Disposable E-cigarette Market Dominates Convenience Stores in the US

In just three years, the disposable electronic cigarette market in the United States has grown from a footnote in retail to a $2 billion behemoth. These products have rapidly taken over the convenience store/gas station section of the e-cigarette market. Sales data comes from Chicago market research firm, IRI, and was reported today by Reuters, which obtained the data through confidential sources. According to the IRI report, disposable e-cigarettes have grown from less than 2% of the c-store market to 33% in just three years.

This aligns with the data from the 2020 National Youth Tobacco Survey (NYTS), which showed that the one-time use among school-aged youth had increased from 2.4% in 2019 to 26.5% in 2020. Due to FDA's actions, the disposable market has rapidly expanded as most retail stores no longer offer pod-based flavored e-cigarettes.

Although not surprising to regular observers of the e-cigarette trend, a new IRI study confirms that the FDA is focused on preventing well-known mass market brands like Juul and Vuse, as well as open-system products sold in e-cigarette shops and online, from selling flavored e-cigarette products, which has created a little-known parallel grey market for disposable brands.

The grey market electronic cigarettes are similar to black market products, but they are not sold in underground illegal markets. Instead, they are offered through standard retail channels, taxed and subject to age restrictions. The three-year growth period described in the IRI report from 2019 to 2022 is significant. At the end of 2018, industry leader Juul Labs was forced to remove its flavored pods (except mint) from the market in response to what tobacco control organizations called a moral panic over youth e-cigarette use.

In 2019, Juul also discontinued its mint flavor after President Donald Trump threatened to ban all flavored e-cigarette products. Trump eventually backed down, but in January 2020, the FDA announced new enforcement measures for pod and pod-based e-cigarette products, excluding those containing tobacco or menthol.

The crackdown on seasoning products sold in regulated markets is matching the rapid growth of a disposable grey market, which regulatory agencies and national news media are largely unaware of. The first disposable brand to gain attention, Puff Bar, could become the face of the market as tracking the ever-changing world of grey market e-cigarettes takes too much effort. Blaming the "problem" on a brand is easier, as many tobacco control departments have done.

The FDA has spent a considerable amount of time trying to regulate Puff Bar. It began with a warning letter to Puff Bar distributors, which was issued one week after the company claimed to have stopped selling in the United States. The FDA later asked Congress to grant the agency regulatory authority over synthetic nicotine, after Puff Bar reentered the market almost a year later, claiming to use a new non-tobacco derived nicotine formula. (The FDA began regulating products containing synthetic nicotine earlier this spring.)

The Puff Bar brand has gained significant recognition, but by the time the FDA and CDC took notice, the name had become a catch-all term for disposable e-cigarettes. According to data from NYTS, Puff Bar was the most popular single brand among high school e-cigarette users in 2021, surpassing Juul by five times, despite their actual availability being limited in stores during NYTS surveys.

Of course, this survey did not attempt to differentiate between young e-cigarette users who actually used Puff Bars (which was unlikely at the time) or whether they simply referred to the brand as "Kleenex" like many people do with all facial tissues. In fact, by the time NYTS data was collected in 2021, there were already dozens, if not hundreds, of disposable products available for sale.

Currently, popular disposable e-cigarettes have not received authorization from the FDA, even though some disposable manufacturers have submitted pre-market tobacco applications (PMTAs). Some manufacturers have questioned FDA's marketing denial order (MDO) either in court or through FDA administrative appeals.

Two disposable tobacco-flavored products (which are essentially two variants of a single device) made by pioneer e-cigarette manufacturer NJOY were authorized for sale by the FDA in June. However, NJOY's low-power NJOY Daily, which has been on the market for almost a decade, has little in common with the now-popular disposable e-cigarettes.

The range of modern disposable electronic cigarettes spans from small Juul-shaped devices to large-capacity products that can be filled by hand and provide thousands of inhalations. While all of them use rechargeable lithium-ion batteries, only those with enough electronic liquid to last over a day have a built-in USB port that allows users to charge them until the liquid is depleted.

Most popular disposable products are filled with fruit-flavored vape juice, often mixed with cooling agents like menthol. Few have a traditional tobacco flavor. The gray market for these products wouldn't have grown so large if the FDA hadn't been determined to eliminate non-tobacco flavors.

These products are ubiquitous, not only in American stores, but also around the world. Even in Australia, where the government has banned all non-prescription nicotine e-cigarette products, there is still serious concern about the widespread availability of disposable e-cigarette products for use by young people.

How will Australians deal with banned popular products? They may take a similar approach to the US FDA, which handles a $2 billion market that disregards its regulations by punishing businesses that attempt to comply. Those who submit applications and make genuine efforts to follow the agency's rules will receive compliance certificates and warning letters, while sellers on the grey market will change their product names and mock the clumsy regulatory agency.

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