E-Tobacco: What’s Next?

C-stores remain cautious with regards to what direction the e-cigarette and vaping industry is headed this year.

By Anne Baye Ericksen

Between the U.S. Food and Drug Administration (FDA) deeming regulations finally released last year and a bevy of new state taxes and regulations restricting who can sell or purchase tobacco and other-tobacco products, 2016 was a tumultuous year for e-cigarettes.

“Sales in this category fell 20%,” said Todd Badgley, president of the MotoMart convenience chain, which operates 79 MotoMart stores in six states throughout the Midwest. Its parent company, FKG Oil, is based in Belleville, Ill. “Assuming the shift is to open systems, I assume these customers are shopping at vapor stores versus c-stores since there is a much wider selection to choose from.”

While legislation and market pressures on the e-cigarette and vaping products caused a seismic wave in the convenience store channel, stakeholders are curious to see how 2017 shakes out—especially with a new president taking the helm.

Even though current profit margins are lagging compared to a few years ago, e-cig dollar sales across all retail channels for 2016 rose an estimated 9% to $850 million compared to 2015, according to Nielsen data reported by Wells Fargo Securities.
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