Traditional Cigarettes Being Crushed by Vaping in Tobacco Industry
What started with a device many thought would fade out as a fad is now a booming industry bringing in billions of dollars every year. That industry is e-cigarettes, or the use of an electronic device to heat e-liquid to form a vapor. The e-cigarette market contains various categories based on the type of device used. Disposable e-cigarettes are the least popular while modular e-cigarettes, more commonly known as vaping devices, rank as the consumers’ favorite.
E-Cigarette Industry by the Numbers
The demand for quality vaping products continues to rise, with the industry expected to reach $44.5 billion by the year 2024. Numbers from Stastica outline e-cigarette sales across the U.S. starting in 2014, with general estimates from 2017 and the forecast for 2018:
- $1.5 billion in 2014
- $1.9 billion in 2015
- $2.4 billion in 2016
- $2.9 billion in 2017
- $3.6 billion in 2018
Leading producers of e-cigarettes in the U.S. include Fontem U.S., Logic, and Reynolds American Inc. An annual report that covered 2015 showed Reynolds American at the forefront of the e-cigarette market share, dominating 38.5 percent of sales.
Factors Driving Growth
Vaping continues to gain ground for a number of reasons, with health and cost at the top of the list. As people are choosing healthier lifestyle options, combustible cigarettes are no longer a feasible option.
Consumers are becoming more aware of the full extent of the hazards of traditional cigarettes while becoming better educated on the decreased health risks of vaping. Certain e-juice companies, such as Black Note, are taking the health benefits even further by flavoring products with natural rather than artificial ingredients. Black Note uses real tobacco extract instead of synthetic additives.
Cost is a factor, as vaping present a significantly less expensive alternative to cigarettes. This is becoming more important as cigarette taxes continue to soar.
Increased awareness of vaping’s impact on the environment is also contributing to the surge in popularity, aligning with the growing concern about the state of the planet. Not only does vaping eliminate cigarette butt litter, but it produces no smoke and no ash.
Availability and options are additional reasons the industry continues to grow. Smoking is banned in most places, and traditional cigarettes are even getting harder to buy. Some grocery stores are choosing to no longer list them, while online purchasing is not typically a legal option.
At the same time, the number of vape shops and designated stores carrying e-cigarette and vaping products are increasing. Online purchasing options are another way the products are easily and readily available. Technological advances, a huge selection of flavors, and customized devices add to the popularity.
Product innovation, improved device technology, health factors, cost issues, and the fact that vaping is more socially acceptable and environmentally friendly than traditional cigarettes help ensure vaping’s place in the future. The landscape is primed for the e-cigarette industry to continue its growth, proving billions of time over it’s much more than a passing fad.
SOURCES:
http://www.smallcapfinancialwire.com/wp-content/uploads/2013/11/E-Cigs-Revolutionizing-the-Tobacco-Industry-Interactive-Model.pdf
https://www.wsj.com/articles/philip-morris-reorganizes-as-it-shifts-focus-to-smoke-free-products-1506609556
https://www.statista.com/statistics/285143/us-e-cigarettes-dollar-sales/
https://www.statista.com/topics/1913/electronic-cigarettes-e-cigarettes/
https://www.cnbc.com/2017/12/28/pr-newswire-the-global-e-cigarette-market-is-set-to-reach-usd-44-point-55-billion-by-2024.html
https://bisresearch.com/industry-report/electronic-cigarette-market-size-forecast.html