With changes to the sales and packaging requirements of Tobacco about to arrive as part of the EU Tobacco Products Directive, we've explored the growing E-cigarette category to find out whether they are the future.

April 5, 2017
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E-Cigarettes - High Margins, High Potential

E-Cigarettes InfographicE-Cigarettes InfographicE-Cigarettes InfographicE-Cigarettes Infographic
With changes to the sales and packaging requirements of Tobacco to arrive as part of the EU Tobacco Product Directive, we’ve explored the growing E-cigarettes category to find out whether they are the future.

National E-Cigarette Daily Sales – 2,500 stores

In the last 12 months, E-cigarette sales have remained consistent at around £50 a day in turnover per store. Despite this, E-cigarettes are a growing market. In 2016, the category grew by 24%.

So why aren’t these changes seen in convenience? The appearance of specialise retailers and supermarkets are taking a large market share could explain. The are some great opportunities in the category, including high margins (explored below) and a variety of E-Cigarette manufacturers who are eager to work with convenience retailers.

Basket share of E-Cigarettes, Tobacco & Other Products

Right now, E-cigarettes account for a small share of the overall spend in convenience. According to analysts, the market is growing but it’s still far smaller than traditional tobacco products.

So why do we think it’s investing in?

Reasons to invest in E-cigarettes

1. Less regulation than traditional Tobacco. This allows you to create attractive displays to drive sales.

2. Far higher margins. As you’ll see, the average margin of E-cigarette products is 40% compared to 9% that retailers are receiving for Tobacco.

3. Great support from the industry. Opportunities to create profitable partnerships are everywhere are new supplier enter a market that’s still in its infancy.

While margins for Tobacco are growing, a topic we explored in our last infographic they are still far less than E-cigarettes. Currently, retailers still make more total profit from Tobacco sales as the E-cigarette share of the category is too low, despite the larger margin. However, with levels of E-cigarette category growth around 24% compared to gradual falls in Tobacco of about 1% per year, it is only a matter of time before the profit from E-cigarettes starts to match that of Tobacco.

With so many flavours and brands out there, we’ve researched the top ten selling E-cigarette products in convenience with the average price at which they sell.

  • Blu Pro Clearomiser – £5.01
  • Blue Liquid Classic – Single – £4.99
  • Logic Pro Ice Menthol Capsule – Single – £4.05
  • Logic Pro Tobacco Capsule – Single – £4.08
  • Blu Menthol Liquid – Single – £4.99
  • Red Cherry Capsules – Single – £4.06
  • Vivid Clearomiser – £5.01
  • Nicolites Cartomiser – £7.00
  • Vivid Tobacco Liquid Menthol – Single – £4.97
  • Blu Liquid Blueberry – Single – £4.98

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