E-cigarettes: vaping craze transforms e-cig market

The e-cigarette category is not only one of the most controversial and talked-about categories in grocery right now, it’s also one of the fastest growing. Value sales have risen 43.4% to £122.7m in the past year; volume is up 49.5%.

But beneath the impressive growth there are seismic shifts going on in the market: as competition hots up, prices have fallen by an average of 4.1% over the past year; and as Brits become more familiar with the concept of vaping, their choice of device is changing.

In fact the very term ‘e-cig’ is becoming something of a misnomer as more and more consumers (along with some manufacturers such as Nicoventures; see below) switch from cigarette-like disposable products to more modular devices that vapers can top-up with their choice of e-liquid in a vast variety of flavours.

“The e-cig market is moving fast,” says Laraine Jones, buying director at CTN chain Rippleglen. “We’ve stopped stocking disposables, and sales of rechargeable cigarettes have slowed down dramatically; however, cartridges are still selling well. The growth is coming from vaping pens and liquids.”

That’s not to say e-cigs aren’t enjoying any of the growth. The leading brand in the grocery channel, 10 Motives, is up 50.1% on volumes up 42.3%, and Nielsen points to new entrants to the market, Vivid and Blu, as strong performers of the past year. Meanwhile number-two brand Nicolites has seen 5.9% wiped off its value by an average price fall of 8.2% (volumes are still up) as it’s sought to compete with the newcomers, particularly Blu, which sells for an average of 8.5% less.

Challenges lie ahead for grocers, however. “Grocery retailers may struggle to compete with the choice of devices and flavours available online and should ensure that they are offering a strong range that hits a variety of price points,” explains Natasha Kendall, UK liquor & tobacco lead analyst at Nielsen.

Displaying products in the right way is another challenge, adds Jones. “We’re looking to come up with a different display solution, which will allow us to sell a larger range to compete with the specialists.”

Regardless of where users chose to buy such products from, most expect demand for e-cigs to continue to grow for the foreseeable future, after rules governing ads were relaxed earlier this year to allow brands to show the actual product being used.

KiK E-Cigarettes was the first manufacturer to take advantage, says KiK chief executive Sandy Chadha: “The new advertising rules are a positive step to show people how vaping can help them move away from tobacco products.”

Or indeed other nicotine replacement therapies, sales of which have crashed 4.4% on volumes down 6.1% in the supermarkets.