AWMA Expo: E-Cigarette Waiting Game


LAS VEGAS -- No one has a crystal ball when it comes to the future of electronic cigarettes and asking questions mostly gives rise to new questions, not answers. However, there is no disputing that the category continues to grow.

"Hindsight is 20/20. The road ahead is blurry, but you can see clearly what happened in the past. 2013 was another year with exceptional growth," said David Bishop, managing partner at Barrington, Ill.-based sales and marketing firm Balvor LLC.

Speaking at the AWMA Marketplace & Solutions Expo last week, Bishop joined Judy Hong, managing director at Goldman, Sachs & Co., in presenting a seminar entitled "E-Cigs: Where Do They Stand?" The seminar was held at the AWMA Solutions Café and Theater, a new feature at this year's show.

Hong agreed that 2013 was another fascinating year for electronic cigarettes. In addition to the category ringing up more than $1 billion in retail sales, she noted that the year saw the final two of the big three tobacco companies enter the e-cigarette arena. She also cited the financial and human talent resources the category attracted in 2013. For example, former Altria Sales & Distribution executive Miguel Martin joined LOGIC Technology Development LLC as its president.

Last year, though, also brought some challenges. Restrictions and regulations took hold in several markets, and taxation issues began to pop up on the state level. Additionally, Hong said she hasn't really seen "breakthrough innovation" in the electronic cigarettes category.

Of course, the biggest question that hangs over the category is what is happening with the Food and Drug Administration and its potential regulation of e-cigarettes. In the meantime, some states and local municipalities are taking matters into their own hands. Each day seems to bring new proposals to ban the sale of e-cigarettes to minors, and more cities are extending their public tobacco use ordinances to include the vapor products.

New York City and Chicago have already approved measures, while Los Angeles is looking to follow suit. On a smaller scale, cities such as Salem, Mass., and Savannah, Ga., have enacted their own rules. Still, only New Jersey has enacted statewide restrictions -- a move that dates back to 2009.

"There is a litany of regulations already on the books," Bishop said, explaining that the numerous local measures make it harder for grassroots education efforts at the state level. What is clear is "the desperate need" for scientific research that is based in the United States, he added.

To that end, the move toward a total tobacco harm reduction strategy appears to be gaining legs. The question then becomes: Where do electronic cigarettes fall on a spectrum that sees combustible products on one end and smoking cessation products on the other? Hong said.

"We know change is coming. We just don't know what it is," Bishop said. "The evolution of the next 12 to 18 months will tell where the category goes in the next 15 to 20 years."

The AWMA Marketplace & Solutions Expo took place Feb. 25-27 in Las Vegas.

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