E-Cigarettes Entering Mainstream With Sales Nearing $1B: What’s Next?
They don't burn, produce smoke, or contain leaf tobacco. Advocates are saying it's for these reasons that e-cigarettes are becoming more socially acceptable, and the trend has securities analysts predicting that they'll soon hit the $1-billion mark in sales.
According to Wells Fargo analysts, e-cigarettes — battery-powered devices that emit nicotine vapors and flavorings through inhalation — have left the novelty realm behind and now sit comfortably in the mainstream. They currently make up only one percent of the total cigarette market; however, their growth is rampant. Overall, the rate of adults who are trying e-cigarettes has doubled since 2010, according to the latest estimates from the Centers for Disease Control and Prevention (CDC).
"E-cigarette use is growing rapidly," said CDC Director Tom Frieden, M.D., M.P.H. "There is still a lot we don't know about these products, including whether they will decrease or increase use of traditional cigarettes."
Roughly one in five U.S. adult cigarette smokers, or 21 percent, have tried an electronic cigarette, according to the CDC survey conducted in 2011, the most recent year the data was collected. That figure is up from 10 percent in 2010.
The boom is only at the beginning, some experts say. Given the added social acceptance in many places due to zero secondhand smoke, some sources are predicting e-cigarettes will reclaim 30 to 40 percent of the traditional cigarette market within five years. Many public places that ban cigarette smoke allow the electronic alternative.
However, not all places are as e-cig-friendly, one example being the Long Island Rail Road, which prohibits burning "a lighted cigarette, cigar, pipe or any other matter or substance which contains tobacco or any tobacco substitute."
Eli Alelov, CEO of LOGIC Technology, makers of LOGIC e-cigarettes, says that more than 20 million people will switch over within the five-year time span. This could generate $15 to $20 billion in yearly revenue, he says, noting that e-cigarettes are not taxed the same as regular cigarettes — meaning the profit margins are much higher.
"The states hate us, because they're losing money," he said.
Going forward, one question that still remains unanswered is whether electronic cigarettes are any less harmful than their analog equivalents. The CDC press release states although they have fewer toxins, that fact alone may not necessarily make them less harmful.
"If large numbers of adult smokers become users of both traditional cigarettes and e-cigarettes — rather than using e-cigarettes to quit cigarettes completely — the net public health effect could be quite negative," said Tim McAfee, M.D., M.P.H., director of the Office on Smoking and Health at CDC.
Moreover, some say the influx of e-cigarettes in public places sends the wrong message that all smoking is created equal.
"The use of e-cigarettes in public areas in which cigarette smoking is prohibited," the CDC report says, "could counter the effectiveness of [smoke-free compliance] policies by complicating enforcement and giving the appearance that smoking is acceptable."
However, Gregory Conley, legislative director at the Consumer Advocates for Smoke-Free Alternatives Association, highlights a defense that many e-cigarette advocates have maintained since the product's inception.
"It looks like smoking," he said. "So it must be evil."