The U.S. electronic cigarette marketplace appears in a stagnant phase as illicit products continue to take sales from the top manufacturers.
Overall e-cigarette volumes were down 14.1% year over year, according to the latest Nielsen convenience store report released Tuesday that covers the four-week period ending March 23. Those volumes were down 13.9% in the previous report.
However, Zyn remains the top-selling U.S. oral nicotine product, which is sold by Philip Morris International subsidiary Swedish Match.
The report largely covers the big chains. For smaller chains, the group extrapolates trends, which is why changes don’t appear immediately in the report.
Goldman Sachs analyst Bonnie Herzog said that “in terms of specific company trends, total nicotine sales declines eased across the board for Altria, British American Tobacco and ITG, very modestly for Juul and accelerated for Swedish Match.”
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Zyn’s meteoric sales jump is about 80% year-over-year and total annual sales are now in the $2 billion range.
“Along with the huge sales of vaping products that have been skirting around the FDA’s efforts at bans, Zyn is a major threat to cigarette sales, which continue to decline steeply,” said David Sweanor, an adjunct law professor at the University of Ottawa and the author of several e-cigarette and health studies.
“The huge and growing consumer demand for Zyn also makes it a harder target for politicians. They might like to push a moral panic agenda on nicotine among their supporters, but risk alienating a large and vocal group of voters who prefer Zyn in place of lethal cigarettes.”
Meanwhile, the market share of R.J. Reynolds Vapor Co.’s top-selling Vuse electronic cigarette slipped in the latest report, while Altria Group Inc. continues to struggle to gain traction with its NJoy acquisition.
Vuse’s market share slide went from 42.2% to 41.6% while No. 2 Juul declined from 24.2% to 23.8%.
As recently as May 2019, Juul held a 74.6% share in the U.S. e-cigarette market. That’s when a series of regulatory actions contributed to product-reduction concessions and lower consumer demand.
Last June, Altria paid $2.75 billion for full ownership of No. 3 U.S. e-cigarette NJoy. Altria cleared the way for the NJoy purchase in March 2023 by exiting its minority stake in Juul while acquiring global licensing rights.
As of the latest Nielsen report, NJoy has a 3.2% market share, unchanged from the previous report.
Fontem Ventures’ blu eCigs, an affiliate of Imperial Brands Plc, went from 1.1% to 1%.
Both British American Tobacco Plc and Altria are prodding the Food and Drug Administration for heightened enforcement on “illicit” synthetic nicotine electronic cigarettes in the U.S. vaping market. The companies have estimated those synthetic products represent about half of the overall domestic e-cigarette market.
A December letter from the U.S. House Select committee to the FDA and U.S. Justice Department to urged the agencies to work with U.S. Customs and Border Protection officials “to address this urgent problem with all due speed.”
To that end, on Dec. 14, the agencies announced that about 1.4 million units of unauthorized e-cigarette products were seized during a cargo examination site at Los Angeles International Airport. Among those was Elf Bar, which, according to the 2023 National Youth Tobacco Survey, is the most commonly-used brand among young e-cigarette users.
The estimated retail value of the seized products totaled more than $18 million.
Meanwhile, traditional cigarette volumes were down 5.5% year over year in the latest report: Philip Morris USA (down 6.1%), R.J. Reynolds Tobacco Co. (down 7%) and ITG Brands LLC down (3.3%).
Philip Morris’ top market share was unchanged at 50.7% in the latest Nielsen report, with top-selling Marlboro representing 45.8% of overall market share.
Meanwhile, Reynolds was up from 32.9% to 33% with No. 2 Newport at 12.8% and followed by Camel (7.7%), Natural American Tobacco (3.6%) and Pall Mall (3.6%).
ITG was at 8.5% overall. Its No. 7 Winston brand remained at 2%, while Kool was No. 8 (1.8%) and Maverick at No. 9 at (1.7%).