Juul continued to expand its dominance over the U.S. electronic-cigarette sector over the past month even as it faces ever-increasing scrutiny from federal and state regulators and anti-tobacco advocates.
Wells Fargo Securities analyst Bonnie Herzog issued her latest report Wednesday, based primarily on Nielsen data.
Juul’s market share increased from 72.8 percent to 74.5 percent during the four-week period that ended Oct. 6.
Meanwhile, market share of Vuse by R.J. Reynolds Vapor Co. rose slightly from 9.5 percent to 9.6 percent even as sales volume declined 10 percent.
Juul, made by Juul Labs Inc. of San Francisco, entered the mainstream retail marketplace in 2015, and is sold in the form of a pen or a USB device. That design makes it easy to hide its usage.
A year ago, Juul was at 59.3 percent market share, Vuse at 17.1 percent, MarkTen XL of NuMark was third at 8.7 percent, blu eCigs of Fontem Ventures was fourth at 6.5 percent and Logic of Japan Tobacco was fifth at 3.9 percent.
By comparison, for the most recent period, MarkTen is at 5.6 percent, blu eCigs at 3.3 percent and Logic at 2.6 percent.
Herzog said that e-cigs are projected to reach her estimate of $6.6 billion in retail sales for 2018.
“We expect this reduced-risk product category growth will continue to accelerate as technology evolves and new products come to market,” Herzog said.
When including heat-not-burn traditional cigarettes, Herzog said “we expect more and more consumers to convert to next-generation reduced-risk platforms.”
The Juul growth comes despite increased scrutiny from the Food and Drug Administration and the N.C. Attorney General’s Office, as well as criticism from anti-tobacco advocates about anecdotal reports of youths using the product, including while they’re in school.
On Sept. 12, the FDA announced it would consider banning the sale of flavored e-cigs if manufacturers can’t prove they are doing enough to limit youth consumption of the products.
The FDA is requiring manufacturers of the top-five products to submit within 60 days “robust” plans on their efforts. If the agency does not find the plans to be “compelling,” it could pull flavored e-cigs out of the marketplace.
On July 17, Reynolds said it is preparing a nationwide launch of its version of a “pod mod” similar to the Juul vaping delivery mechanism. The goal is to have Vuse Alto in national distribution by November.
Sneak peeks of Vuse Alto show it being offered at retail in a mixed pack containing one flavoring pod each of original, rich tobacco, menthol and mixed berry.
In the traditional cigarette category, Herzog said industry volume declined by 5.3 percent despite recent price increases by Philip Morris USA, Reynolds and ITG Brands LLC.
Philip Morris USA was first at 55.1 percent market share, of which 48 percent is top-selling Marlboro.
Reynolds remained at 33.8 percent market share, led by 12.7 percent from Newport, 9.1 percent Camel, 6.5 percent Pall Mall and 3.4 percent Natural American Spirit.
ITG was at 7.2 percent, representing 2 percent from Winston and 1.6 percent each from Kool and Maverick.