The report was announced by Charles Gardner, a director of the Foundation, who said: “Vaporisers are the fastest growing product category, but ‘...conventional cigarettes remain the dominant nicotine-delivery vehicle worldwide, with important exceptions such as India, Sweden, and Norway’."
The Foundation estimates that the total global nicotine product retail sales market was worth £597 billion in 2017. It was made up as follows:
- All combustible tobacco products (cigarettes, cigars and cigarillos, and smoking tobacco) 95.8% [of which, Cigarettes 89.1%]
- Smokeless tobacco products 1.6%
- Open and closed vaping systems 1.5%
- Heated tobacco products 0.8%
- NRT smoking cessation aids 0.3%
It goes on to state: “Harm-reduction devices are a relatively new phenomena, but the use of clean nicotine is still being debated in public health circles. Currently, harm reduction is a debate that has divided the tobacco control community.”
We see this being enacted on a daily basis, from research supporting vaping as a quit tool to hysterical newspaper articles claiming eliquids are designed to trap a new generation of users for Big Tobacco.
The Foundation is supporting work that will critically evaluate the companies involved in this market, with an ultimate goal of attaining the, “transformation of the entire global tobacco industry and nicotine ecosystem. We believe the transformation of the tobacco industry can provide an enormous and crucial accelerant to the process of eliminating combustible tobacco.”
The report notes that although cigarette sales are falling in volume around the world, the actual value of those sales is increasing due to price increases. Conversely, the volume of vaping products being sold rose by 15.8%, which translated to a growth of 18.2% in value – making the market worth almost £9 billion.
It notes a word of caution before anybody should get overly optimistic about where this is heading: “The performance of … vaping … products is heavily country-specific and does not reflect any type of global trend to date.”
That said, “Changes driven by product innovation are occurring: E-cigarette consumption is growing rapidly in selected markets. The issue here is that performance varies widely by market, in part because of differences in regulatory regimes affecting availability, taxation, sales channels, youth access, public vaping, product restrictions, and advertising.”
Also, the Foundation recognises that as Big Tobacco only holds an estimated 21% of the market, assessing its value is difficult because, “e-cigarette sales occur through multiple distribution channels: retail stores, vape stores, and online. Sales via vape stores and online sites are more difficult to track.”
It highlights that vaping is continually experiencing innovation, and the new products dive forward disruption in the tobacco industry due to having the potential to “decouple nicotine consumption from lethal inhaled smoke.”
When looking at the overall global vape market, the combined factors of a fragmented independent sector and the rapid growth make tracking very difficult. The Foundation estimates the open vaping systems (mods and atomisers) to make up 65% of the total sales, with closed vaping systems (cigalikes and pod systems) at 35%.
“That said, during the past couple of years, the mix is shifting incrementally from open vaping systems to closed vaping systems, in part due to the increasing popularity of proprietary pod-based products (i.e., JUUL Labs in the U.S.).”
“The category is not dominated by the large tobacco companies ... According to Euromonitor, in 2017 British American Tobacco had approximately 4% global share in open vaping systems, and none of the other large tobacco companies exceeded 1% retail sales share.”
After the United States, the United Kingdom is the second largest vape market in the world, worth £1.3 billion, according to Euromonitor. This works out to be 7% of all nicotine product sales in the UK, and grew at a compounded annual growth rate of about 45% between 2014 and 2017.
Vape sales in the UK came from:
- Online 50%
- Specialty stores (including independent vape shops) 20%
- General retail 30%
On China, “Most of the world’s e-cigarette manufacturers are located in China, specifically, Shenzhen. A list of manufacturers of e-cigarettes in Shenzhen includes iSmoka, IVPS, Shenzhen Innokin Technology Co Ltd, Kanger, Shenzhen Eigate Technology Co Ltd, Joyetech, Teslacigs, Shenzhen Smoore, Sense, and others. In Shenzhen, analysts estimate that there are more than 600 e-cigarette factories. However, this figure includes counterfeits and clones.”
The report notes that many brands based outside China have their hardware manufactured by Chinese companies, while the production of eliquids tends to remain domestically produced.
And then there is the question of what could happen should the China National Tobacco Corporation decide to produce its own vaping products? It is believed that the global giant is currently preparing to get involved in both the vaping and heat-not-burn markets. Once this happens it would spur a massive upheaval in Chinese tobacco use and could have a major knock-on effect around the world.
One look at the graph comparing vape sales to nicotine replacement therapies highlights precisely why pharmaceutical companies are so keen to oppose harm reduction approaches.
“We believe it is clear that innovation in the e-cigarette category during recent years has far surpassed that of the NRT smoking cessation aids category pipeline, potentially contributing to the shifting trend. More research on whether e-cigarette use is indeed displacing standard cessation assistance and how this may impact long-term abstinence is needed, especially considering the increase in e-cigarette use.”
The full report from The Foundation for a Smoke-Free World can be found here.