Electronic cigarettes have become an overnight sensation, with $2 billion in transactions, though that is a just tiny percentage of the entire smoking industry. These devices have also started a very fierce public health debate, some arguing ecigs, which vaping nicotine, offer a far less hazardous alternative to tobacco while others warn there is still insufficient proof on the product's health risks and whether they are convincing people to quit smoking.
The analog revolution - Tobacco brands starting vape companies
A subsidiary of tobacco giant ‘Reynolds American’, which is renowned for ‘Camel’ cigarettes, announced that it would start marketing its ‘Vuse’ electronic cigarettes nationwide. ‘NuMark’, a subsidiary of ‘Altria’, known for ‘Marlboro’ cigarettes, plans to follow by the end of 2014 with its brand ‘MarkTen’, as recent indicators show that ecigarettes are biting into sales of tobacco cigarettes. Both companies join Lorillard, which owns the nation's dominant e-cigarette brand, Blu eCigs.
Following Lorillard’s footsteps, Reynolds plans a national marketing campaign, including television advertisements in major markets. E-cig manufacturers say that move could promote an alternative to tobacco, but opponents warn it could glamorize smoking once again and lead people to using analog cigarettes. The FDA recently scheduled guidelines for regulating e-cigs but did not propose any constraints on marketing, drawing opposition from some public health groups. Marketing of tobacco cigarettes is heavily restricted, with TV ads forbidden.
Commercial interests vs public health?
In the absence of marketing regulation, ‘they will set the agenda,’ Matthew L. Myers, president of the Campaign for Tobacco-Free Kids said about the companies. ‘They will drive the evolution of the product in a way that serves their interests and not public health, and that's exactly what's happening.’
On the other hand, Stephanie Cordisco, the president of R.J. Reynolds Vapor Co., a subsidiary of Reynolds America, declared the company was trying a new approach angle with e-cigarettes, with an eye focused on public health. ‘I know the perception of who we are and what we stand for,’ Cordisco said, adding, ‘We're here to make sure we can put this industry on the right side of history.’ She continued: ‘We're trying to redefine tobacco enjoyment and give smokers an alternative, one that potentially reduces harm.’
Growing investments in the booming vape market
Lorillard spent $40 million last year marketing its Blu eCigs, mostly through TV ads. Robert Bannon, head of investor relations said the company planned to keep spending at about the same level in the near future. The ads have paid off, but only to an extent as sales of Blu hit $54 million in the fourth quarter of last year, but slipped to $51 million in the first quarter. Part of that might reflect changing consumer tastes, including the growing popularity of advanced personal vaporizers and mechanical mods, which present an alternative to model e-cigarettes.
Bonnie Herzog, a financial analyst at Wells Fargo who covers the big tobacco industry, and who projects growth for the e-cigarette market, said that the companies had big money to spend on marketing and that they had enormous influence over what kinds of products got carried in convenience stores.