With dozens of product launches and new brands appearing on scene in recent months, the vape and next generation nicotine category is one of the most compelling in convenience today.
From the billions (yes, billions) of dollars invested by the biggest players to the emerging brands that are adding innovation and choice to the nicotine market, suppliers are creating a fast-growing category that provides a long-term solution to industry concerns about declining tobacco sales in the coming decades.
It isn’t only suppliers who are excited about the opportunity that vape presents to the industry – wholesalers are also getting in on the action.
“The vape category has shown tremendous growth and is continually evolving, which makes it a real challenge to get the most out of it,” says Kenton Burchell, trading director at Bestway Wholesale. “We know many retailers struggle with the variance of devices and liquids in the market and also have stock from all sorts of sources, much of it given to them free. This can result in them having an incoherent range or products - particularly devices that become obsolete.”
Despite the challenges, Burchell says that stores are increasingly seeing the profit opportunity in vape and deciding to invest the time and space needed to capitalise.
“Ever more retailers are seeing the benefit in offering a core range of pods and liquids that will satisfy most vapers’ needs. We can see this category continuing to grow as more and more smokers see the health, not to mention financial, benefits of switching to e-cigs from tobacco. More and more retailers also see the profit opportunity that is well worth the investment in time and space in store needed to understand the category and get the most from it.”
Operating during a pandemic
It’s both a cliché and a fact that most convenience categories have been hugely affected by the coronavirus pandemic. It is important to remember that 2020 has also seen the arrival of the menthol ban. Finding time to build and manage a vape range has therefore been a challenge for many store owners Asian Trader speaks to each week. Yet, according to the industry, the numbers suggest focusing on vape is paying off for retailers.
“The vaping category has experienced solid growth in the past few years,registering significant double-digit growth each year,” says John Patterson, Sales Director, Juul Labs. “More recently, if we look at sales this year, in the twelve weeks pre and post the removal of menthol cigarettes, IRI figures show the vaping category in tracked channels grew by 12.6 percent –but it is the closed pod category that is driving the majority of the growth. Indeed, these figures show JUUL, in particular,experiencing growth of 65 percent and being responsible for over a third (37 percent) of all growth in the category.”
Pod mods are convenience-friendly
According to some suppliers there are areas of this broad market which overperform within convenience, where a different mix of customer types is reflected in sales.
“Closed pod refills and e-liquids tend to work best in convenience, given they are pre-mixed and simple to use, and should form the majority of space on the fixture, with at most 20 percent given to hardware,” says John Patterson. “Smokers tend to buy the same products from the same stores, so offering them a range of refills for the best-selling closed pod devices and a range of e-liquids for open systems – in the same stores where these smokers purchased their cigarettes – is the best way to grow the category in convenience stores.”
The podmod market has become an engine of innovation for the industry in recent years and 2020 is no different. One eye-catching launch has been the arrival of EDGE Hybrid which combines capsule vaping with the traditional filter found in ready-made cigarette sticks. The product is designed to provide the familiarity smokers need to jump from combustible tobacco towards vape. Flavours included in the system include Tobacco, Very Menthol and Blackcurrant.
The company says: “Born out of consumer demand, EDGE Hybrid is a next generation product that bridges a significant gap in the market… According to research 60 percent of smokers are wanting to quit but 37 percent of those who have tried vaping but dislike the hard, unfamiliar mouthpiece.”
EDGE Hybrid filters also feature a cigarette-style crushball.
One new brand that is looking to find a place in this fast-growing market is RELX, a brand that already has an established footing in the Asian vape market. The RELX Infinity device features a ceramic coil that helps to provide a “SuperSmooth” experience for vapers.
Micaela Sangiovanni, senior trade marketing manager at RELX:“Infinity and Essential ceramic pods offer 1.9ml nicotine and last around 500 puffs based on average consumption. They are the only pods in the market designed with the SuperSmooth feature which provides rich and dense vapour with just the right temperature, appropriate draw resistance and a quiet inhaling experience, giving users a consistently smooth and familiar experience from start to finish.”
Of course, alongside these new players, the capsules market has a set of established big players which have continued to invest in their brands in 2020, from JUUL and Myblu to Logic Compact and Vype.
Display advice
For a category that can seem filled with new jargon and fast-changing product ranges, there is at least some recognisable and simple category management advice that will help stores boost sales. And this includes how to position a vape display:
“Shoppers are often drawn to products displayed at eye-line to help attract their attention, we’d recommend placing devices at this level, and then the supporting brand e-liquids or accessories on the shelves above and below,” says Duncan Cunningham, UK corporate affairs director at blu. “Low margin products, or cheaper brands, should be placed on the lower shelf, with higher margin products above the devices.”
One other familiar tool when constructing an effective display is brand blocking, says Cunningham: “Grouping the respective brands together in a well-organised display will help to create further shelf-appeal for products, as well as making it easier for staff to locate products for quick service and maintain stock levels.”
As display is such a key way for firms to develop their own brand recognition, it is an area where suppliers of all kinds are willing to lend a hand.
“We have a full range of proven point-of-sale display solutions, which help to drive sales; from counter-top units (CDUs) taking a small footprint in prime positions, to compact-yet-impactful free-standing display units (FSDUs), or even full vape walls to really make an impact,” says John Taylor, chief marketing officer at Dinner Lady vapes.
And if one solution doesn’t meet a store’s needs, companies such as Dinner Lady are happy to come up with something bespoke. “We can customer-design materials for your specific space, by working with our in-house designers, to best suit the retail environment,” Taylor adds.
Focusing on new flavours
With flavour such a vital component of this market, it has understandably become a focus of product development.
“We believe that in order to successfully transition adult smokers away from cigarettes, products have to appeal to adult smokers, be satisfying and replicate their previous cigarette choices,” says John Patterson at Juul. “We launched Menthol JUULpods in April to offer adult smokers, particularly those who preferred mentholated cigarettes a wider range of alternatives. Our latest launch of Rich Tobacco JUULpods addresses the desires of adult smokers who prefer the flavour profile Virginia tobacco, the blend used in nine out of every ten cigarettes sold in the UK. while Menthol JUULpods is the most successful launch this year in terms of value sales.”
Duncan Cunningham agrees that menthol is now key. He says: “The range of devices on offer should always be supported with a strong portfolio of e-liquids, especially fruit and menthol flavours, in a variety of nicotine strengths, including nicsalts like MyBlu Intense, to cater for all tastes. 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.”
Getting the right flavours to vapers is just as important in the more specialist e-liquids market. “The development of flavours is only limited to the creativity of the mixologist,” says Luke Van Dijk, sales direct at Flavour Warehouse, brand owner of Vampire Vape. “It is possible to replicate most imaginable flavours. However, that does not mean that all flavours become popular to vape. Throughout our eight years of manufacturing, we have seen many flavour trends but ultimately, it’s always the core fruit, menthol and tobacco flavours that remain the most popular.”
While the bestsellers are clear, major brands are following specialist e-liquid brands in creating ever more eye-catching flavours. One such flavour comes from BAT’s Vype range which recently launched a Tequila Sunrise e-liquid, which the company describes as an “adult-appropriate beverage-inspired” flavour.
Evolution of e-liquids
There is so much focus on podmods or capsule systems that it can be easy to forget that open systems remain at the heart of many stores’ vape sales. As with other areas of this market, the e-liquids sector is changing fast thanks to the pace of innovation.
“The two major liquid developments in recent years have been both the emergence of nicotine salts and the increase in menthol tobacco flavours resulting from the recent menthol tobacco ban in May 2020,” says Luke Van Dijk.
Nic salts, for the uninitiated, is an alternative to the more traditional freebase nicotine used in most e-liquids. Nic salts are understood to have a quicker body absorption rate,making them ultimately more suited to recent ex-smokers who are looking to maintain the nicotine “hit” associated with tobacco.
Nic salt e-liquids are now ubiquitous across e-liquid brands big and small and have also moved into the capsules market with the likes of myblu Intense and VypevPro cartridges.
Heat not burn
This segment of the “next generation nicotine products market” has been so far something of a slow burner. Not anymore.
This month has seen the launch of JTI’s Ploom system, currently available in just 30 London stores after the 30 vape specialist businesses (and two JTI-run Ploom “lounges”) were forced to close within days of the launch due to lockdown.
Ploom is the first competitor to Philip Morris’s IQOS system and features a new shape, promising a no-puff limit experience. The system uses EVO sticks, the equivalent of IQOS’s HEETs, which retail at £4.50 per pack of 20.
Nick Geens, Head of Reduced Risk Products at JTI, says: “It is predicted that by 2025 there will be nearly one million Ploom users nationwide and that traditional retail will contribute to two thirds (67 percent) of this volume.”
While the plan is to launch Ploom gradually, starting solely in the capital, stores which wish to stock the system are encouraged to speak to their JTI rep.
IQOS, meanwhile, isn’t standing still. The company has launched Sienna Caps. The company says: “Sienna Caps HEETS offer the rounded, toasted tobacco blend of Sienna Selection with its woody and light tea aroma, which in a click delivers a cooling menthol breeze with notes of zesty mint.”
With BAT’s Glo heat-not-burn system launching in multiple European markets in 2020, it is likely that 2021 will be a big year for the sector.
Pouches
Another area of this market which has developed substantially during 2020 is nicotine pouches.
One brand to emerge is Swedish Match’s ZYN pouches which the firm describes as “a modern way to enjoy nicotine, free of smoke and free from tobacco”.
“This enables you to have your nicotine wherever, whenever: at the pub with friends, during a business meeting or at home. Always stay present in the everyday moments. Now you can”, says Paola Midence, Swedish Match Brand trade manager Europe.
The product is already available in independent stores but its market position was recently boosted by being listed in almost 1,300 Sainsbury’s stores.
British American Tobacco is also investing heavily in the pouch market with the recent launch of its VELO brand in the UK. Flavours include Polar Mint, Tropic Breeze, Ice Cool and Urban Vibe.
JTI’s Nordic Spirit and Imperial’s ZoneX have also launched over the past 12 months, making this one of the most vibrant segments of the next-generation market.
That there is so much activity in this market – across each of its individual segments – is further proof that this is a category that now demands attention of stores of every kind. Only one question now remains: What are you waiting for?
The government on Friday announced that they will introduce new Respect Orders as part of the Crime and Policing Bill.
The measure, a modernised version of the anti-social behaviour orders that were introduced by the last Labour Government, is aimed at the most serious offenders who plague town centres and neighbourhoods with anti-social behaviour.
The Respect Orders will give the police and local councils powers to ban persistent offenders from town centres or from drinking in public spots such as high streets and local parks. These will be piloted prior to national rollout to make sure they are as effective as possible.
Perpetrators can also be required to address the root cause of their behaviour by being mandated to undertake positive rehabilitation, such as attending drug or alcohol treatment services, or an anger management course to address the underlying causes of their behaviour.
Failure to comply with Respect Orders will be a criminal offence. Police will have the ability to immediately arrest anybody who is breaching their Respect Order.
“Antisocial behaviour chips away at communities’ sense of confidence and pride, undermines local businesses and can have a devastating impact on victims,” Yvette Cooper, home secretary, said.
“This cannot be allowed to continue. Respect Orders will give police and councils the powers they need to crack down on repeated anti-social behaviour, keeping our communities safe and ensuring repeat offenders face the consequences of their actions.”
As well as prison sentences of up to two years, criminal courts will also be able to issue unlimited fines and community orders, such as unpaid work, and curfews as punishment for breaching a Respect Order.
Retail trade union Usdaw has welcomed the announcement, terming it as key step to tackling the epidemic of retail crime.
“After years of the Conservatives effectively decriminalising retail crime, leading to a more than doubling in shoplifting since the pandemic, we now have a government that is delivering on its promise to bring town centre crime under control,” Paddy Lillis, Usdaw general secretary, said.
“We very much welcome the announcement of new Respect Orders to tackle repeat offenders who terrorise shops and high streets, striking fear into the hearts of retail workers whenever they enter the store.”
Ecco+, another pre-Horizon IT system that was introduced to post masters between 1992 and 1999, was also likely to be faulty due to which hundreds of sub postmasters were prosecuted by the Post Office, a leading sub postmaster representative has said.
Speaking to Asian Trader today (22), Calum Greenhow – Chief Executive Officer at National Federation of Sub Postmasters (NFSP) stated that Ecco+ system that was introduced between 1992 and 1999 also created problems for sub post masters.
Greenhow said, "Apart from Capture that came in pre-Horizon time, there was another one called Ecco+ that was in operation between 1992 to 1999. Within that period, (I have learned just in the last few days) post office brought about 334 prosecutions over an eight-year period."
He added, "We have heard so much about Post Office carrying out prosecutions during the Horizon. The fact is, they carried out prosecutions prior to Horizon as well, to near enough the same number and to the same degree. So we're talking about a prosecution regime over a 32-year period, not a 25-year period. Their attitude against sub postmasters and their own staff has been prevalent for well over 30 years," he said.
The NFSP last month wrote to the minister in charge of the Post Office requesting a review of problems experienced by users of Ecco+. With Ecco+, there were fewer prosecutions based on the systems reporting shortfalls, but instead, some users “were either dismissed or forced to resign, leading to severe financial consequences”.
A Department for Business and Trade spokesperson said, “The possible issues relating to Ecco+ have been brought to our attention following the independent investigation into Capture. The Department is looking into the issue.”
Last month, on being asked by Computer Weekly for details on the Ecco+ systems, Post Office said, “We don’t have the information you’ve asked for about Ecco+ to hand, and so if you would like to pursue this, we would recommend you submit a freedom of information request given that the subject matter dates back some 30 years and that is the most appropriate route to conduct searches.”
Ecco+ is the second pre-Horizon system that has come under scanner. Earlier this year, an independent forensic analysis, commissioned by the government in May, reported that IT system Capture had bugs and glitches and there was a reasonable likelihood it had caused cash shortfalls too.
According to latest reports, at least eight convictions predating the Horizon Post Office scandal are being looked at by Criminal Cases Review Commission (CCRC) investigating potential miscarriages of justice after being affected by Capture software.
Lord Beamish, the former Labour MP Kevan Jones, has been supporting victims and is calling for the government to extend current legislation to automatically quash convictions.
"The government are going to have to take this seriously," he said. "We can't have a situation where we have a two-tier system where people get exonerated from Horizon and the Capture cases are either forgotten or have to go through a very lengthy legal process to get their names cleared."
Lord Zameer Choudrey CBE SI Pk, Chief Executive of Bestway Group, and Dawood Pervez, Managing Director of Bestway Wholesale, presented a cheque for £100,000 to The Duke of Edinburgh’s Award (DofE) at Bestway Group’s Head Office in Park Royal, London last week.
This significant contribution reflects Bestway's ongoing commitment to supporting impactful charitable initiatives that make a difference to the lives of young people across the UK. The presentation was attended by Ruth Marvel OBE, Chief Executive Officer, Laura Puddefoot-Knaggs, Head of Philanthropy and Clare Harris, Senior Relationships Manager from The Duke of Edinburgh’s Award, and Bestway Board of Directors, including Sir Anwar Pervez OBE H Pk, Chairman Bestway Group.
The £100,000 being donated to The Duke of Edinburgh’s Award was raised through Bestway’s annual Ascot Charity Race Day held in June this year (2024), which was attended by over 750 of Bestway’s key business contacts, supplier partners, colleagues, press and the charity. Each year the company hosts a charity race day at Ascot to raise funds for charity, an event that celebrated 31 years this year.
The Charity Race Day is one of Bestway Wholesale’s largest corporate events in the calendar, supported by supplier partners for over 30 years. Over 27 charities have benefited from funds raised through the event since it began in 1994, including The Duke of Edinburgh’s Award, widely recognised as the world’s leading youth achievement award.
Lord Choudrey explained why the business has chosen The Duke of Edinburgh’s Award as its charity partner this year:
“Charity is at the core of what we do at Bestway, and our annual Charity Race Day cements the ongoing work to such great organisations such as The Duke of Edinburgh’s Award by our family.
“We have worked with The Duke of Edinburgh’s Award for over 30 years and take great pride in the Gold Partner status we hold. During this time we have experienced first-hand the incredible work the charity does in preparing our young people for the future in whatever role they undertake.
“The Duke of Edinburgh’s Award inspires and empowers young people, supporting them as they learn new skills, overcome obstacles, whilst helping them build confidence and resilience. This charity ties in with our other efforts to recognise the importance of supporting initiatives that invest in the future of our youth.”
Bestway Foundation was established by Sir Anwar Pervez in 1987, as the charitable arm of the Bestway Group, with a philosophy to support less fortunate people through the advancement of education and healthcare. Since inception Bestway Foundation has donated more than £35m to charitable causes, including donations to charities, hospitals and schools as well as the funding of university scholarships. Bestway Group has donated more than £15 million to the Bestway Foundation in the UK.
Dawood Pervez, Managing Director of Bestway Wholesale, said: “We are delighted to support the work of The Duke of Edinburgh’s Award which has seen participation in the Award grow every year since inception. Millions of young people from across the UK in schools, community groups, young offender institutions and workplaces have had the opportunity to build resilience and gain lifelong belief in themselves through the DofE.
“Understanding that our donation will help young people to challenge themselves to attain standards of achievement and endeavour in a wide variety of active interests – to serve their communities, experience adventure and to develop and learn outside the classroom, really aligns with the values of The Bestway Foundation.”
“The Annual Ascot Charity Race Day is just one of the ways that Bestway Foundation gives back, and we are incredibly grateful to our supplier partners and colleagues for supporting this annual event and donating generously to ticket purchases, the Charity Auction and other fundraising activities.”
Alex McDowell, DofE Fundraising Director, commented on the donation:
“We are delighted to receive this incredibly generous donation to support the DofE’s vital work. The money raised will support the charity’s Resilience Fund which offers free DofE places, bursaries or additional support for marginalised young people facing barriers to participation including financial constraints, additional needs or caring responsibilities.
“The DofE equips young people with the skills, confidence, and self-belief to help them take on today’s toughest challenges. We want to ensure every young person has the chance to take part, no matter who they are or where they live. This generous donation will enable us to continue reaching more young people with a life-changing DofE.”
The Lord Choudrey concluded:
“Charity is at the core of what we do here at Bestway – we are extremely dedicated to our social responsibility and incredibly committed to giving back to the communities within which we operate.”
As we head into the busiest time of the year for the grocery industry, GroceryAid is urging people to reach out to them if they find themselves struggling.
The charity helps grocery workers and their families through difficult times and offers a range of financial, emotional and practical support. This includes support for people facing stress, anxiety, low mood or loneliness, as well as debt advice and impartial financial support through GroceryAid’s online financial hub.
“The festive period is a golden time for the sector but of course, along with an increase in trade comes an increase in pressure," said GroceryAid CEO Kieran Hemsworth. "Across the industry, workers are stepping up the pace to keep shelves stocked and customers happy. We know this can sometimes lead to feeling overwhelmed, especially when everything else, from social engagements to family responsibilities are also at full throttle.
“This is a reminder that if you’re struggling this year, we are here for you.”
GroceryAid’s free confidential Helpline is available 24/7, 365 a year and is answered by trained counsellors – even on Christmas Day. Call 08088 021 122 or visit groceryaid.org.uk/get-help
Leading wholesale buying and marketing group Sugro UK has collaborated with Britvic Soft Drinks, a global organisation with 39 much-loved brands sold in over 100 countries, to launch a groundbreaking Fast Food Sample Box.
The sample box is specifically designed for ICS UK LTD customers, giving them a unique opportunity to sample and experience new Fast Food soft drinks offerings firsthand.
The new Fast Food Sample Box offers ICS customers an exclusive opportunity to explore a curated selection of Britvic's best-selling and new product offerings that drives incremental sales. This trial initiative is designed to provide Fast Food retailers with a hands-on experience of market-leading products, helping them identify key opportunities for growth in the Fast-Food soft drinks categories.
Sugro UK's Fast Food Sample Box represents a pioneering approach to boosting customer engagement, providing tailored solutions that meet the evolving demands of today’s consumers. This initiative is the first of its kind in the sector, giving ICS customers exclusive access to products that are proven to drive sales and offering them a competitive edge in their local markets.
Alice Graham, GB Head of Dining Route to Market Wholesale, "We are delighted to collaborate with both Sugro and ICS with this initiative. The fast-food market has seen double digit growth over the last few years and the growth is set to continue. This initiative with ICS, a leader in fast food wholesale, underscores our commitment to supporting the growth of Britvic brands and advancing our partnerships with fast food establishments.”
Sid Musa, Manager at ICS (UK) added, “At ICS UK LTD, we are thrilled to partner with Sugro UK and Britvic on this industry-first initiative. The Fast-Food Sample Box gives our fast-food customers a unique opportunity to experience top-tier products firsthand, empowering them to make informed decisions that can truly elevate their offerings. We’re confident this exclusive initiative will help our customers stay competitive and drive growth in an ever-evolving market.”
Yulia Petitt, Head of Commercial and Marketing at Sugro UK commented: “We are incredibly excited about the partnership with Britvic delivered with excellence by our member – ICS Ltd. Fast Food sector is a big part of the group commercial strategy, so we see it as a huge opportunity for the group.”
Sugro UK is proudly owned by its 90 plus independent wholesale members, with a combined turnover of over £2.5 billion. The group was recently voted number one across all buying groups in the recent Advantage Group Survey.