Pod Races

Nick Geens, Head of Vaping Business at JTI, and Ed Merrett talked about Logic Compact – JTI’s pod-vaping system and explained how to profit from vaping at the first Vape Business Conference which was held on July 3 at the Millennium Gloucester Hotel in Kensington, central London.

The Vape sector is currently a £1 billion market, with at least two million consumers, compared to traditional tobacco’s (declining ) £15 billion and eight million smokers share, Nick said. One key difference is that there are basically four cigarette manufacturers and a few hundred products in total. The vape market on the other hand has 600 producers and 40,000 products just in the UK! No wonder it is confusing for retailers.

“Many manufacturers are knocking at your door wanting you to list their products in your store” Nick said. “But you might not see them the next day, they might not take product compliance or safety regulations very seriously – everybody is in the category to make a quick buck and might disappear in a couple of months.”

In this Wild West scenario Nick underlined the importance of partnering with the right suppliers. He also explained that about currently the vape market is “80 per cent, give or take, open tanks – the bottles, the refillable devices” where vape enthusiasts mix and match, freestyle, their own combinations of hardware and vaping supplies.

They also tend to patronise specialist vape shops, in towns or online, which explains the relatively low vape sales that independent retailers have seen so far. But change is on the way.

The wider market, for conversion from cigarettes, Nick explained, is chiefly for “closed system” vaping, currently close to 20 per cent. This used to mean cig-alikes or “e-cigs” but is now transforming into the much more evolved and modular “pod” system, which looks to be the mass-market future and a big source of sales for retailers, although as vapers become familiar with different methods, they might use both open and closed systems in different situations, as several of the panellists at the conference later emphasised.

“At the moment you see crazy brands, funky-looking packaging, you hear about wicks and coils and amps and volts and acronyms, and unless you are a specialist you will never get to understand all of those things,” said Nick.

Which is why the big manufacturers are so keen on pods, because they know that as smokers migrate from tobacco to vaping, pods represent the easiest route with the widest appeal.

“Overall the category is worth about £4.5 million per week in terms of sales,” said Ed, “and the growth trend is now up, massively, in terms of volume and in terms of value in the closed tank sector, and that is all down to these new pod systems.”

“Products like Logic Compact are very simple to use,” Nick concluded. “You click the capsule into the device and off you go, you start vaping.”

With education and good category management, such as Logic’s Vape Academy service and their Vape Gallery gantry, the future of vape sales for independents is bright.

This article first appeared in the 19 July 2019 issue of Asian Trader magazine.