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JTI said the deal was ‘in line with our exploratory approach for reduced-risk products beyond heated tobacco sticks’

Benson & Hedges maker JTI has taken a controlling stake in the UK’s largest independent vape company Flavour Warehouse.

JTI – Japan Tobacco International – this month secured more than 50% but less than 75% of shares in the company, according to documents notifying the “significant control” filed with Companies House.

JTI confirmed the deal, saying it was “in line with our exploratory approach for reduced-risk products beyond heated tobacco sticks”.

“The primary purpose of this investment is to increase exposure to a growing vape category. Flavour Warehouse benefits from a strong market position, an excellent reputation, and is recognised for its quality,” a spokesman told The Grocer.

Flavour Warehouse will continue to operate independently from JTI, The Grocer understands, with the existing management remaining in place.

The rise of vaping

Launching in 2013, Flavour Warehouse operates one of Europe’s largest e-liquid production sites at 115,000 sq ft, and employs around 100 people.

It makes and distributes its own brands including Vampire Vape as well as white-label products for “many leading brands in the industry”.

It has grown its presence across Europe in recent years, acquiring German-based Trulo GmbH in 2021, as well as Guildford-based Vapouriz earlier that year. It acquired vape juice manufacturers Total Vapour and Premier Vaping in 2019 and 2020 respectively.

It operates distribution hubs in England, Ireland, and Germany, with a presence in more than 80 countries globally via a network of franchises, distributors and resellers. It also runs leading online vape retailer Vapestore.co.uk and several physical retail sites.

JTI moved into the vaping category in 2015 through the acquisition of US e-cigarette company Logic. In 2023 the tobacco giant launched its first proprietary pod vaping system, and this year released its “new-generation pod vaping proposition” Logic RDY 900, initially in Canada. The company has been present in the heated tobacco product segment since 2011, with its Ploom brand.

Tobacco in decline

The deal comes as value sales of the overall UK cigarette category have fallen 5.9% on volumes down 15.2% [NIQ 52 w/e 7 September 2024], with loose tobacco’s value down 7.4% and volumes crashing by 21.6%.

The vaping category is not suffering nearly as badly: last year it saw a 0.9% decline in unit sales [NIQ]. Imperial’s Blu was the bestselling Big Tobacco-owned vape brand last year, selling 14.9 million more units than in 2023. The British American Tobacco (BAT) Vuse range, meanwhile, saw volumes dip by more than 10%. However, the category is overwhelmingly dominated by Chinese vape brands.

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