We all know tobacco is a dying market. But Britain isn’t knocking nicotine on the head altogether. E-cig sales jumped by a fifth to more than £150m last year, says Nielsen. And that’s just through grocers – include specialist and online retailers and the market is estimated to be worth half a billion.
That might be small change compared with the £14bn British smokers forked out on tobacco in 2015, as we reveal this week in our category reports on the tobacco and vaping markets, but e-cigs are catching up fast. By 2024, the vaping market is expected to be bigger than tobacco.
The question is: can grocers make the most of the opportunity? They’ve got off to a slow start, that’s for sure. Nielsen says the channel only accounts for about 30% of the total market, a damning statistic considering grocers dominate the tobacco retail trade.
As specialist vaping chains and online players cashed in, it seems the grocers were unworried, or out the back having a fag. With tougher tobacco regulations – including plain packaging, minimum pack sizes and a ban on flavour variants – coming into force in May, now could be the time for grocers to catch up.
But they’ll have to change their thinking. Vaping is different to smoking. Most vapers don’t just want a quick puff from a disposable ‘cigalike’. Sales of disposable products modelled on equivalents from the tobacco sector are falling fast; bulkier, refillable and adaptable products are all the rage.
Not only will retailers have to think hard about merchandising such products, they’ll also have to consider how they can offer customers advice. Vaping has its fair share of anoraks; they want to talk about the ins and outs of a product before they buy, hence the success of specialist vape stores.
There might be an unlikely hero to this tale for the grocers, however: the tobacco companies. Having bought up many of the biggest e-cig brands in recent years, they’re positioned to cash in on the expected growth in vaping. With distribution to the grocers already established, maybe it’s the specialists who should now be worried.
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