E-smokes no joke

 It’s enough to make Joe Camel cry.

Reynolds American, the No. 2 US cigarette maker, announced plans yesterday to roll out a national e-cigarette brand — as sales of traditional tobacco smokes continue to slip.

Reynolds, whose brands include Camels and Pall Mall, said its e-cig brand, Vuse, would roll out first in Colorado in July and then in other states.

The move comes as sales of tobacco-based smokes fell 4.5 percent in the first quarter, according to a Morgan Stanley report.

Meanwhile, e-cig sales are forecast to double in 2013, to about $1 billion.

While e-cig revenue pales in comparison to the $80 billion traditional cigarette market, at least its sales, so to speak, are on fire.

Revenue at Reynolds American has been relatively flat at about $8.4 billion since at least 2009 — and is expected to see little increase through 2014, according to Wall Street estimates.

So as America falls out of love with Joe Camel, Reynolds, it would appear, had little choice but to jump into the e-cig business.

“Vuse has been designed to offer the affordability and convenience of a disposable e-cigarette, while providing ongoing cost savings and reduced environmental impact by being rechargeable,” Stephanie Cordisco, president of R.J. Reynolds Vapor Company, a unit of RAI, said.

They are priced at the equivalent of $3 a pack — well below the $11-a-pack cost of regular smokes.

E-cigs contain no tobacco and convert heated, nicotine-laced liquid into a vapor mist.

Users can have a puff indoors without causing a stink.

Reynolds, at a press conference yesterday in New York, would not disclose profit projections or even give plans for rolling out Vuse nationwide.

Vuse will be sold over-the-counter at drugstores in single packs called Solos, which would include a cartridge, a rechargeable power unit and a USB charger. 

The Vuse System pack would contain three cartridges. The cartridges, which come in original and menthol flavors, would also be sold in packs of two.

“We designed Vuse to be as familiar as necessary and as different as possible,” Cordisco said.

Rival Lorillard bought the Blu brand of e-cigs last year. Altria is expected to introduce an e-cig brand later in 2013.

With its e-cig brand, which is not affected by the advertising ban on traditional smokes, Reynolds expects to return to TV advertising for the first time in more than 30 years.

Daan Delen, president and CEO of Reynolds American, speaking at a press event at Chelsea Piers, said that about 30 percent of adult tobacco consumers have tried an e-cig in the last six months.

“They’re trying, but few are converting,” Delen said.

Analysts at Goldman Sachs concluded last year that e-cigs have the potential to be an industry game-changer. 

Bonnie Herzog, an analyst at Wells Fargo, said earlier this year sales of e-cigs could surpass traditional smokes in 10 years.

Article Credit: www.nypost.com

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