youth eager to try vaping, which has had a negative effect on the market slowing the sales of e-cigarette products and even bankrupting a large manufacturer, NJoy. Another reason is the fact that the public doesn't think that e-cigarettes have as good of a nicotine hit as regular ones. The authorities rarely state that electronic cigarettes do 95% less damage than tobacco cigarettes. Conversely, The American Cancer Society now advises clinicians to promote switching from tobacco cigarettes to electric ones.

POP CULTURE

Actors and actresses have been shown to smoke e-cigarettes on public occasions, in movies and TV shows. Some appearances of electronic cigarettes in media will be shown below:
Focus, a movie with Rodrigo Santoro shown vaping
- Deadliest Catch, a reality TV show where they're used by most of the crew
2 Broke Girls, a comedy TV show
Drive Hard, movie
The Golden Globes — awards show where both Leonardo DiCaprio and Julia Louis-Dreyfus were seen vaping.
The Late Show — talk show, Katherine Heigl used an e-cigarette
Bad Neighbours -movie, Zac Efron vaped both in and outside the studio
True Detective, a crime TV show, e-cigarette is shown as a big part of Rachel McAdam's personality
Hard Out There, music video by Lilly Allen
The Tourist — movie, e-cigarette smoked by Johnny Depp
House of Cards — political TV show
Part
07
of seven
Part
07

E-Cigarette Market - Government regulations

OVERVIEW

Government agencies such as the FDA and the American Cancer Society have made declarations about e-cigarettes, and in 2016 the FDA ruled that e-cigarettes should be regulated the same way as normal tobacco products. These regulations are still in effect in 2018. In 2017, New York became the newest state to ban e-cigarettes in indoor public areas, which was met with public outcry from New York tavern owners. Manufacturers of e-cigarettes do not agree that their product should be regulated the same way as cigarettes, arguing that the two products are completely different. As for the public's reaction to e-cigarettes, no data from within the last 6 to 12 months is currently available, but our research team included a study done by Harvard in 2015 and a poll from 2016 to better determine what Americans think of e-cigarettes and whether the product should be regulated as strongly as normal cigarettes.

GOVERNMENT REGULATIONS AND DECLARATIONS

In August 2016, the FDA finalized a rule to regulate all tobacco products, including electronic nicotine delivery systems such as e-cigarettes. In the new ruling, they "deemed all tobacco products be subject to the Federal Food, Drug, and Cosmetic Act, as amended by the Family Smoking Prevention and Tobacco Control Act." With this ruling, the FDA extended their authorities in the FD&C Act to all products that meet the statutory definition of "tobacco products", which includes e-cigarettes.

The new regulations required that manufacturers of e-cigarettes comply with the requirements set out by the FDA, such as paying user fees, registering their establishment and submitting a list of their products, submitting health documents, and submitting ingredient documents. In 2018, e-cigarette manufacturers are still required by law to follow the FDA's tobacco regulations.

The FDA planned to further regulate e-cigarettes by banning many of the products from the market, but the agency then decided to delay the plan. The delay came as part of a broader plan to reduce tobacco-related deaths in the United States, which number 480,000 deaths a year. The agency claims their overall goal is to reduce the number of harmful materials within the products. This tobacco industry was "thrilled" by news of the delay.

The US Surgeon General released a report on e-cigarettes. In this report, the agency stated that besides nicotine, e-cigarettes could also contain potentially harmful ingredients, some of which include ultrafine particles, diacetyl which is a chemical that has been linked to serious lung-disease, volatile organic compounds, and heavy metals such as nickel, tin and lead.

The American Cancer Society released an updated statement saying that vaping was a safer alternative to smoking cigarettes but warned that the long-term effects were still unknown.

A few states have made attempts to limit the use of e-cigarettes. In April 2017, New York Governor Andrew Cuomo scrapped plans to ban vaping in indoor public areas. Then in October 2017, Cuomo signed a bill into law that would place the same restrictions on e-cigarettes that have already been placed on regular cigarettes. The bill would prohibit people from using e-cigarettes in indoor public areas in New York.

In a news release about the signing of the bill, the Governor stated that "These products are marketed as a healthier alternative to cigarettes but the reality is they also carry long-term risks to the health of users and those around them." By bringing these laws into effect, Cuomo hoped to create a stronger, healthier New York.

Other states that have banned vaping in indoor public areas include California, Connecticut, New Jersey, and Utah.

RESPONSE TO DECLARATIONS AND GOVERNMENT REGULATIONS

Individuals and organizations involved in manufacturing and selling e-cigarettes have had a negative response to increasing government regulation. Some manufacturers brought litigation against the FDA in response to the regulations imposed upon them. Nicopure Labs LLC filed a lawsuit against the FDA, saying that the FDA's new rule making actions violated the Administrative Procedure Act. After the FDA ruled that e-cigarettes needed to be better regulated, stores expected sales to drop due to these new regulations.

Michael Marlow, a professor of economics at California Polytechnic State University-San Luis Obispo, claimed that the American Cancer Society was beginning to realize that e-cigarettes could provide an easier way for smokers to quit. Meanwhile, Dr. Michael Siegel, MD, a professor of Community Health Sciences at Boston University, said lawmakers shouldn't treat cigarettes and e-cigarettes the same as they are ultimately different things.

New York tavern owners also had a negative response to New York Governor Andrew Cuomo signing a bill that would ban e-cigarettes in indoor public areas. In their response, they argued that e-cigarettes shouldn't be treated the same way as cigarettes.

Scott Wexler, Executive Director of the Empire State Restaurant & Tavern Association, stated that the ban would make it more difficult for taverns and restaurants to accommodate their smoking patrons. He also added that restaurants survived the banning of cigarettes, and would, therefore, survive the banning of e-cigarettes.

As banning continues, a number of false stories have attempted to stir up controversy and alarm among vapers. However, reports such as 11 states planning to ban vaping in vehicles have no truth to them.

A 2015 poll conducted by Stat and Harvard T.H. Chan School of Public Health showed that the majority of Americans thought that e-cigarettes were harmful. 47% of Americans didn't believe that e-cigarettes were an effective way to quit smoking, and 56% of adults thought that e-cigarettes would make teens more likely to smoke in the future. The study has not been updated since, but another poll in 2016 showed that 60% of Americans wanted e-cigarettes to be regulated like tobacco cigarettes while 19% said that e-cigarettes should be regulated, but not to the extent that regular cigarettes are, and 48% of Americans wanted e-cigarettes to be totally banned from public areas such as restaurants. There have been no new polls or studies done since then.

CONCLUSION

The US Surgeon General and the American Cancer Society have released reports on e-cigarettes. The US Surgeon General warned smokers that e-cigarettes could have harmful chemicals in them while the American Cancer Society conceded that vaping could potentially help smokers quit smoking. In 2017, New York banned e-cigarettes from indoor public areas, which resulted in public outcry from tavern owners. FDA regulation has been met with scorn from e-cigarette manufacturers, with many believing they are being treated unfairly.

Sources
Sources

From Part 03