Vapors, Tanks Growing at the Expense of E-Cigarettes | ConvenienceStoreNews
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    Vapors, Tanks Growing at the Expense of E-Cigarettes

    E-Vapor Device

    NEW YORK CITY -- The vapor/tank category continues to grow and Big Tobacco "has no choice but to enter this category either organically or via acquisition," according to a Wells Fargo Securities LLC report released today.

    The report, entitled Tobacco Talk: Vapors/Tanks Driving Next Wave of E-Vapor Growth, added that the U.S. retail e-vapor market has reached $2.2 billion, and consumers are increasingly moving to vapors/tanks, leading to sales growth deceleration in electronic cigarettes.

    Vapor/tank users are also overwhelmingly more committed to vaping vs. e-cigarette consumers and are more likely to "dual use," meaning they vape in addition to smoking combustible cigarettes, according to the report written by a group of experts including Wells Fargo Senior Analyst Bonnie Herzog.  

    "Bottom line: Given lower spend per consumer for vapors/tanks and greater potential for these products to become commoditized, we're concerned the long-term revenue pool for the e-vapor category could contract, assuming the shift to vapors/tanks continues," the report stated.

    There is one factor that could definitely get in the way of vapor/tank growth, however. Wells Fargo believes the U.S. Food and Drug Administration (FDA) could be more stringent for vapors/tanks relative to e-cigarettes. The FDA has yet to publish any proposed regulations for the e-vapor category.

    "Given the estimated 5,000 (and growing) U.S. vape shops and hundreds of online purveyors of e-vapor products, we wonder how (if at all) the FDA will consider the potential impact on jobs if online sales and/or vape shops were banned or severely restricted," the report concluded.

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