Vaping & tobacco 2023: Controversy can’t prevent ElfBar boom

The overfilling scandal failed to make a dent in ElfBar, which has retained the title of the UK’s bestselling vaping brand. It leads a category that has more than doubled in value to comfortably smash the £1bn barrier. Volumes have also doubled; an additional 155.2 million units went through tills.

ElfBar’s sister brand Lost Mary is flying, too. Its £310.7m gain is the biggest in this year’s Top Products, fuelled by the sale of 53.1 million extra packs in its first full year.

The continued growth of ElfBar and Lost Mary has come despite their devices being found to contain 50% more than the legal limit of liquid nicotine in independent testing.

The controversy led to devices being investigated and pulled from shelves by Tesco, Morrisons, Asda and Sainsbury’s in February.

That it had little impact on sales is “a paradox”, says ElfBar global communications chief Jacques Xiang Li.

Whether the brands can get bigger still is a matter of debate, Xiang Li says. “Yes because there are smokers who want to quit, and no because the competition is so fierce.”

Government seeks to limit disposable vapes

Right now, there’s no fiercer competitor than SKE, the UK arm of Chinese vape giant Shenzhen SKE Technology Co. Its Crystal Bar brand has earned £203m from a standing start to be the UK’s third-biggest vape.

Ambitious players like these will no doubt be watching Downing Street closely. In May, Rishi Sunak told daytime TV he didn’t want his daughters “seduced by these things”.

The government is now working to rein in the disposable vapes category, and a consultation on more restrictive regulations is open.

Even if it doesn’t ban disposables completely – a policy that is still on the table – the category is likely to face tough clampdowns on flavour descriptors, packaging and in-store displays.

Some suppliers have already got ahead of the likely changes. Take Supreme, which in October put its 88Vape disposable devices in plain packaging, discontinued the use of bright colours, and made its variant names “age appropriate”.

Plans to reduce vape use are varied

“Media headlines, of course, are a challenge for the whole industry,” it says. “Supreme is in stronger position compared to other leading names in the industry because 88Vape has a loyal, older demographic and long-standing customer base, which has ensured the core business has remained solid.”

The discounter-focused brand – up 38.4% in value thanks to supermarket listings –   stresses its commitment to “not create any interest from underage vapers”. As such, it expects to weather any regulatory restrictions that come its way.

However, disposable vapes aren’t the only nicotine products the government is looking to limit. In October, it announced plans to create a “smoke-free generation”.

The plans involve raising the legal age for buying cigarettes and cigars in England by one year every year.

It comes amid an already tough environment for tobacco, sales of which are down £841.1m. No category has lost more. Rolling tobacco is the second-biggest loser of the year: it’s lost £393.1m.

And yet, there is still some life left in the value-end of the tobacco market, believes Gemma Bateson, sales director at JTI UK.

“With existing adult smokers increasingly influenced by price and looking for products that offer premium quality at an ultra-value or value price point, we have continued to innovate our value product offering, launching new products to meet demand and help retailers to drive sales,” she says.

In the autumn, JTI launched “ultra-value” Mayfair Gold ciggies, which joined the supplier’s Silver variant. Several other brands have been “repositioned” to “align with our ultra-value offering”, Bateson says.

Cigarette brand owners prepared for further volume declines 

That strategy has certainly worked for Imperial Brands’ Richmond cigarettes, which are 6.9% cheaper per pack than the category average. It’s the only top 10 brand in volume growth – up 30.4%.

Smaller names, including Embassy and Regal, have also added units.

But despite such upticks, Rothmans and Pall Mall owner BAT expects overall volumes to continue to dive. Hence its focus on nicotine replacement products – chiefly its oral nicotine pouch brand Velo, which “offers a hands-free, on-the-go experience” of up to half an hour. “While this category is still relatively new in the UK, there is significant potential for growth,” BAT says.

“The primary challenge for Velo lies in raising awareness and understanding among adult smokers and nicotine users. Addressing this requires consumer education on how nicotine pouches are used and what occasions they are best suited to satisfy.”

Some consumers are already wise to the benefits of Velo: it has more than doubled in value over the past year to be worth £34.7m. Its pouch rival Nordic Spirit also grew value, by 54.3%. They sold 4.5 million more packs between them.

Such growth suggests the future of the wider market could indeed be smoke-free.