The market-share gap between the top-selling U.S. electronic cigarettes remained at a status-quo stage with top-selling Juul holding about a 4.8-percentage point gap over R.J. Reynolds Vapor Co.’s Vuse.
The latest Nielsen analysis of convenience store data, covering the four-week period ending Jan. 15, determined Juul was at 38.1% market share and Vuse at 33.3%.
There has been a 4- to 4.8-percentage point gap between the two e-cigarettes for the last five Nielsen reports.
NJoy was at 3.1%, up from 2.9% in the previous report, while Fontem Ventures’ blu eCigs was unchanged at 2.3%.
E-cigarette sales overall have slumped since February 2020, when the Food and Drug Administration implemented its latest round of heightened regulations on the products.
Those restrictions foremost required manufacturers of cartridge-based e-cigarettes, such as Juul Labs Inc., Reynolds Vapor, NJoy and Fontem, to stop making, distributing and selling “unauthorized flavorings” in February 2021, or risk enforcement actions.
Goldman Sachs analyst Bonnie Herzog said another factor in the slump is “the impact of e-cigarette market denial orders by the FDA as it continues to work through premarket tobacco applications.”
Herzog said the premarket tobacco application process “continues to weigh on e-cigarette trends.”
Juul’s four-week dollar sales have dropped from a 50.2% increase in the Aug. 10, 2019, report to a 7.8% decline in the latest report.
By comparison, Reynolds’ Vuse was up 35.4% in the latest report, while No. 3 NJoy was down 22.8% and No. 4 blu eCigs down 14.5%.
Herzog has said that NJoy “refutes Nielsen’s data and methodology.”
Traditional cigarettes
Industry analysts said the 10.1% volume decline year over year for traditional cigarettes primarily reflects a gradual trend of employers back to the work office, as well as the return to more typical shopping conditions.
A key 2020 industry development was smokers’ increasing their purchases in the early months of the COVID-19 pandemic in response to statewide stay-at-home orders, including in North Carolina.
Manufacturers have been able to offset some of the recent volume declines through a series of per-pack list-price increases in recent months.
The list price is what wholesalers pay manufacturers for their traditional cigarette products. The increase typically is passed on to customers at retail.
For example, R.J. Reynolds Tobacco Co. implemented a 14-cent Reynolds list-price increase that began in January.
Counting a 13-cent per-pack increase on Jan. 28, 2021, 14-cent per pack hikes in April and July and a 15-cent increase in October, Reynolds will have raised its list price by 70 cents within a year for many of its top brands.
Altria Group Inc. matched the 14-cent Reynolds increase for most of its main brands, Herzog said.
Philip Morris USA’s traditional cigarette dollar sales were down 2.2% year over year, while Reynolds was up 0.2% and ITG Brands LLC was up 1.1%.
As of Jan. 15, Philip Morris’ top market share was at 51.8%, with top-selling Marlboro representing 45.8% of overall market share.
R.J. Reynolds Tobacco Co. was at 34.5%, with No. 2 Newport at 13.9%, No. 3 Camel at 8.5%, No. 4 Pall Mall at 5.3% and No. 5 Natural American Spirit at 3.9%.
ITG was at 7.7%, although ITG has said its market share is closer to 10%. Its Winston brand is No. 6 at 2%.
“The large manufacturer price increases, led by BAT, continue to have a meaningful impact in reducing overall sales despite the selective discounting in the market,” said David Sweanor, an adjunct law professor at the University of Ottawa and the author of several e-cigarette and health studies.
“This very aggressive pricing continues to be a hugely profitable strategy.”
Richard Craver – Journal Now – 2022-01-26.
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