C-stores Could Hit $1B in E-Cigarette Sales This Year

Press enter to search
Close search
Open Menu

C-stores Could Hit $1B in E-Cigarette Sales This Year


NEW YORK -- New Nielsen convenience store data indicates that electronic cigarette sales could hit $1 billion this year, with that figure jumping to $1.7 billion when factoring in online sales.

Leading e-cigarette sales at c-stores is Lorillard Inc.'s blu eCigs brand, according to Bonnie Herzog, managing director of tobacco, beverage and consumer research at Wells Fargo Securities LLC. She cited Nielsen numbers showing that blu captured 39 percent of the dollar share in the convenience channel during the most recent four-week period ended July 6, followed by NJOY with a 30.1-percent share.

Looking at extended all-outlet coverage (XAOC) from New York City-based Nielsen, blu came in first again with a 44.5-percent share. Other leading brands in the XAOC channel include FIN at 20.6 percent, Mistic at 11.7 percent and NJOY at 10.8 percent.

"We believe e-cigarette consumption could surpass traditional cigarettes within the next decade and the combined operating profit pool could generate a CAGR [compounded annual growth rate] of 7 percent over the next decade," Herzog stated.

While electronic cigarette dollar sales grew 189.6 percent in the four-week period ended July 6, according to Nielsen, total cigarette dollar sales in the U.S. convenience channel grew 1.2 percent over the same timeframe, vs. 1 percent in the last four-week period and 1.3 percent in the prior year.

Unit sales posted their best results – meaning their lowest decline -- of the past 12 periods, Herzog said, adding that this was likely driven by moderating net price realization.

"We believe the recent cigarette list price increase of 6 cents per pack is now reflected in the c-store channel. Despite somewhat tepid price realization for retailers per the Nielsen data, we expect net price realization for the manufacturers to accelerate to about 4 percent in [fiscal year] 2013, which should offset volume declines, leading to positive dollar sales," she explained.

As for individual cigarette brands, all three Big Tobacco companies -- the Altria Group Inc. Reynolds American Inc. and Lorillard -- saw positive numbers during the period, she added.