As LOGIC and blu expand offerings, Wells Fargo expects growth acceleration of VTMs in c-stores.
LOGIC and blu are expanding into personal vapor products with LOGIC Pro and blu+, spurring Wells Fargo Securities analysts to predict that the products should generate faster growth than e-cigarettes and held re-accelerate vapor growth in c-stores.
“These introductions are consistent with our view that vapors/tanks/mods (VTMs) are driving growth in the vapor market—growing 2x faster than the overall vapor category per feedback from our independent manufacturer “Tobacco Talk” survey published earlier this year,” noted Bonnie Herzog, managing partner, beverage, tobacco and convenience store research. “Importantly, these products seek to address shortcomings of “traditional” e-cigs including: inconsistent performance, insufficient vapor volume, and weak draw/batteries. Further, they both feature the latest ‘next-gen’ technology and components, which should improve the user experience.”
Wells Fargo further noted that LOGIC Pro and blu+ should also be appealing to retailers because they could:
(1) help them re-gain traffic from vape shops and drive continued traffic given the razor/blade model behind these products;
(2) assuage any fears about product safety given these products are sealed/closed;
(3) offer margins that are 3x as high as combustible cigs.
Wells Fargo has repeatedly predicted that consumption of vapor products will surpass combustible cigarettes in the next decade.
“We continue to believe the movement towards VTMs and VTMs going more ‘mainstream’ represents an important next step of technological innovation, which we believe is crucial to drive vapor category growth,” Herzog said.