“The biggest mistake was to call it an e-cigarette in the first place,” declares Jacob Fuller, gently puffing or “vaping” on a slim matt black device.
Fuller, who runs Blu eCigs UK, prefers the term “vaporizer,” as well he might given tobacco’s status as public enemy number one. But with its sleek vaporizers, which come in flavors such as cherry and vanilla, Fuller is serving up a sanitized vice.
“Like Starbucks is to coffee, we want to be that to the electronic cigarettes category,” he says.
For the uninitiated: E-cigarettes — invented 11 years ago in Beijing by a Chinese pharmacist — are battery-powered devices that simulate the effects of smoking by heating a nicotine liquid into vapor, which the user inhales and exhales. Other chemicals are added to create flavours.
Fuller thinks the “e-cig” label stunted the huge potential of the vaporizer market but the opportunity is still a large one with global sales hitting US$3 billion in 2013 from a standing start in 2008.
However, the e-cigarette market is a drop in the ocean compared with the global tobacco industry, which is still worth more than US$700 billion.
And competition is heating up: There are more than 400 e-cigarette brands in circulation, many of them cheap imports from China, but the big tobacco companies have started to stake a claim. Last month, Japan Tobacco bought the UK firm E-Lites for an undisclosed sum while Marlboro maker Philip Morris International, the world’s largest tobacco firm, is also making a play for UK “vapers” with last week’s purchase of Nicocigs, which makes Nicolites.
Fuller, who hails from Toronto, is determined that Blu, his new vehicle, will be out in front setting a goal of capturing up to a quarter of the UK market by the end of this year. E-cigarette usage in Britain has tripled to 2 million since 2012, according to the anti-smoking group Action on Smoking and Health (ASH) with UK sales thought to have quadrupled in size to an estimated ￡200 million (US$340 million) last year.
“We plan to replicate the success of the Blu brand in the USA which, with similar levels of funding, shot from a turnover of US$18 million to US$250 million in just a year,” Fuller says.
Fuller’s previous company Skycig was bought by US tobacco group Lorillard last year for ￡30 million, with that brand now being phased out in favour of Blu. The latter is already the biggest selling brand in the US — thanks in no small part to celebrity vapers in the shape of Leonardo di Caprio, Lindsay Lohan and British model Kate Moss.
The company is pumping ￡20 million into this month’s UK launch which is backed up by sales teams based in Edinburgh and Birmingham, in England’s West Midlands. It has also secured distribution deals with high street names such as WH Smith, the Co-op and Morrisons.
So what is the appeal of the UK? Fuller reels off the statistics: “There are, officially, 10 million adult smokers in the UK but there must be a lot more than that, so it is a massive market. It’s also very expensive to smoke here — smokers typically pay ￡8 for a packet of 20, compared with about US$10 in New York or even less — US$3.50 in North Carolina — so we are offering smokers a cheaper and more convenient alternative.”
Products in the Blu eCigs range are priced from ￡14.99 for a rechargeable kit and ￡5.99 for cartridge refills.
The market is a “hugely exciting one,” says Fuller, who points to technological developments that are creating better quality, more reliable products. The company that makes batteries for Samsung also makes them for Blu e-cigarettes.
However, some analysts argue that the entrance of big tobacco firms into the sector blurs the line between e-cigarettes and conventional tobacco.
In Britain, the e-cigarette industry is already facing scrutiny from both health experts and policy makers, with pressure for a more evidence-based approach amid concerns that usage simply “normalizes” smoking. Crucial to the industry’s future is whether e-cigarettes are a gateway into or out of tobacco addiction — and the jury is out on that one.
With plain cigarette packaging confirmed in the UK last week and tougher regulation ahead, health experts are demanding a clearer policy on e-cigarettes.
Fuller says Blu’s e-cigs are not being promoted or advertised as a device to stop smoking. Instead, the promotional material focuses on the product as “a lifestyle choice to give adult smokers the freedom to do what they enjoy but without being judged.”
However, he concedes that many Skycig users opted for “dual usage” — smoking regular cigarettes at home and e-cigarettes elsewhere. That will add weight to health experts’ claims that there is no evidence e-cigarette usage helps people to stop smoking.
Recently, more than 100 leading public health doctors and specialists from around the world signed a letter to WHO Director-General Margaret Chan (陳馮富珍), calling for new controls on e-cigarettes and warning that they may be a stalking horse for the tobacco industry.
They want the WHO to bring e-cigarettes under the same tight controls as tobacco products, with bans on advertising and promotion, claiming there is insufficient evidence that e-cigarettes are harmless and can help people to quit smoking.
Fuller, meanwhile, predicts that the number of e-cigarette brands will drop from hundreds to fewer than 10 in short order — and Blu e-Cigs will be one of the survivors.
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