Big tobacco banks on e-cigs

BIZMOLOGY While today’s e cigarette market represents a mere $1.2 billion of the estimated $100 billion tobacco industry, Big Tobacco is banking on the niche market to become big business.

The top tobacco companies are busy buying up makers of e cigs to grow this minimarket to as much as $10 billion within the next decade to offset sales declines among its traditional tobacco products.

This month Altria Group’s product development subsidiary Nu Mark acquired Miami startup Green Smoke for $110 million to pair with its MarkTen product, launched in late 2013. Altria’s also partnering with Philip Morris International to market and distribute e cigs and its other smokeless items (think snus) globally.

Menthol cigarette giant Lorillard earned early access to the e cigarette niche by buying North Carolina’s blu ecigs in 2012 and, later, Britain’s SKYCIG as 2013 was wrapping up. The strategic moves have given Lorillard more than a third of the market by units sold and a nearly 45% share by dollar.

In the ripe Colorado market, Reynolds American rolled out its Vuse Brand e cig in mid 2013 and quickly secured a more than 60% share. The company extended Vuse’s reach to neighboring Utah in January 2014 with an eye toward aggressive expansion nationwide. The tobacco producer’s portfolio includes top selling cigarette brands Camel, Doral, Kool, Salem, Pall Mall, and Winston as well as Camel smoke free tobacco and Grizzly and Kodiak moist snuff. It has also owned nicotine gum Niconovum since 2009.

These tobacco titans look to roll out safer alternatives to its tobacco products as sales of premium smokes slip. Altria’s flagship Marlboro brand cigarettes posted nearly 6% volume declines in Q4 2013 while sales of its premium cigarettes dropped 11%. Chewing tobacco was down more than 4% as well.

Tobacco companies face hurdles, though, in the e cig market with image and acceptance. Altria prefers to call its e cigs «e vapor products.» The vapor contains between nine and 450 times lower levels of toxicants than cigarette smoke. This fact has spurred some consumers to trade their typical tobacco products for these newer digital vaping versions. The safer smoking alternative is also enticing a younger more lucrative, long term target audience to give vaping a try. Still, even hip restaurants on South Congress, where I sourced this post’s accompanying photo, aren’t giving in to the e cig push just yet.

‘sexual’ vip e-cigarette advert banned before 11pm by advertising standards authority (pictures, video)

Two television adverts for an electronic cigarette brand have been banned before 11pm following 1,156 complaints that they were overly sexual and exploited women.

The ads for VIP e cigarettes, which carried a post 9pm restriction and also appeared on the advertiser’s YouTube channel, drew complaints that dialogue between a man and woman contained references to oral sex.

A number of complainants said they understood an accompanying female voice over saying «If you’re gonna vape, vape with VIP» was «wordplay on the term rape».

438 Marketing Ltd, responding on behalf of Must Have Ltd trading as VIP Electronic Cigarettes, said it did not believe the ads were overly sexual.

It said the use of a double entendre portrayed a «sexual situation» only to reveal that the scene was not what viewers expected, and acknowledged that the ads were suggestive but said they were intended for adults aged 25 and over.

VIP said it understood the term «vape» referred to the action of inhaling vapour from e cigarettes.

YouTube said that while it was the advertiser’s responsibility to ensure that any advert complied with regulations, the adverts in question violated their guidelines and had been removed.

The Advertising Standards Authority (ASA) acknowledged the complainants’ concerns that the presentation of the ads included implied references to oral sex but noted that they contained no explicit sexual imagery and concluded by revealing that the commentary related to an e cigarette.

It also found that the ads were not likely to be viewed as sexist, degrading or exploiting women and therefore concluded that they were unlikely to cause serious or widespread offence on this point.

But it added «We considered the sexually provocative presentation of the male and female characters in conjunction with a graphic description of oral sex was likely to cause serious and widespread offence to viewers who viewed (the television) ads during normal evening viewing.

«We acknowledged the post 9pm timing restriction would reduce the risk of younger children seeing (the television) ads, but because of the references to oral sex, we considered a post 9pm timing restriction was not sufficient to avoid offending viewers and that a post 11pm timing restriction should have been applied.

«On that basis, we concluded that (the television) ads breached the code.»

It said consumers needed to locate the YouTube ads on the advertiser’s YouTube channel, so were not likely to cause serious and widespread offence to those viewers.

It agreed that the term «vape» related to the use of e cigarettes and did not equate to wordplay on the word rape, therefore finding that the term was unlikely to cause serious or widespread offence.

The ASA ruled that the television ads must not be broadcast again before 11pm, adding «We told VIP Electronic

Cigarettes to ensure ads were not likely to cause serious or widespread offence in future and to ensure that they were appropriately scheduled.»


4 комментария to “Big tobacco banks on e-cigs”

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