Big Business Invades as Electronic Cigarette Industry Explodes

Sep 09

Vuse Electronic CigarettesFor the past 10 years or so, the purveyors of electronic cigarettes have pretty much dominated the electronic cigarette market; however the landscape of that industry is shifting at a rapid pace. Large firms, including the top 3 tobacco manufacturers, have moved into the electronic cigarette arena. With projected sales revenue for electronic cigarettes expected to top $1 billion this year, the regular players, such as Vapor, Njoy and Logic are tensely anticipating the fallout associated with the invasion of tobacco giants into this once small niche market.

It was inevitable; the growth of the electronic cigarette market is reflective of the shrinkage of the regular cigarette industry, causing the large tobacco companies to use their power and resources to regain revenue lost by those who have quit smoking in lieu of using electronic cigarettes.

In August, Altria Group Inc., the largest cigarette manufacturer in America, begin selling their brand of electronic cigarettes. The second largest cigarette manufacturer, Reynolds American Inc., will begin selling their Vuse brand electronic cigarette in the state of Colorado next month. Lorillard Inc. the nation’s oldest cigarette manufacturer purchased Blu eCigs last year for $135 million. Since then, they have their placement up to 80, 000 stores.

Eli Alelov, the CEO of Logic Technology, says that the invasion of the larger corporations into the market is welcomed as long as they continue to play fair. There are concerns that the larger corporations will leverage their supply of cigarettes to major chains as way to insure their brands are carried in those stores.

This major play on the electronic cigarette market by the big 3 tobacco companies comes amidst a huge debate as to whether electronic cigarettes are any safer that smoking tobacco. The primary way that electronic cigarettes work is to use battery powered heating to create a vapor from liquid nicotine which replaces the smoke from traditional cigarettes.

At current, the FDA has not imposed any specific regulation on electronic cigarettes. The general school of thought is that despite the possible risks involved, electronic cigarettes are less harmful that traditional cigarettes, therefore a policy of less harm should rule out regulation.

At current, electronic cigarettes only account for 1 percent of US cigarette sales; however, revenue generated by electronic cigarettes is expected to top $10 billion by 2017.