Altria takes number three spot, driven by MarkTen rollout.
E-cig dollar sales declined (-12.9% in the period ending July 5, 2014), driven by net pricing decline of 13.4% and unit growth of 0.5%.
Wells Fargo Securities LLC reported it is optimistic that national rollouts of MarkTen and Vuse could re-ignite category growth.
Average equal price per unit was $5.69. “We believe negative pricing trends could be due to increased penetration of kits which offer a lower price/cartomizer. Further, we believe the sales decline is more reflective of volume moving to vapors-tanks-mods (VTMs), which tend to be sold in non-tracked channels (especially vape shops) as Nielsen e-cig data is not a proxy for the vapor category as a whole,” said Bonnie Herzog, managing director, beverage, tobacco and convenience store research, Wells Fargo Securities.
Lorillard retained its No. 1 position in the c-store channel but dipped to 35.5% dollar share in the recent period compared to 42% last period. Logic maintained its 2nd place share position this period with a 24.2% share, as NJOY (6.9% share) yielded the 3rd spot to Altria with 13.6% share, thanks to the MarkTen national rollout. RAI’s share was 4.2%, Wells Fargo reported.
Even with e-cig category dollar sales growth declining, dollar sales are meaningful, with $38.9MM this period in the c-store channel.
Vapors/tanks are growing 2x faster than the vapor category based on Wells Fargo’s “Tobacco Talk” survey. “While we remain bullish on the category long term, we acknowledge near-term e-cig profitability could be soft, particularly as volume moves to VTMs. Bottom line—we continue to believe vapor consumption could surpass combustible cigs in the next decade, driving total profit pool growth and generating a 6.6% CAGR,” Herzog noted.