Convenience Stores May Collect One Billion In Sales From Electronic Cigarettes

One of the places where electronic cigarettes can be bought is a convenience store.  In fact, convenience store presence is one of the priorities of electronic cigarette companies.  With a lot of convenience stores throughout the US, it can be a major boost for a company’s sales if its products can be bought from these stores where most consumers usually buy their day-to-day stuff.

New Nielsen Data For Convenience Stores

From a recent data from Nielsen it is indicated that the sales of electronic cigarettes in convenience stores can reach up to $1 billion.  If the total sales would be computed and include online transactions, the amount could increase to $1.7 billion.

Nielsen is a company based in New York City. It is a global leader in terms of measurement and information.  Nielsen offers market research, data and insights on what people watch and/or purchase such as electronic cigarettes.

Leading Market Players

Bonnie Herzog is Wells Fargo Securities LLC’s managing director for tobacco, beverage and consumer research. According to her, the top player in convenience market is Blu Cigs from Lorillard Inc.  This statement was based from the Nielsen numbers that showed Blu acquired 39% of the dollar share in this particular channel.  Following Blu at second spot is Njoy with 30.1% share.  These figures were gathered from a 4-week period whose conclusion was last July 6.

If the basis of market share performance will be based on XAOC or extended all-outlet coverage also from Nielsen, Blu Cigs still maintained its top rank with 44.5% in market share.  Next in the XAOC channel is Fin with 20.6% market share; followed by Mistic with 11.7%. Njoy, however, landed at fourth with just 10.8% in the XAOC channel.

Latest Moves By The Market Leaders

To land on the top positions in the market is really a great accomplishment for electronic cigarette companies and manufacturers. This achievement would probably not come to fruition if they did not perform what marketing moves they need to do in order to lead in the market with very steep and intense competition.

In a recent second quarter call by Lorillard, it announced that Blu electronic cigarettes have indeed increased the company’s revenue. The company plans to continue making Blu number one. In fact, Blu is now available in about 100,000 various retail locations including the recent addition of 30,000 retails store distribution.  Coming this third quarter, Blu will be distributed to numerous retail outlets in Canada.

Meanwhile, Njoy has been heard and known to also make moves to expand to the UK. In the news, it can be read that Njoy is seeking to obtain PR and media support in order to promote its electronic cigarettes in UK.

The marketing move by FIN recently was the national television advertisement. During the start of this year’s second quarter, Mistic was launched and distributed nationwide in CEFCO stores. CEFCO is among the top 40 convenience stores in the US and Mistic electronic cigarettes can be bought from any of its 250 stores in seven various states.

Could Surpass Traditional Cigarettes

Herzog also stated that they believe that electronic cigarettes exceed traditional cigarettes within the following ten years. Combined profit pool can yield a compounded annual growth rate or CAGR of 7% over the following decade.

In Nielsen’s 4-week period research, the sales of electronic cigarettes increased 189.6%. This reflected a 1.2% growth rate over the same period in terms of total dollar sales in the US for cigarettes. During the same period last year and the last 4-week period, total cigarette sales were 1.3% and 1%, respectively.

The best results were posted in the unit sales or in their lowest decline in the previous 12 periods.  Herzog said that this was probably due to the moderation in net price.

Cigarettes recently had a price hike due to taxes. Now, a cigarette pack’s cost is with an additional six cents. Such increase in price has an impact that is reflected in convenience store data.  Despite this tepid price realization, Wells Fargo is expecting manufacturers’ net price to increase by 4% in 2013 fiscal year.  This could offset decline in volume and cause positive sales.  Still, the big three tobacco firms reportedly saw an increase in their market performance and revenue.

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