Little not-Tobacco Socks Big Tobacco Back!
The playground bully took a hit today as two of the modestly-sized e-cig companies, firms that do not sell and never have sold toxic cigarettes, merged to acquire greater clout for the impending marketing war with the wealthy death merchants of Big Tobacco.
Business Week reports that the FIN Branding Group has merged with Victory Electronic Cigarettes, which in turn has just bought the European enterprise Vapestick, to create a company that can more effectively compete with the coffin nail suppliers.
Market watchers have been expecting Big Tobacco to ride roughshod over the “clean-hands” companies that have sprung up since roughly 2006. This has been the expectation of many business wonks ever since Lorillard bought Blu a few years ago, and other cigarette megaliths followed suit by buying up clean-hands companies (Dragonite, Green) or creating their own brands (Vuse, Vype, and MarkTen). The major business publications are impressed by Big Tobacco's seemingly limitless distribution networks and well-oiled marketing machines, and yes, scads and scads of money, raked in by the bushel back when the industry's death-dealing lies were unchecked. Now that BT wants to present itself as the savior from the plague it introduced, business wonks see nothing to stand in their way.
Except maybe the PEOPLE. Have a look at this comment on Bloomberg's (yes, Bloomberg's, irony of ironies!) Business Week: “Get how they down play the small businesses since 2008 that make up the majority of the 1.7 billion in sales. They purposely deny the existence of 100s of 1000s of small businesses online and now brick and mortar stores, small biz's employing and selling 2nd, 3rd generation E-cigs. It is these people who should be the NEWS MAKERS not the over bloated corporations, Johnny come lately, green with envy and lust for money that have it in their minds to steal this away from the PEOPLE!”
This commentator illustrates the sense of embattled community that has grown up among vapers in the early years of e-cig development, with regulators threatening punitive controls, followed by the last few years of Big Tobacco bullying the little guys, while nanny governments harass vapers with misguided public use bans. These vapers, if they use “cigalikes” at all, will simply refuse to buy Blu, Vuse, Vype, MarkTen, or whatever Green and Dragonite end up being called by their new board-room masters. And chances are they will start lobbying their convenience stores to get the Big Tobacco products off their shelves, in favor of “clean-hands” products, showing the market watchers and regulators that Big Tobacco does not speak for vapers. They are finding their own voice.
Another commentator on the same article offers a different perspective often encountered in the vaping community: “internet sales . . . are 90% 2nd and 3rd generation devices [that is, personal vaporizers or 'mods' that do not look like cigarettes] that are at least half of the market. People buy cigalikes to use where they can not smoke or they try them and then figure out that there are [other products, non cigalikes] that work good.” This respondent is right: the vaping community is rapidly becoming much more sophisticated, and many savvy vapers move on beyond cigalikes soon after using them to quit smoking. Chances are this will be another factor that may leave Big Tobacco in the dust.
A final word from another of the fine commentators on the article cited: “Consumers should rally to support the smaller e-cig companies rather than Big Tobacco. Smaller mom and pop companies usually offer better customer service than the big guys.” Hear Hear!