R.J. Reynolds Vapor Co. isn’t taking an explicit “can’t-beat-them, join-them” approach in response to the meteoric rise of the Juul electronic cigarette, but it is preparing a nationwide launch in August 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, Ricardo Oberlander said Tuesday. Oberlander is a longtime BAT executive who took over as chief executive of Reynolds American Inc. in January.
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.
Electrictobacconist.com calls Alto “sure to be a crowd favorite because it combines stealth, ease of use and great flavors like its predecessors, Vibe and Ciro.”
British American Tobacco Plc, which took full ownership of Reynolds in July 2017, told investors in June that it considers Alto as a key element to its “vapor reimagined” promotional campaign, initially for the U.S. market.
It is likely BAT will take the Vuse versions global in the near future as part of expanding its worldwide top market share.
However, Reynolds Vapor and Alto have much work to take back U.S. market share from Juul.
Juul 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.
The growth comes despite increased scrutiny from the Food and Drug Administration and criticism from anti-tobacco advocates about anecdotal reports on youths using the product, including while they’re in school.
Juul’s market share was at 69 percent in the four-week period that ended June 16, compared with Vuse at 11.5 percent.
A year ago, Juul was at 35.7 percent and Vuse at 26 percent.
“Juul has achieved tremendous progress over the last 18 months,” Oberlander said.
Oberlander said he views Juul’s success as “showing the great potential for growth” in the second and third generations of e-cigs.
“We continue to develop Vuse for the U.S. market and continue to help it grow as successful and important in the vaping category,” Oberlander said.
Gregory Conley, president of American Vaping Association, said Juul’s “current status as a market leader in the category is in no way guaranteed.”
“Reynolds and other manufacturers of pre-filled pod products have a great opportunity to vigorously compete with Juul on price.
“Who will be on the top of the market in 2019 is anyone’s guess, but adult consumers will undoubtedly benefit from renewed competition in the market,” Conley said.
On July 13, Fontem Ventures, which makes the blu eCigs brand, introduced the Salt of the Earth product line from its partnership with Purilum LLC, which makes e-juice concentrates for vaping.
Salt of the Earth offers nicotine salt e-liquids with five flavors for refillable electronic cigarette pods.
The products mark Fontem’s entry into the refillable liquids market. Nicotine salts are made of the same exact nicotine that’s found in its natural state within the tobacco leaf.
On July 11, Juul Labs Inc. declared in a regulatory filing it has sold $650 million in securities from a $1.25 billion offering launch June 26. Juul is likely to use the net proceeds from the offering to expand its production and distribution.
In an October 2017 profile on cable business channel CNBC, Juul officials said the company has been struggling to match supply with surging consumer demand.
If Juul Labs is able to complete selling the $1.25 billion in securities, Bloomberg News estimates its overall value would approach $15 billion.
On April 22, the FDA expanded and tightened its oversight over Juul products, including taking steps to halt online sales to youths on eBay. Although the four steps announced by FDA Commissioner Scott Gottlieb in a new youth tobacco prevention plan apply to other e-cigs, the focus clearly was on Juul.
Two days later, Juul Labs agreed to take significant steps to address federal and state regulatory concerns, including “actively supporting” initiatives to raise the minimum age to at least 21 to purchase tobacco products.
On June 14, Juul altered its social media policy to “no longer feature models on Instagram, Twitter or Facebook ... but will feature former smokers who switched from combustible cigarettes to Juul.
Juul also said it would remove posts, pages and unauthorized offers to sell product targeted at underage users.