Where the Tobacco Category is Heading Next

The current crop of tobacco and nicotine products

The removal of Juul’s vape pens and pods from retail shelves still leaves other e-cigarettes and non-combustible products on the market. Brands such as Logic, Njoy, and Vuse (from RJ Reynolds Vapor Co.) have been cleared by the FDA and are available at select retail outlets. In fall 2021, Vuse secured marketing orders for its original Vuse Solo flavored e-cigarette.

Given the controversies and concerns over e-cigarettes, some retailers have stopped selling them. In 2019, Walgreens said it would stop selling these items nationwide as health officials and federal and local government agencies assess the effects. That same year, The Kroger Co. and Walmart also halted e-cigarette sales.

Although this segment has shrunk, electronic cigarettes are not the only alternative to traditional cigarettes. The broader tobacco market also includes smokeless tobacco and at least 23 other FDA-cleared electronic nicotine delivery system (ENDS) products, including hookah pens and e-pipes.

The basic cigarette market is also undergoing an overhaul, with use declining at a rate of 12.5% ​​of the US population in 2020, down from 20.9% in 2005. Among youth, the rate has fallen to 2.3% in 2021, according to a study. from the University of Michigan.

New additions provide more options for smokers. For example, in addition to flagship cigarette brands and products from Philip Morris and RJ Reynolds, the market has expanded to include offerings such as organic tobacco products from the American Spirit brand, known for its colorful packaging.

Another new entry is described as the first cigarette on the market authorized by the FDA to help smokers reduce their consumption. Containing 95% less nicotine than conventional cigarettes, VLN was developed by agricultural biotechnology company 22nd Century Group, after a decade of independent research and clinical trials.

The FDA classifies VLN as a Modified Risk Tobacco Product (MRTP), making it the first of its kind, according to the company. “We believe the MRTP set will be the latest innovation in tobacco merchandising as displays transition from cigarettes to OTPs [other tobacco products] at ITP [investigational tobacco products] and now at MRTP, and that grocers are uniquely positioned to capture a large share of this emerging category,” said John Miller, who leads the growth of the reduced nicotine tobacco business for the 22nd Century Group, based in Buffalo, New York.

VLN was initially available through a pilot program at select Circle K convenience stores in the Chicago area. Along with the convenience factor, Miller cites other reasons why retailers, including traditional grocers, can do well with these new products. “Although at the start of the program, trends lead us to believe that adult VLN customers are buying larger quantities of product per transaction,” he says. “The belief is that an adult smoker who wants to smoke less wants to buy a whole carton of VLN cigarettes and avoid the temptation to go back to old ways and focus on their VLN journey.”

Miller adds that some states, including Colorado and Connecticut, are already creating tax benefits for MRTP products.

As for demand, Miller draws a comparison with other commonly consumed products. “Based on experience and results in the non-alcoholic beverage category, as well as the decaffeinated coffee category, it’s understood that adult consumers want choices and solutions,” he says.

Big tobacco companies are also venturing in new directions with cigarette deals. Altria Group Inc. Philip Morris USA, based in Richmond, Virginia, the famous company behind traditional cigarette brands such as Benson & Hedges, Lark, Marlboro, Merit and Virginia Slims, has developed the Iqos line of products of heated tobacco, including Iqos Veev.

Similar to an e-cigarette and touted as an alternative to vaping, Iqos is described as a “heating stick” that heats up instead of burning tobacco. To avoid the backlash that has erupted over the marketing of flavored tobacco products to children, Iqos products are for adult use only.

Finally, as consumers look for alternatives to traditional cigarettes, tobacco-free and nicotine-free herbal cigarettes are increasingly gaining ground. In June, for example, Charlotte, North Carolina-based Cajun Cigar Czar LLC entered into an agreement with Las Vegas-based Laika Brands to sell Laika hemp cigarettes in stores across the United States. Although herbal and hemp cigarettes are commonly sold in independent tobacco and cannabis specialty stores in states where the use of the latter is legal, retail giant Amazon sells cigarettes at plant base on its website.

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