JUUL has a big mission: to transition the world’s one billion adult smokers away from cigarettes.
After the brand’s foundation in the US in 2015 it rapidly rose to become the country’s most popular e-cigarette by the end of 2017 with a market share of 72% by September 2018.
The brand was launched into the UK in 2018 and is now distributed across all multiple retailers.
John Patterson, Sales Director UK at Juul Labs, talks to Grocery Trader about the growth of the UK vaping market and how JUUL has been the major growth driver in the category.
Can you tell us a bit about the history of JUUL?
Juul Labs was set up in 2015 by two smokers in the US looking for an alternative to combustible cigarettes. Juul Labs entered the UK in July 2018, initially selling on its own platform (juul.co.uk) and selected specialist vape stores. November 2018 saw the brand enter the grocery channel with listings in Sainsbury’s before expanding distribution to all multiple retailers and key retail accounts throughout 2019.
How is the UK vaping/next generation products market performing? Is it in growth and what is driving the growth?
Data from industry analyst IRI shows that the vaping category continues to increase significantly in traditional retail with a 27% increase in sales from March to May compared to the same period last year. Given that many high street and travel retail stores have seen sales fall due to lockdown and lack of footfall, this growth has been driven almost exclusively by the multiple retail and convenience channels. Multiples, high street and travel retail still account for two thirds of vape sales in traditional retail channels and is an incredibly important channel for Juul Labs UK.
The market is divided into open and closed systems. Which of these two subsectors has the biggest market share and which is growing more?
If we look at the total tracked market, open systems has the largest share with a 47% share of the market; closed systems has 38% and disposables have 15%. When we take symbols and independents out of the equation, then there is almost parity between open and closed systems with each having around 39% of value sales. However the major multiple retailers have been the driving force in the closed pod sector and this has led to closed pods now accounting for over 60% of sales in this area and fuelling 80% of category growth.
The government set a target for England to be smoke-free by 2030. Is the smoking rate declining fast enough to meet that target?
The latest data from ONS shows that smoking prevalence among adults in England is the lowest of all nations in the UK at 13.9% with the average for the UK being 14.1%. Over the last eight years smoking prevalence has fallen by under 6% so to reach the Government’s smoke free target of under 5% by 2030 will be a challenge. In the past few years, the proportion of adult smokers in England has fallen by half a percentage point each year so if the current trajectory continues the smoking rate will be closer to 8% than 5% come 2030. The ban on menthol cigarettes, which accounted for around a quarter of all cigarette sales, may have encouraged more adult smokers to quit smoking but the data is not available yet to support this.
However, Juul Labs remains committed to working cooperatively with regulators, public health officials, and other stakeholders to appropriately introduce new products that meet the needs and preferences of a broad range of adult smokers, while limiting appeal to underage individuals, to ensure that we eliminate combustible cigarettes. To be clear, we believe smokers should first and foremost quit. But those who cannot successfully quit should completely switch to potentially less harmful alternative nicotine products.
What is JUUL’s share of the UK vaping/next generation products market and are JUUL’s sales and market share growing?
According to data until the end of May, JUUL is the number one vape brand by value – less than two years after the brand was introduced into the UK. The same data also confirms JUUL as the major growth driver in the category, responsible for 46% of all growth in the category.
Can you describe what products you have in your range?
JUUL is a closed pod system: it comprises a JUUL device into which you place non-refillable JUULpods. We have a Starter Kit that contains the device, a USB charger, information leaflet and a choice of four flavoured JUULpods so adult smokers can trial a range of flavours and choose their preferred option. In addition, we also sell the USB charger and device as separate SKUS. Our JUULpods come in a limited range of flavours aimed at adult smokers and are available in Glacier Mint, Menthol, Golden Tobacco, Mango Nectar and Alpine Berry flavours. Each pack of JUULpods contains four pods and has a RRP of £10.99.
Do you have any NPD this year?
We have already launched a menthol JUULpod variant in April this year which has been the most successful vaping launch of the year in terms of sales (IRi Total Market – Value Sales to 21st June 2020) and we will be looking to add to our JUULpods range soon.
In what outlets are your products distributed?
Our mission is to transition the world’s one billion adult smokers away from cigarettes and eliminate their use while combating underage usage of our products. In order to do this, we have to be available in stores where adult smokers purchase their cigarettes. JUUL is therefore available in all store formats and online operations of the leading multiple retailers, Co-ops, travel retail and symbols and independent retailers.
How do you raise awareness of your products? What campaigns are you running?
JUUL products are for adult smokers only. We offer a range of point of sale materials and display solutions for retailers to signpost the brand in-store.
How do you combat underage use of your products?
An integral part of our actions in combatting underage use is our Challenge 25 programme at retail level. Put simply, every retailer wishing to stock JUUL, regardless of size, has to sign up and adhere to Juul Labs’ Challenge 25 age verification programme. The process makes it mandatory for retailers to seek identification for anyone trying to purchase JUUL products and appears to be under 25 to prove that they are over 18 – the legal age to purchase vaping products.
Through our compliance partner Serve Legal, we mystery shop trade partners across all channels and offer training to retailers and stores on age-verification processes. While we offer training to stores who fail mystery shopping visits, we will not hesitate to suspend supply to retailers who fail our mystery shopping programme on three consecutive occasions.
With regard to products, we ensure our packaging has no cartoons or images that might attract an underage audience and we are working with regulators and stakeholders to mandate similar responsible practices across the industry. As a company we do not operate on social media platforms and actively look to challenge and remove content from external/third party social media handles that promote misuse of our product.
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