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The cigarette industry “e-nergized” by e-cigarettes

Bbc news – e-cigarettes ‘as effective’ as nicotine patches

Those predicting the downfall of the Cigarette Industry did not see this one coming. The $90 billion behemoth of Big Tobacco is piggybacking on the rapidly growing $1.5 billion e cigarette industry towards a new lease of life.

Ironically, developments like increased FDA scrutiny of e cigarettes are only confirming that e cigarettes are here to stay and “vaping” is not just a fad anymore, only restricted to celebrities showing off at the Golden Globes.

On Fire

Big Tobacco biggie Altria has set up a specialized subsidiary called Nu Mark to show how serious it is about e cigarettes. The company s MarkTen brand comes in two varieties, classic and menthol, and can be bought at around 5,000 stores in Indiana and Arizona to begin with. Altria Unlink is bringing its traditional marketing savvy to the fore, giving proprietary technologies nifty names like “FourDrawTM .”

There is no shortage of aces up their sleeve at , a Nevada based e cigarette brand. It is engaging customers through a rewards program one would normally associate with an airline or department store. Then there is the design, as the company points out, “Our innovative design has just two components to the e cigarette while most other brands have three, which makes those harder to operate.”

E cigarettes are also spawning their own sub culture. Vaping is so last year, this year the buzz is around “e cigarette hacking” as enthusiasts get together and customize their own modifications or “mods” to borrow a term from the video game industry. Geeky conversations at e cigarette parlors revolve around terms like “heat compression” and “propylene glycol.”This is further proof that e cigarettes are creating the same combustible chemistry as hit shows like Breaking Bad!

Except that e cigarettes are totally legit!

A Second Opinion

Along with a rise in popularity of e cigarettes has come an increase in scrutiny. The FDA is in the process of formulating detailed guidelines for such products. New York City, New Jersey, Utah, and North Dakota have banned e cigarettes in places where smoking is prohibited. While detractors of e cigarettes may gloat, being placed on an equal footing with the rest of Big Tobacco may prove a blessing in disguise in the long run, as regulations and standards are made clear and aligned across states.

Also, e cigarette players have shown that they are much more sensitive to individual and public health concerns, having learnt from the mistakes of Big Tobacco s decades of obduracy. The companies make it very clear in their communication that smokers need to be of legal smoking age, and they absolutely do not encourage pregnant women, and people suffering from heart disease, diabetes, and similar ailments, consuming their products.

Independent observers of the e cigarette phenomenon believe that just as the FDA has approved the sustained use of other nicotine containing products like gums, lozenges, and patches, they will take a considered view of the real impact of smoking e cigarettes, which even by the most conservative yardstick, are miles safer than regular cigarettes.

Politics too will come into it. While the current President may have famously kicked his habit, the nation is a far way off from achieving the goal of only 12% of adults being smokers by 2020 (the figure has stagnated at 18% for a while). A study in the highly respected medical journal Lancet raised the tantalizing prospect of e cigarettes having similar medical value as nicotine patches in the path to ending a smoking habit.

Market Mojo

Finally, it is the multitude of market moves happening in the e cigarette industry that are a pointer to how smokers should be ready for an e cigarette makeover.

Big Tobacco s Lorillard kicked it off by acquiring e cigarette brand Blu for $135 million in 2012, and then plonked $100 million down for UK based Skycig. RJ Reynolds owner of the iconic Camel brand, saw sales of the brand fall in 2013, even as it was busy introducing Vuse, the company s e cigarette brand in Colorado and Utah. The company, in a major departure from the competition also chose to produce the Vuse completely in the US, rather than have some components imported from China.

Big Tobacco hasn t been the only one maneuvering for advantage in this segment. E cigarette startups Victory and FIN merged and earlier European brand Vapestick had been acquired by Victory. With a combined revenue of $100 million the new entity can offer determined competition to Big Tobacco players muscling in on their turf. Rumors also abound that Altria may decide to acquire NJOY, the e cigarette maker as famous for its Superbowl ads as its products.

Clearly, e cigarettes can pack a punch where it really counts, and that s always the bottom line!