The electronic cigarette or e-cig market is about to explode. Over the next few weeks, Reynolds American
) is rolling out its in-house e-cig brand, VUSE, across the nation in Big Tobacco’s latest drive to dominate the market.
The war for a share of the $2.5 billion e-cig market is getting hotter. Tobacco companies are rushing to get their products to market and make a quick buck before regulators or public health groups have the devices banned . As of yet there is much talk but no action with regard to banning the devices.
In this article, I will discuss some of the business highlights of Vapor Corp.
(OTC:VPCOD), a leading supplier of electronic cigarettes or “e-cigs” with a diverse product portfolio that includes the most recognized brands by both retailers and consumers in the industry. I will briefly discuss recent quarterly performance, a promising conference presentation, and then the impact of the just announced reverse split
of shares. Thus far, Vapor Corp. is the only fully reporting publicly traded e-cig company in the U.S. Vapor’s leading brands include Krave, Fifty-One, Green Puffer, Americig, and Vapor-X, among others. Vapor Corp’s products are available online, on television and at retail locations across all levels/channels of retail throughout the United States.-
) , Reynolds American
) , Imperial Tobacco, British American Tobacco
, and Altria
all have e-cig brands in development. In addition, Vapor
) (the only fully reporting publicly traded electronic-cigarette company within the U.S.) and privately held NJOY are the largest pure-plays in the sector.
With so many competitors in such a relatively small but rapidly growing market, it is highly likely that price wars will soon start to ripple across the market. Rising competition means smaller margins, which will inevitably push some smaller competitors out of the market.
throws a party tomorrow
at the stylish Jane Hotel in New York’s West Village to pitch its latest smokeless electronic cigarette, the company will also send a reminder to traditional tobacco makers: the innovation of e-cigs is igniting growth.
The closely held company is introducing NJOY King nationally this week, with television and print advertising saying, “Cigarettes, you’ve met your match.” The goal is to make cigarettes obselete, “replacing them as they are currently designed,” said Executive Vice President Roy Anise.
The market for e-cigs — nicotine-infused, battery-heated tubes that create vapor instead of smoke — may rise to $1 billion in the next three years from $300 million in 2012, said Bonnie Herzog, an analyst at Wells Fargo & Co. Altria Group Inc. (MO)
, the maker of Marlboro cigarettes, may buy NJOY or another company, following the lead of rival Lorillard Inc. (LO)
Blu Ecigs in April for $135 million, Herzog said.
“It is truly a wakeup call for Big Tobacco,” Herzog said this week by telephone from New York. “If manufacturers can create something that tastes, looks, feels and smokes like a traditional cigarette with substantially less risk or harm, more consumers are going to try them and retailers are going to give them more shelf space.”
A single NJOY King sells for $7.99 and lasts as long as two packs of cigarettes, the company said. It is the same length and diameter as a traditional cigarette and has a spongy filter unlike its predecessor, which was made of steel and introduced by the company less than a year ago. Such improvements have led Herzog to predict that U.S. consumption of e-cigs may surpass demand for regular cigarettes over the next decade.
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