Vaping on the Rise As E-Cigarette Sales Hit $6bn

For the first time in many years, sales of nicotine replacements in Britain fell as consumers switched to electronic cigarettes to shake off the habit.

Domestic sales of vaping products increased by a whopping 75% to reach £459m, while spending on nicotine replacements reduced by 3% to reach £137m, the first drop since 2008. It brings to an end 4 years of annual sales consistently growing by 5-6%.

The trend is the same worldwide, with sales of vaping devices, especially the best ones, growing by almost 60% to hit £3.9bn, breaking through the $6bn mark for the first time. This phenomenal growth can be attributed partly to the popularity of vaping in the US, where 10% of Americans use e-cigarettes. The US is the single largest markets for vaping products, with sales there doubling to £1.7bn according to statistics released by Euromonitor International.

Shane MacGuill, a tobacco analyst working with Euromonitor, said he was “reluctant” to conclude from this data that smokers trying to break free from tobacco were increasingly turning to e-cigs over other conventional therapies, but said the trend in bigger markets like the UK looks a lot like “correlation, perhaps even causation”.

Vaping sales in Britain overtook those of nicotine replacement therapies in 2012, and have now more than tripled them as new data shows. This means that Britain is now the second largest market for vaping products globally, surpassing Italy where total sales plummeted by 39% last year.

As we stand, the proportion of adults in Britain who smoke decreased from 27% in 1999 to 19% in 2014, and 24% to 17% in the US over the same time period.

Electronic cigarettes have emerged as one of the most potent threats to the tobacco industry which is already struggling with smoking bans, higher taxes, increase awareness and an overall decline in the number of smokers.

“Up until recently, tobacco firms have not faced any meaningful competition, be it from nicotine replacements or anti-smoking groups,” observes MacGuill. “However, the days of conventional cigarettes are numbered. The only question is how long it will take.”

It is however too early to predict their total demise, given that their sales in the UK actually rose by close to 1% to £15.5bn in 2014. The global market also experienced a growth of 6% to reach £452. Experts say this is value growth, which is due to cigarettes getting more expensive as a result of higher taxes. The volume growth is however very minimal globally, with the exception of China where the population of smokers, currently standing at 300m, is increasing.

Big tobacco firms are already readjusting, with many of them heavily investing in safer e-cigarettes research in a bid to get a slice of the lucrative market.