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LIVINGSTON, N.J. –- Whether or not you believe electronic cigarettes will overtake traditional cigarettes in the next decade -- if not sooner -- there is no denying the category is on an explosive growth trajectory. While it may be a bumpy ride for some, e-cigarette market players need to start preparing now if they want to be at the finish line.
Logic Technology is one electronic cigarette company that is not sitting on the sidelines waiting to see what the future holds. The Livingston, N.J.-based company is taking steps to position itself as a leader in the relatively new category, and hiring Miguel Martin as its president is one such step.
Martin joined Logic two weeks ago. While he spent the past 18 months with a private equity firm working with high-growth companies, a more notable highlight on his resume is the 18 years he spent at The Altria Group Inc. Recruited out of the University of Vermont, Martin worked his way up the ladder at Altria's Philip Morris USA (PM USA), holding just about every position in the sales department. He finished his career at PM USA as senior vice president and general manager in charge of sales and distribution where he was responsible for PM USA, U.S. Smokeless Tobacco and John Middleton products.
It is this combination of experience with the private equity firm and at the Richmond, Va.-based tobacco giant that drew Martin to Logic. "Philosophically, the company matched up with exactly what I wanted to do, which was work with my friends in the wholesale and retail community in a high-growth area that has very friendly margins," he told CSNews Online.
Martin cited three primary reasons he was attracted to Logic: the opportunity to work in the retail and wholesale space again; the incredible growth of the e-cigarettes category; and the company itself. Specifically, he cited Logic's ownership, its focus on product quality and its customer-first attitude -- whether that is the retailer, wholesaler or consumer.
When asked about e-cigarette consumption leaving traditional cigarettes in the dust within the next 10 years, Martin turned to the sales figures.
"I think the $10-billion mark in next three to five years is probably very well within reach," he said. "I would equate it to the shot segment of the energy drink market. If you have a really good product with high trade margins that the consumer finds attractive, the sky's the limit. The trade moves pretty quickly toward products like that. Whether the number is $10 billion or $20 billion, it is hard to say, but I know it will be incredibly explosive growth."
With more than 200 e-cigarette brands in the marketplace, though, the industry will take on a survival-of-the-fittest attitude. According to Martin, Logic will come out as one of the survivors. "The current success of the [Logic] product has demonstrated that it can not only get in stores, but stay in stores. It is encouraging when you see market share grow steadily," he explained.
He also pointed to Logic's commitment to positive trade relationships, as well as its focus on the product, and responsible manufacturing and marketing.
The company is positioned to meet any regulations that come down the pike, too. That is going to be the biggest challenge for a lot of these other companies, Martin stated.
"Can you quickly transition to a regulated environment? I come from that world and that is one of the advantages we will have,” he said. "Do you have the financial wherewithal to be ready for all the reporting and manufacturing practices that will be required? Is your brand strong enough to be able to handle marketing restrictions, if that comes to pass? I think we are and so are some others. But for a lot of brands, I think they are going to struggle with that -- whether it is the lack of experience in that space, the lack of financial backing or the lack of diligence on the manufacturing side."