The market-share gap continues to shrink between top-selling electronic cigarette Juul and No. 2 Vuse of R.J. Reynolds Vapor Co. in the latest Nielsen analysis of convenience store data.
The report covers the four-week period ending Sept. 25.
Nielsen determined Vuse had a 33.3% market share, up from 31.2% in the previous report.
Meanwhile, Juul was at 41%, down from 41.1% in the previous report.
NJoy was at 3.3%, down from 3.7%, while Fontem Ventures’ blu eCigs was unchanged at 2.5%.
Overall, sales of electronic cigarettes were up 1.3% year over year for the latest four-week period.
Overall e-cigarette sales-volume growth have been on the decline since Nielsen’s Aug. 10, 2019, report, when it was up 60.2% year over year.
Electronic-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.
Top-selling Juul’s four-week dollar sales have dropped from a 50.2% increase in the Aug. 10, 2019, report to a 12.4% drop in the latest report.
By comparison, Reynolds’ Vuse was up 58.6% in the latest report, while No. 3 NJoy was down 21.1% and No. 4 blu eCigs down 20.3%.
Goldman Sachs analyst Bonnie Herzog has said that NJoy “refutes Nielsen’s data and methodology.”
What happens to the rate of substitution between traditional cigarettes and vaping will soon be shaped by FDA decisions on vaping products.
Electronic-cigarette manufacturers had to submit by Sept. 9, 2020, their premarket tobacco market applications in order to stay in the marketplace for at least another 12 months.
The FDA did not meet a federal court-ordered deadline of Sept. 9, 2021, to decide whether to grant those applications for e-cigarettes. Anti-tobacco and public-health advocacy groups are strongly urging the FDA to ban all non-tobacco e-cigarette flavors.
The agency already has announced rejecting applications from hundreds of small e-cigarette producers, but not for the top manufacturers.
The FDA said Sept. 9 it “will continue to make enforcement decisions on a case-by-case basis according to our enforcement priorities and individual circumstances, recognizing that we are unable, as a practical matter, to take enforcement action against every illegally marketed tobacco product, and that we need to make the best use of agency resources.”
Reynolds American Inc. said on Sept. 9 that “we remain confident in the quality of our applications, which are supported by scientific evidence that our Vuse and Velo products are appropriate for the protection of the public health. In addition, we believe that these categories of important, innovative products may be potentially less harmful than traditional tobacco products.”
Anti-tobacco and public-health advocacy groups are strongly urging the FDA to ban all non-tobacco e-cigarette flavors.
Barclays analyst Jain Gaurav wrote in an investor’s note published Oct. 1 that the significant reduction in e-cigarette use so far during the COVID-19 pandemic could play an influential role in how much the FDA opts to further tighten regulations on the product sector.
The FDA and federal Centers for Disease Control and Prevention officially released Oct. 1 the 2021 National Youth Tobacco Survey, which had a major focus on electronic cigarette usage. Current e-cig use among high school students dropped from 20% in 2020 to 11% in 2021 — the rate it was at in 2017.
Gaurav said that with the survey results released, “we would expect the FDA to soon start ruling on the premarket tobacco applications (PMTA) of the major manufacturers” that includes Juul Labs Inc., R.J. Reynolds Vapor Co., NJoy and blu eCigs.
Gaurav said there is an 80% probability the FDA will approve PMTA applications for Juul, Vuse and blu eCigs tobacco-flavored products, while the odds shrink to 50-50 for their menthol products, and “highly unlikely for their flavored e-cigs, if they have filed for those” products.
Industry analysts said the 9.9% volume decline year over year for traditional cigarettes reflects the impact on the industry of the COVID-19 pandemic and the later economic reopening.
A key 2020 industry development was smokers’ increasing their purchases in the early months of the pandemic in response to statewide stay-at-home orders, including in North Carolina.
This year has seen a return to more typical shopping conditions.
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.
“Cigarette manufacturers are pricing stronger and more frequently,” Goldman Sachs analyst Bonnie Herzog said.
However, another industry analyst said the price increases likely led to decreased sales.
“The rapid rise in manufacturer prices and a resumption in growth in vaping seem to account for much of the current declines in cigarette sales,” said David Sweanor, an adjunct law professor at the University of Ottawa and the author of several e-cigarette and health studies.
Philip Morris USA traditional cigarette volumes were down 2.9% year over year, while Reynolds had an overall 2.2% decrease and ITG Brands LLC was down 21%.
As of Sept. 25, Philip Morris’ top market share was at 52.1%, with top-selling Marlboro representing 46.1% of overall market share.
R.J. Reynolds Tobacco Co. was at 34.7%, with No. 2 Newport at 14.2%, No. 3 Camel at 8.5%, No. 4 Pall Mall at 5.3% and No. 5 Natural American Spirit at 4%.
ITG was at 7.4%, although ITG has said its market share is closer to 10%.