U.S. Vape Shops Ring Up $300K a Year
WASHINGTON, D.C. — Vape shops may be relatively new to the retailing landscape, but the outlets are generating more than $300,000 per store annually.
The new non-online stats come from 2015 Vape Shop Index, released by ECigIntelligence, Roebling Research, E-Cigarette Forum and the Smoke-Free Alternatives Trade Association (SFATA).
"This really is the first time that the industry will have detailed independent data from vape shops, where much of the growth in the sector is now occurring, reaching more than $1.5 billion in annual revenue," said Tim Phillips, CEO, ECigIntelligence. "As consumer preferences evolved toward open system tanks and e-liquids, we saw a need for accurate data to help shop owners better compete in today's marketplace."
The index, an ongoing study of U.S. vape shops as part of "Project Vape Manifest," analyzed financial, product and brand-level data, including trends, preferences and owner attitudes from 540 vape shops across 42 states.
The index also found that more than two-thirds of respondents were single-store owners, while 16 percent owned two shops and 15 percent had three or more stores.
Other findings include:
- Sales of e-liquids account for nearly 60 percent of store revenues.
- Fruit and dessert flavors were ranked as the top-selling e-liquids.
- Fifty percent of e-liquids are sold in 3 mg/mL and 6 mg/mL nicotine concentrations.
- Forty-three percent of brick-and-mortar vape shops sell online.
The index also revealed that nearly all respondents (98 percent) support appropriate and reasonable regulations. However, two-thirds (67 percent) of vape shop owners claim state regulations are/will be hurtful to their businesses, despite the fact that more than three-quarters of respondents are optimistic about the current state of the vapor industry.
"Our results show that the vape shop channel is primarily made up of sincere, hard-working small businesses that contribute significantly to the economy," said Cynthia Cabrera, president and executive director of SFATA. "Results also point to the fact that regulations are a key concern and anything onerous, such as the FDA's pending final rule, could seriously impact tens of thousands of jobs, as well as jeopardize the role vapor products play helping smokers switch to a less harmful alternative."
According to the 2015 Vape Shop Index, 85 percent of vape shop retailers are using in-store signage to prevent underage sales. Similarly, 54 percent of retailers do not allow minors to enter their stores and 92 percent always require ID at the point-of-sale.
The index also found that the e-liquid sector remains very fragmented and no one company dominates in terms of brand penetration, while the hardware sector is much more consolidated.
"As the vape shop channel continues to mature, we'll probably see more consolidation as established vape shop retailers continue to grow and expand their businesses," said Steve Hong, principal, Roebling Research. "There's no doubt this channel is driving the broader category and we expect the channel to grow even bigger next year."