Published on April 26th, 2013 | by Trick0
E-Cigs A Rapidly Growing Problem For Big Tobacco
Business Insider’s MoneyGame Chart of the Day is titled “E-cigarette Strength An Incremental Secular Volume Headwind (2013 MSe ~0.5%).” If that makes sense to you, then you can skip the rest of this post, because it probably says everything you need to know. If, like us, that title gave you a splitting migraine, we’ve done the work of figuring out what the hell it means.
What it shows is a chart from Morgan Stanley that tallies how much of the total cigarette market, including both analogs and personal vaporizers, is taken by e-cigarettes. It shows that e-cigarettes, while an insignificant share of the market in 2007 and 2008, have been growing exponentially in the last couple years. At current rates, David Aldeman of Morgan Stanley estimated that e-cigarettes will take the place of 1.5 billion analogs this year, a huge increase from 600 million in 2012. This number is even more impressive when you take into account that it using “stick equivalents,” meaning that it is counting on a per-cigarette basis. This most likely means it is not taking APVs and juice sales into account, and only including things like disposables. If that’s the case, there is a very large number of vapers not included in the chart.
The context of the article is that it’s a bad time to be in the business of selling traditional cigarettes: they’re more unpopular than ever, and people are using them less and less. However, it also shows a little black line on a graph that may look like a drop in the bucket today, but it’s poised for a massive shift in the future. That shift is going to come in the form of a lot more people stubbing out their analogs and vaping instead.