Recent success of Vuse, an e-cigarette brand from Reynolds American Inc sparked vivid reaction of the Wall Street Journal‘s Mike Esterl. In his editorial titled Big Tobacco Begins its Takeover of the E-Cigarette Market, Mr. Esterl cites report of tobacco industry tracker, Management Science Associates. According to this report, shared with the public on the investor conference of Reynolds American Inc, in just four months Vuse is distributed in 1,800 retail outlets across Colorado, where the brand was launched.
Due to lack of restrictions on e-cigarette advertising Reynolds American Inc is able to run advertisements in TV, print and radio. ATL was long forgotten by Camel’s maker, so they used also direct marketing means using a national database of 12 millions smokers. This can be particularly efficient, as most of e-cigarettes users recruit from tobacco smokers. With 55.6% of retail share in Colorado, Vuse will be rolled out nation-wide in the U.S., starting first half of 2014.
Both no.1 (Altria) and No.3 (Lorillard) US tobacco players are also in the game. Altria, better known from its Marlboro brand is testing its own e-cigarette brand MarkTen, currently distributed in Indiana and Arizona. Lorillard, maker of the Newport cigarettes last year has acquired blu e-cigarette brand. Blu is currently national leader in e-cigarettes segment outselling other e-cigarettes producers (NJOY, Logic, Fin, Mistic) which are not connected to Big Tobacco.
Although Big Tobacco is late to the race of e-cigarettes it has clear advantage over other players. With existing relationship with tobacco users, wide distribution network and, last but not least, marketing budget, tobacco makers are poised to takeover this market soon.
