What’s Next for Vapor & Harm Reduction Products?
When it comes to what awaits on the harm reduction horizon, there’s not much tobacco experts know for sure, except this: the industry must keep fighting the good fight to ensure consumers have access to combustible alternatives.
The U.S. regulatory system has been viewed as tobacco harm reduction’s greatest challenge and its best opportunity. This duality is expected to continue for the foreseeable future, according to a somewhat mixed bag of viewpoints expressed to Convenience Store News.
On the one hand, “the regulatory climate for vapor and harm reduction will continue to heat up,” foresees Bryan Haynes, a partner with the Troutman Pepper law firm and head of its tobacco law practice. This is best evidenced, he said, by recent happenings surrounding other areas of tobacco, including the Food and Drug Administration’s (FDA) proposed product standards that would ban menthol in cigarettes and ban “characterizing flavors” in cigars. It is also evidenced by recent reports that the FDA is working on a rule mandating that all cigarettes have minimal or nonaddictive levels of nicotine.
The FDA’s ongoing actions around premarket applications for deemed tobacco products — which does directly involve vapor and harm reduction — will continue to be an area of interest, as will the courts’ decisions in litigation challenging the FDA’s determinations, according to Haynes.
Meanwhile, the Biden Administration’s expanded definition of tobacco products to include nicotine from any source grants the FDA “a great deal of regulatory power over the industry, and the potential to remove e-cigarettes,” noted Cadent Consulting Group Managing Director Don Stuart, who also believes the tobacco regulatory climate will continue to heat up.
“Unfortunately, there will likely always be regulatory challenges with misinformation surrounding any nicotine product line, but we are always working to educate elected officials and regulators,” said Mary Elizabeth Barwick, vice president of strategic engagement for Reynolds Marketing Services Co. “In addition, many third parties and think tanks are educating people on all harm reduction policies that include nicotine.”
The Optimism
Even more promising, according to Barwick, is the growing recognition across media sources and among scientific experts on the value of tobacco harm reduction, as well as the idea that vapor, modern oral and other noncombustible tobacco/nicotine products may present significantly less risk than smoking.
“There is still a long way to go, but we believe this is the best option for adult consumers and migration away from combustibles to potentially less harmful products,” she said.
Moving forward, Don Burke, senior vice president of Management Science Associates Inc. (MSA), a Pittsburgh-based company focused on analytics and informatics, foresees the regulatory climate easing up for tobacco harm reduction and vapor.
“This may be a little too optimistic,” he admitted, “but I believe a more commonsense tobacco regulatory approach may ‘win the day’ in a year or two as regulators come to the realization that innovation in these two areas is critical to reducing harm.”
Furthermore, Burke believes the growing acceptance at the federal level of cannabis as a legal but controlled product category will have somewhat of a “halo effect” on tobacco regulation. “I think it may lead to a more logical reconsideration of other regulated products, particularly harm reduction and vapor items,” he said.
The Threats
What are the biggest threats to vapor and harm reduction products moving forward?
According to Barwick, “bans are the biggest threat and that comes from misinformation on the products and what they offer adult consumers. There is also a misunderstanding on how youth most commonly access nicotine products, which we know to be social sources, but we all need to take a hand in proper enforcement of youth access prevention measures to ensure adults are able to purchase these products.”
Haynes sees the requirement to obtain FDA authorization for new products as the industry’s biggest challenge, along with the FDA’s evolving standards for evaluating new product applications. At the same time, the FDA is not adequately enforcing the law with respect to companies that have introduced new products without submitting the necessary applications, according to Haynes.
“This operates as an unfortunate disincentive to innovate,” he said. “Complying with FDA premarket authorization requirements entails substantial time and expense. But if the FDA does not enforce those requirements against companies that choose to ignore them, it disincentivizes law-abiding companies from investing resources in the process.”
Cadent Consulting’s Stuart believes the biggest category challenges ahead are primarily related to teen marketing and teen usage. He pointed out that recent lawsuits involving teen targeting claims were settled and “there was no admission of any wrongdoing” on the part of vape suppliers. “This will continue to be a hot button issue,” he said.
There’s also the linkage of nicotine vapes to marijuana vapes posing a threat. “The inclusion of vitamin E acetate in vape pens was identified as an earlier issue and can further complicate the problem,” Stuart cautioned.
Additionally, there are industry naysayers who believe tobacco harm reduction is not good enough and the only acceptable solution to reduce harm for consumers is the total elimination of tobacco/nicotine items. “This is unrealistic,” Stuart asserted.
The Opportunities
Pending and future acquisitions of cigarette companies by vapor and harm reduction companies, as well as the increased focus on non-combustible tobacco alternatives that both suppliers and retailers are taking, present good opportunities for the category moving forward, industry experts agree.
“It is reasonable to assume that there will be some consolidation,” Haynes stated.
This will open up the market for new, innovative harm-reduction items, according to Burke. “It will also increase the U.S. competitive landscape for other manufacturers.”
Technology and innovation are the biggest opportunity drivers for the category moving forward, the way Barwick sees it. Together, they have the opportunity to provide adults with the information, the access and the ability to understand nicotine products and support possible migration to potentially reduced risk products.
“Gone are the days when we could expect consumers to learn about products through static paper point-of-sale marketing,” she said, adding that retailers and suppliers both have the opportunity to evolve their marketing to be more digitally savvy, as customers evolve in the same capacity. The innovative nature of the category lends itself to digitally dynamic marketing efforts.
Because regulation is so aligned with vapor and harm reduction products moving forward, it’s important for retailers to remain as engaged legislatively as possible — aligning themselves with suppliers — so they can help form the regulatory framework by providing industry perspectives, Barwick advised.
“This type of engagement is the best way to ensure that legislators and regulators have a comprehensive understanding of the issues, which should result in laws and regulations that are appropriately tailored and not necessarily burdensome on retailers or unnecessarily restrictive for adult nicotine consumers,” she said.
Reynolds is one supplier that has created a platform that provides a suite of tools and resources for retailers to remain informed and interact with elected officials.
For convenience store retailers that want to prepare for upcoming legislation in the category, Haynes’ chief piece of advice is: “Don’t panic.”
“Although the FDA has proposed — and apparently intends to propose — product standards that would have a significant impact on the industry, the rulemaking process takes a long time. It is reasonable to assume that it would be at least three years before any of these standards takes effect,” he noted.
Haynes goes on to explain that the FDA must consider stakeholder comments and the economic impact of any proposed regulations. And the law mandates that these standards cannot take effect for at least one year after they are finalized.
Furthermore, the FDA’s ability to finalize these rules is, by no means, certain. Depending on how the agency evaluates stakeholder comments, the rules could be withdrawn, changed or subject to litigation.
This is part three of a "Real Talk, Real Issues" series sponsored by Reynolds Marketing Services Co., examining how convenience stores are coping with the unique challenges they face.