The vape category has grown to be worth around £1.2bn in the UK, with 44% of vaping volume sales taking place in the Grocery channel.
As demand for vaping products continues to grow, dedicating ample space to vaping products in store should be an important area of focus for any retailer.
As a result of the Covid-19 pandemic, many customers have started shopping locally or online, in part because they are less willing to go far from home for their products.
“As a result of the ban on characterising flavours, some consumers have been looking to vaping to fulfil their flavour needs,” comments Duncan Cunningham, UK Corporate Affairs Director at Imperial Tobacco & blu. “In fact, our best-selling variant in the myblu range is the Menthol Intense Liquidpod so we would highly recommend this as a must-stock for all retailers.”
Figures show that pod systems and cartridges have seen the most year on year growth across all channels and within Grocery specifically, closed devices, such as myblu, are the most popular, accounting for 5.6% of volume share, vs. 4.6% for open devices.
“One of the main factors driving the popularity of pod-mod systems like myblu is their ease of use, with the device’s hassle free Liquidpods allowing vapers to switch between flavours in seconds via a simple one-step ‘click and go’ system,” says Cunningham. “With this in mind, we’d strongly recommend including a leading pod-mod system such as myblu within the range to tap into this trend.”
The myblu pod-mod device is one of the brand’s leading vape products. The device combines the performance demanded by experienced vapers with the ease-of-use appreciated by new entrants to the category. The device’s hassle free Liquidpods allow vapers to switch between flavours in seconds via a simple one-step ‘click and go’ system.
“As an incredibly fast-moving category, it’s important for retailers to keep one eye on the emerging trends in next generation nicotine products and be prepared to adapt their range to incorporate any new products they think would work for their customer base,” suggests Cunningham. “Making room for a small sample of new products on a regular basis enables retailers to trial the products and assess shopper interest in them prior to investing heavily or making them a permanent part of their range.”
Retailers are a hugely important route to market for blu, representing a significant proportion of our sales. As such, the brand continuously invests in supporting retailers so that they can make the most out of its products with sales and trends advice, promotions, store visits and in-store furniture.
As well as supporting retailers through a team of sales representatives, blu’s Ignite app is another great resource and allows retailers to keep up to date with the latest news, information and training opportunities to help them perform at maximum efficiency. It includes a wide range of tools and advice, including incentive articles, downloadable POS, product information and top tips on how to increase sales in store.
Paul Shakespeare, portfolio brand manager at JTI UK, comments: “The 100% tobacco-free nicotine pouch category continues to grow and shows no signs of slowing down. Existing adult smokers and vapers today aren’t looking for a ‘one size fits all’ approach. Instead, we know that there is a real demand for convenience and the option to have different products to suit different occasions. Nordic Spirit offers an alternative product for customers without producing smoke, vapour or odour, allowing it to be used when smoking or vaping might not be possible.”
Nordic Spirit offers three strengths depending on what flavour the customer chooses. Mint is available in Regular, Strong and Extra Strong across retail outlets in the UK, whilst Bergamot Wildberry and Elderflower are available in Regular or Strong. In October JTI expanded its strength offering for customers by launching Bergamot Wildberry flavour in Extra Strong, to cater for the developing trend in the category for higher strengths. A new flavour is joining the Nordic Spirit range with the introduction of Spearmint, in a range of Regular, Strong and Extra Strong strengths.
The predominant nicotine pouch strengths in the market are 9mg with a 30.1% share, 6mg with a 22.3% share and 12mg with a 20.7% share.
Heated tobacco devices offer existing adult smokers an alternative but familiar tobacco experience by heating tobacco instead of burning it. The Ploom device is available online at www.ploom.co.uk and through Accredited Retailers across London. The device can be used exclusively with EVO tobacco sticks which are available for all London retailers within the M25.
JTI recently reimagined its EVO tobacco sticks, just in time for the first anniversary of Ploom in November. Featuring a longer filter to achieve a smoother, real tobacco taste, the upgraded EVO tobacco sticks provide an enhanced experience from start to finish.
The new and improved EVO sticks, which have an RRP of £4.50, offer a variety of enhanced flavours ranging from tobacco, for true tobacco enthusiasts, to menthol-based flavours for a more refreshing taste sensation.
With a range that is designed to tap into consumers’ top flavour preferences, retailers across London can maximise this huge sales opportunity by stocking all four EVO tobacco flavours: Bronze, Amber, Green and Purple.
“Closed pods are the dominant sector in multiples with 52.4% share, followed by open systems at 28.7%, comments John Patterson, Senior Director Sales, UK at JUUL Labs. “Over the past year, closed systems have fuelled growth in the multiple retail category with 36.7% growth. JUUL is the leading brand by value in the channel and has seen growth of 49.8% year on year.”
JUULPods sell more than hardware as users refill their devices. The best selling JUULpods flavors in order of sales are: Mint, Berry, Mango, Menthol and Golden Tobacco.
JUUL has just launched its next generation JUUL2 system, with new technology offering adult smokers a more consistent vapour experience, to transition even more adult smokers away from cigarettes. The new JUUL2 device features a larger, long-lasting battery and larger pods containing a JUULpod ID, helping to combat underage use and counterfeit pods.
A recent report from King’s College and Cancer Research suggests that during lockdown there has been an increase in smoking, which is concerning as smoking is the leading cause of preventable death both in the UK and globally. However, data from IRI suggests that the e-cigarette category has grown by around 25% over the past 18 months with closed systems increasing its share of the category and becoming the dominant sector, having overtaken open systems in August last year.
Kate O’Dowd, Head of Commercial Planning UK & Ireland at Philip Morris Limited (PML), comments: “We have come a long way since Philip Morris opened his first shop in 1847, selling tobacco and ready-made cigarettes on London’s Bond Street. Back then, and well into the 20th century, we were known for building the world’s best-selling cigarette brands, such as Marlboro. Today, we are committed to replacing cigarettes with science-based better alternatives for adults who would otherwise continue to smoke.”
Since 2008, Philip Morris International has invested more than USD 8.1 billion into the science and research of developing smoke-free products, and its breakthrough heated tobacco system, IQOS, has helped almost 15 million adults around the world switch away from cigarettes and stop smoking completely since its launch in 2016.
“IQOS first arrived in the UK in November 2016 and is now the country’s number one smoke-free product,” says O’Dowd. “However, the journey to get us here has been long and is far from over if we’re to fully realise our smoke-free ambitions.”
IQOS has been the UK’s number one smoke-free product for over a year now and a category leader.
The IQOS consumable (known as ‘HEETS’) has increased its market share by 75% in the past year alone and since 2018, the number of stores selling HEETS in the UK has increased sixfold. In locations such as London, the market share for HEETS has exceeded 5%, with thousands now stocking a range of variants.
PML currently has nine HEETS variants available, from smooth or full-bodied classic tobacco through to a choice of menthol blends.
“It’s only thanks to our retailer partners that we’re now able to provide wider access to smoke-free products for adult customers, raising awareness about their existence and making them acceptable, available, and affordable so that more smokers switch,” says O’Dowd.
“As we mark the fifth anniversary of IQOS in the UK, we are proud of the momentum we have built behind the heated tobacco category, which we believe will continue in 2022,” adds O’Dowd. “However, this will only be possible by continuing to work closely with our retailer partners. They have been integral in driving category growth by educating their smoking customers on heated tobacco and helping adult smokers who can’t or will not quit tobacco to switch to smoke-free alternatives such as IQOS and HEETS.”
The number of stores selling HEETS has increased sixfold since 2018. As a result, PML now sells almost 50 times the volume of HEETS each month than it did monthly in 2017. The market share for HEETS has also increased by more than 60% in the past year alone.
“We’d like to thank the general trade for their support, and we look forward to continued collaboration on our journey to a smoke-free future, O’Dowd continues. “We knew it would take time, but with an unparalleled success rate in helping smokers make the switch from cigarettes in other markets, we are starting to see impact.”
Darren Griffin, UK Country Manager of ZYN, comments: “Following the ban on menthol cigarettes in 2020, consumers have now become even more open to reduce risk products when looking for menthol alternatives, and nicotine pouches have continued to see a tremendous growth in the last 12 months. The nicotine pouch category has seen a weekly CAGR of 1.8%, an average monthly growth rate of 8% and in 2021 is forecasted to grow to a CAGR of 206% from 2020 volumes. When looking at the nicotine pouch market specifically, mint flavoured nicotine pouches currently make 77% of the total market volume.”
Nicotine pouches (without tobacco), have continued to gain popularity in the UK, which was followed by a huge uptake in the USA. Now in the UK, we’re seeing a significant rise in the demand for this tobacco-free, smoke-free alternative. ZYN was originally developed for the US market, and is now America’s best-selling tobacco-free nicotine pouch, with over 100 million cans sold in 2020 alone.
ZYN nicotine pouches are available in Spearmint, Citrus, Espressino, Bellini and it’s most popular flavour, Cool Mint. Most flavours come in two different strengths, 3mg and 6mg. Cool Mint is now also available in 9mg strength. This new product has helped meet the demands of UK consumers, as the majority (70%) of nicotine pouch sales today are from products containing 9mg of nicotine or higher.
ZYN recently expanded its flavours to introduce the Bellini range in 3mg and 6mg. In October the brand also launched its strongest pouch, Cool Mint 9mg, to meet the rise in consumer demands for those looking for a more intense nicotine kick.
“Retailers should always ensure they stock a range of as many flavours and strengths to meet consumer demands,” suggests Griffin. “Additionally, retailers should also continue researching the category, which can be done by visiting manufacturers’ websites. This ensures better consumer engagement and also allows retailers to offer further insight on their products sold.”
“The convenience of stocking a variety of nicotine pouch ranges also differs from other nicotine categories such as vape, where retailers are expected to stock, liquids, mods and other hardware devices and even their parts, such as batteries and tanks, as well as starter kits, disposables and closed pod systems,” Griffin continues. “Compared to this, nicotine pouches take up relatively little space, whilst also achieving a higher POR than most other categories within the nicotine sector.”
With leading cigarette and tobacco manufacturers placing a bigger focus on producing alternatives, we know that the market is shifting towards meeting the demands of a more health-conscious consumer base.
“This industry shift shows the need for retailers to revisit their displays, remove slow-selling cigarette, tobacco and cigar SKUs, and make space for the latest higher performing categories such as nicotine pouches – which also offer a significantly increased margin to retailers than the traditional cigarette base,” adds Griffin. “As nicotine pouches in particular offer significantly higher margins than either Heat-not-Burn or cigarettes/tobacco, not only will retailers better meet the changing consumer demands but can also benefit from an increased ROI.”
Nicotine pouches are the fastest growing category across the nicotine industry and growth is only forecasted to escalate over the foreseeable future.
“It is therefore imperative that retailers ensure they keep themselves well informed on the industry to provide the correct stock that fulfils their customers’ demands,” says Griffin. “Additionally, we’ve seen a common trend of people aiming to make healthier daily choices and we know that people are currently more familiar with e-cigarette as a cigarette alternative. For those conscious of smoking around others, we predict an even greater rise in people seeking nicotine pouches as a better solution around this, to avoid imposing on others. For example, parents wanting to avoid smoking around children, people during their travels or even workers heading back to the office. ZYN is America’s number one selling nicotine pouch and as UK consumers become more familiar with the product, retailers will need to think about stocking more products like ZYN in their range.”
As a relatively new category, education around tobacco-free nicotine pouches is critical so every consumer can understand where, and when, it might be right for them. For this reason, it’s important to have visibility within store. ZYN offers a wide range of merchandising options to support a wide variety of retailers’ visual merchandising needs.
Additionally, education for both staff and consumers is key, driving trial via sampling to current smokers and vapers and following up with consumers.
ZYN also offers online training to its retail partners as well as in store advice from a ZYN representative. Retailers can also find out more on the product on the ZYN website, www.zyn.com/uk/en/.
The category is still in its infancy in the UK, therefore ensuring the range is visible in stores and education on the products are key factors to maximise sales, so that consumers can be made aware of this alternative and can try a product that could better suit their lifestyle. ZYN offers a range of merchandising solutions from clip strips to counter displays as well as posters and other in-store materials.
“ZYN is the number one selling nicotine pouch in the USA, and in the UK we’ve seen strong growth across the market, so retailers must ensure they retain their customers by stocking ZYN in order to meet their demands,” adds Griffin.
Laith Sheena, Sales Director, IVG UK, comments: “Fruit flavours have increased significantly in popularity since the menthol ban; whilst Tobacco and Menthol vape products are still popular, in many key retailers they are no longer in the top 3 selling skus.”
IVG’s best-selling products are IVG Bar and IVG 10ml Nic Salts.
V2 of the IVG Bar is due for launch December 2021 which includes a ‘Price-Marked-Pack’ range and will deliver a greater consumer experience; more puffs and more flavour.
The brand has seen unprecedented demand for IVG Bar and has seen significant growth in its 10ml business across the Vape Sector in the UK and internationally over the past 6 months.
“Work with the right brands; the ones that are forward thinking, offer choice and most importantly work with businesses or brands that are doing the right things; for example Disposable products should only be sold if they are MHRA Notified and TPD compliant,” suggests Sheena.
IVG has a vast array of POS material including CDU’s (various sizes), A1 Swing Boards, Flavour Brochures, Window Stickers and NO2MINORS free print material.
“Choice is key,” adds Sheena. “Ranging products that satisfy both smokers and Vapers as well as ‘dual users’ is crucial to growth. A typical ‘Category’ offering would be a section of MTL hardware and accessories, DTL hardware and accessories, Disposable devices, and a strong 10ml e-liquid offering including a Nic Salt offering as well as a smaller range of shortfalls (50ml shortfills for example).”
“We aim to ensure that when we range an IVG range or product with a retailer, that the service and support that is provided is alongside is unmatched,” says Sheena. “We have some of the best POS and display solutions in the market, all provided for.”
IVG also has a dedicated Marketing team who are constantly focused on generating consumer demand.”
“We are already seeing significant growth off the back of the ‘Disposable Boom’ – we are part of a very dynamic category that is always changing so the ‘next big thing’ could come at any point; as long as retailers are working with the right partners in this category, they will be well prepared for the changes to come,” Sheena adds.
Irshad Kara, Chief Executive Officer at NZO Vape, comments: “Following the ban we have noticed an increase in the demand for menthol flavours of our products. NZO Menthol 20mg is currently our best-selling SKU in Sainsbury’s, and so we are introducing the 10mg SKU to extend this choice. NZO is also launching Mixed Berry Menthol; with trends constantly changing the introduction of a fruit menthol caters for both the flavour conscious and menthol users.”
With the ever growing market of closed pod systems being competitive, NZO is investing heavily in retailer education via its innovative field team, taking a true category approach.
“As with many categories, consumer education is at the forefront with a well-designed and pre-planned display system being important for retailer success,” says Kara. “We believe that the next 12 months are key for the closed pod system market with education , value and fixtures being critical to it’s success. Bringing your ‘Smoking Alternatives’ offerings together in to one compact display solution allows the consumer to make an informed decision when visiting stores.”
nzo has partnered with Vape Stop, the UK’s leading total category solution, supporting the biggest brands in the market.
These free-of-charge gantrys provide retailers with a hassle free sales tool which is suitable for most stores and supported by a simple ordering process, offering direct, wholesale, phone and online support to suit retailers buying habits.
“We anticipate the demand for choice will continue over the next 12 months – closed pod systems will accelerate in the coming years due to the ease and convenience that this option offers to both current vapers and those looking to make the switch from traditional cigarettes,” adds Kara. “We see the need for more flavour choice and why NZO continue to partner with leading vape brands but we also are investing in a nzo open-pod-system to aid the consumer journey from closed-pod-systems to supplement the new NZO 10ml range – increased flavour profiles bridge the gap for the vaper and smoker.”
Chris Kelly, CEO, Phoenix2Retail, comments: “It’s clear to see from tracked channel data that both grocers and convenience stores sales increased dramatically during the lockdown period. It’s also interesting to see that even after the lockdown these sectors have held onto quite a bit of the share, leaving them with an overall net growth in the category.”
Phoenix2Retail has introduced a total category solution through Vape-Stop. Vape-Stop delivers the best performing brands according to IRI and Nielsen data. Furthermore, the unit is free to install, and a platform for easy refill and ordering has been created for retailers. Through this solution, Phoenix2Retail also offers ongoing support, education and training to all team members.
“Retailers need to ensure they have a total category solution at hand that gives the customer access to the leading brands. This takes the guess work out of which brands to choose, and ensure the retailer can offer exactly what they customer wants from their vape offering,” suggests Kelly.
Phoenix2Retail provides a total category solution through Vape-Stop – everything a retailer needs, with as little effort as possible. This means retailers get the best brands, as and when they are trending and selling well, informed by verified market research and industry analysis. This makes it so much easier for a retailer to enter the category and be immediately successful. Coupled with ongoing training, support and education, the retailer can rest assured that the vape category can start working for them.
“We believe now more than ever people are looking for a less harmful and healthier outlook from all parts of life,” adds Kelly. “People will look for less harmful alternatives to combustible tobacco and I believe the development of range within convenience throughout lockdown positions retailer to grow the category.”
Micaela Sangiovanni, Senior Trade Marketing Manager at RELX International, comments: “Consumers are showing an ever-growing interest in switching from cigarettes to vape devices, particularly closed-pod systems, and the pandemic has only accelerated this transition.”
Data shows that closed-system vapes are gaining traction at the expense of their open-system counterparts. With an estimated CAGR (Compound Annual Growth Rate) of 17.70%, the growth is significantly faster than the open system’s 2.60% CAGR (Euromonitor International, 2020).
RELX International exclusively stocks closed pod systems, in line with the growing trend.
Its top performing device is the RELX Essential (£9.99). Since its launch in 2020, it has seen a 125% increase in sales when compared to the same period last year. RELX Essential is an affordable device complete with a SuperSmoothTM vapour system and leak-resistant technology.
RELX Essential comes in eight colours including red, green and neon purple, as well as new options, steel blue and blue glow.
In line with consumer demand for a simple to operate system, RELX will be launching a new starter kit in December, inclusive of a RELX Essential device and RELX flavoured pod. The entry level offer is priced at £8.99.
The brand has vastly increased its portfolio of flavoured pods. In 2021 RELX stocked 10 different flavoured pods, since then it has increased to 25 SKUs. RELX plans on continuing this expansion and will finish the year with 28 SKUs, including Classic Tobacco and Peppermint.
“People are increasingly looking to switch from cigarettes to vape devices, and the pandemic has only accelerated this transition, with more consumers showing an ever-growing interest in alternatives,” adds Sangiovanni. “As coronavirus restrictions ease and people become more social, we anticipate existing adult smokers will continue to look for sleek, ultra-compact devices which can easily be stored in a pocket or bag.”
Tom Curle – Marketing Director at 4nx, comments: “Consumers are looking for more pocket friendly smoking alternatives, this is not just about the size of the packaging. The need for a cost conscious brand is paramount post COVID, as many consumers will now look to save money on their weekly shop whilst still being conscious of their health and wellbeing. 4nx is positioning itself to be disruptive to the market, with a RSP of £5.00. The aim was to create a high quality product while making it affordable to the consumer and attractive to the retailer with up to 55% margins.”
4nx has launched three flavours of Mint 6mg, Icy Mint 10mg and Arctic Mint 12mg, with more flavours coming in 2022. Each pack containing 20 slim nicotine pouches packed with intense flavour.
Having launched in WH Smith Travel this May, followed by staged launches into the grocers and wholesalers in next 12 month, 4nx is predicting to be available in 3,000 stores by the end of 2021. 4nx is looking to embark on a unique digital marketing campaign from the start of 2022.
4nx is investing heavily in retailer education via its field team.
“As with many categories, consumer education is at the forefront with a well-designed and pre-planned display system being important for retailer success,” says Curle. “We believe that the next 12 months are key for the oral pouch market with education, value and fixtures being critical to its success. Bringing your ‘Smoking Alternatives’ offerings together in to one compact display solution allows the consumer to make an informed decision when visiting stores.
“With menthol cigarettes now banned, we expect shoppers to seek out menthol nicotine alternatives. We intend to meet this demand via the introduction of our Mint oral nicotine pouches, offering a true mint experience for consumers that provides a nicotine delivery with the mint sensorial experience. As the brand develops, we will continue this mint and cool flavour profile approach to ensure we cater to all consumers’ needs.”
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