A study published in JAMA Pediatrics found that e-cigarettes contributed to teenage nicotine addiction. E-cigarettes, which e in flavors like cherry, strawberry, and cookies & cream, are less harsh than cigarettes, making it easier for adventurous teenagers to pick up the habit. Moreover, the study showed that current smokers who had never used e-cigarettes were more determined to quit than those who had used e-cigarettes. Although scientists are far from reaching a consensus on the issue, these findings could put a damper on e-cigarette growth.The Food and Drug Administration has not yet released prehensive guidelines for e-cigarette regulation, but many states and municipalities are already clamping down on the tobacco-free devices. Bills in New York, Oregon, New Jersey, Washington, and a number of other states have proposed taxing and regulating e-cigarettes like other tobacco products.
High taxes, marketing restrictions, and public awareness about the health risks associated with smoking tobacco have led to a long-term secular decline in cigarette consumption in the U.S. The same factors could put a lid on e-cigarette growth.Altria has the most to lose from e-cigarette growth. It was the last of the big three U.S. tobacco panies to announce a nationwide rollout of its e-cigarette brand, and its 50% share of the U.S. cigarette market gives it a dominant share of the industry’s profits. Stunted e-cigarette growth would reaffirm Altria’s dominant position in the industry.Reynolds is in the same boat as Altria. Its Vuse e-cigarette has yet to gain wide adoption, while its Camel and Pall Mall brands bine for a 17.8% share of the cigarette market. All of the pany’s brands bine for a 26% share of the cigarette market.
Its revenue is largely dependent on Newport menthol cigarettes; Newport mentholated and non-mentholated accounts for 85% of Lorillard’s cigarette volume. Given pending legislative restrictions on menthol cigarettes, Lorillard’s small but growing e cigarette business is an important source of diversification.Nobody knows how e-cigarettes will be regulated; the rules have yet to be drawn up.Lorillard, on the other hand, stands to gain a meaningful new source of revenue if it can maintain a dominant share of a growing e-cigarette market.
Reynolds now declines to specify where its 5,200 U.S. workers are located, but in 2012 it reported that roughly 2,100 were in the Winston-Salem area.Farmers could fend off tobacco produced in countries where the labor was cheaper Like many other tobacco-related panies, it has seen its workforce drop substantially, from about 15,000 tobacco manufacturing workers in 1987 in the Winston-Salem area.The chance to reverse that erosion isn’t lost on Reynolds executives.It has developed an e-cigarette that, unlike nearly all its rivals, is made in the United States.”One of the things that I municate to my team is that if we’re successful, we see jobs happening here,” Cordisco said. “We’re bringing jobs back to this pany, and that’s what’s exciting.”
She declined to give employment numbers but said that RJR Vapor Co. has created jobs in several states, some within the pany, some with suppliers. In Kansas, it makes the cartridges. In its Tobaccoville manufacturing plex near Winston-Salem, it does the final packaging.For now, the number of employees working for e-cigarette panies is relatively small because the industry is small, said Herzog, the analyst.
“Just to put it in perspective, retail sales of e-cigarettes were $1.8 billion in the U.S. last year, estimated, and that pares to an $85 billion bustible cigarette market,” she said. “But I certainly expect that consumption of e-cigs will pass consumption of bustible cigarettes in the next 10 years, and as that trajectory continues, absolutely you’re going to see panies get larger and hire more employees.”
For now, most e-cigarette panies, including Lorillard’s Blu, have their devices made in China, though Blu gets its liquid from a pany in Wisconsin.Herzog believes that it’s likely others will follow Reynolds’ path and move the manufacturing to the United States, where they can better control quality. Federal regulations, which are widely expected to e soon from the U.S. Food and Drug Administration, may include standards that would push more panies to make e-cigarettes in the U.S., she said.The potential upside to e-cigarettes also may include farmers.
For much of tobacco’s history in North Carolina, the state’s climate and soil were natural advantages that helped them produce a product of high quality and good taste.