America’s top selling vape brand JUUL arrived here in the UK last year, the third market launch on its course to deliver a global vaping vision. JUUL’s arrival brought an injection of fresh excitement to the UK vaping sector: its product portfolio was technically advanced and had been specifically developed by adult smokers for adult smokers. JUUL was enthusiastically received by UK consumers and the trade and rapidly carved itself a place in the market. JUUL UK MD Dan Thomson brings the story up to date.
When we spoke to you last year, you said the UK was your third market launch and JUUL was on a course to deliver a global vision. How many countries is Juul in now, worldwide?
JUUL is now available to adult smokers in 20 countries around the globe. Just over 3% of all cigarettes smoked worldwide are in the US so if we want to achieve our mission of improving the lives of the world’s one billion adult smokers and eliminate cigarettes, we need to scale the business across continents and countries.
You’ve been selling Juul here in the UK since July 2018. Last year you had a strong start in the multiples, with Sainsbury’s coming on board. How are sales going now in the multiple sector?
JUUL is currently available in Sainsburys, Tesco, Asda, Morrisons and the Co-op. In Sainsburys, where JUUL has been in distribution the longest, it is the number one selling vaping brand and has been strong since launch. Our goal is to grow the category by bringing more adult smokers into vape who want to switch from combustible tobacco. If the overall category is not growing and we are only stealing share from other brands, we are not achieving our mission, or helping retailers.
How big is the JUUL brand now in the UK? What brand share of total vaping does JUUL have?
In just over a year in traditional retail (multiple and convenience), JUUL has grown to almost 10% of the UK’s total vaping market, making it the UK’s number one closed vaping brand in what has historically been a fragmented market for upcoming brands. The closed system sector (pod and capsule), is driving over 80% of growth in the sector with value sales up over 200% over the past year. Within this growth sector, JUUL has almost 40% of the closed pod sector. (all data: IRI Value Sales, 12 weeks YOY to 20th October 2019)
In the US, there have been many deaths and lung illnesses attributed to vaping. As the largest e-cigarette manufacturer in the US, how do you respond to this and how safe is vaping in reality?
We appreciate the work of the Centers for Disease Control and Prevention (CDC), the U.S. Food and Drug Administration (FDA) and other public health authorities and are confident that they will get to the bottom of this issue. The ingredients of our products do not include THC, any compound derived from cannabis, or vitamin E compounds like those found in THC products. Vaping is not without risk but Public Health England has maintained its stance in light of the US situation that vaping is still at least 95% less harmful than smoking combustible cigarettes.
Do you get personally involved in talking to the major retailers?
JUUL Labs is a mission based company first and foremost – we want to improve the lives of the world’s one billion smokers and eliminate cigarettes. As MD, I am involved at the initial stages to share our mission with them, how we view the category and what the opportunities are. Multiples are leading the way in closed pod systems – closed is now outstripping open sales in that channel- but there is still a lot of work to be done. According to the Office for National Statistics, there are still over 7m smokers in the UK and by sharing knowledge, expertise and insight with multiples we can help them understand both the opportunities that vaping presents.
Where do the JUUL SKUs rank in the vaping/next generation products sales league table?
JUUL is the best-selling starter kit in the UK and six out of the ten five best-selling closed system refills are JUUL products.
What are the best-selling e-liquid flavours here? Again, how does that compare with other countries?
I can’t speak for other manufacturers but for JUUL, the top-selling flavour is Glacier Mint, followed by Mango and then Tobacco.
Talking about flavours, we’re in for a ban on mentholated tobacco products. How do you see that affecting vaping?
The upcoming ban on menthol tobacco and ‘click’ products (May 2020) will mean that the 20-25% of adult smokers who use these products in the UK and prefer menthol to tobacco flavour, will no longer be able to buy them. Clearly the ideal situation for such smokers would be to quit tobacco use entirely but, for those who choose to switch to alternatives in the e-cigarette and vaping category, they may be interested in some of the options and mint flavour products available there instead. Evidence supports the potential of non-tobacco flavours in e-cigarettes, including data independently conducted on JUUL products, by the Centre for Substance Use Research, which demonstrated that those using Mint and Mango JUULpods were 46% and 40% more likely to abstain compared to those who primarily used tobacco JUULpods.
Are you actively encouraging age verification for vape products in stores? If so, how?
JUUL Labs not only encourages it – we make it mandatory. Every JUUL stockist – large or small – must sign up to Challenge 25 and be prepared to be mystery shopped, otherwise products will not be supplied to store. JUUL is leading the industry in this respect. Through Serve Legal, our compliance partner, we mystery shop around 12,000 stores each year operating a three strikes and out policy with three consecutive failures resulting in suspension of trading for a minimum of 90 days. We do work with stores after failures – further training staff in age-verification and their responsibilities – to ensure that they make the necessary changes to keep themselves within the law and within our industry-leading guidelines. We also offer training, support and incentives for good pass rates.
Part of JUUL’s USP at launch was not being part of “big tobacco.” Since then, I gather Juul is now part owned by Altria – how has this impacted on the business and its mission?
The Altria deal in the US went through late last year and Altria is a 35% shareholder in the company, which offers it no operating control. JUUL agreed to the deal as it would ultimately accelerate our mission by increasing visibility and distribution of our product so it would reach more adult smokers.
How much are retailers aware now of the harm reduction from vaping versus tobacco?
For many retailers, it’s fair to say that vaping is seen as a sales and profit opportunity. Many public health bodies including Public Health England and charities see vaping as a huge tobacco harm reduction opportunity. Tobacco is the single largest contributor to preventable death globally.
Despite the assertions of PHE that vaping is at least 95% less harmful than smoking, 22% of smokers still think vaping is as harmful as smoking with a further 26% unsure. As an industry we need to educate adult smokers about smoking alternatives while dispelling some of the myths that are incorrectly reported in the media.
What are the ongoing UK vaping trends we should know about?
Vaping sales will continue to grow and devices and products will evolve. Many consumers are embracing healthier lifestyles and that includes smokers. The biggest change smokers can make is to abstain from tobacco.
Many adult smokers who want to switch from tobacco – and almost 60% of them do – want to do so with products that are simple to use, convenient and replicate the satisfaction they get from smoking a cigarette. This is where closed pod systems like JUUL come in and this is what multiple and convenience retailers should be making their focus.
Where do you see Juul going next? Are there more flavours and devices in the pipeline?
As a technology company, we will always strive to develop technical innovation to improve our products and the user experience. We are continually looking at NPD and have launched a connected device in JUUL C1 and are bringing out a new Ruby device in December. In JUUL C1 we have invested in creating a product which not only helps users monitor and limit their usage but also has the ability to lock the device to prevent access to unauthorised use. We will also be working with retailers to transform the way vaping is sold in terms of fixture equipment and gantry furniture. The more we invest to enhance the vaping experience for adult smokers and create visibility of the sector with our retail partners, the more lives we can improve.