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logic takes unit sale lead away from blu

In US convenience stores, Logic E-Cigs have taken the first spot in unit sales, acccording to convenience store news source cspnet, ahead of all the e-cigs sponsored by Big Tobacco. Blu still leads in dollar sales (hint: maybe it costs more), but Blu trails on devices sold. The cigalikes offered by Altria and Reynolds are further behind, having only entered the national market a few months ago, after trials in a couple of states.

It has been widely recognized that e-cig sales have slumped in recent months. Some journalists followed Big Tobacco's line that the downturn indicates a return to combustible cigarettes. But the data on cigarette shipments won't support that interpretation at all. Others see the market change as an indication that vapor tank systems and a variety of mods are outstripping all cigalike vapes. These are sold primarily in vape shops, and online, and are not tracked by the sales ratings.

Logic and Blu sell only cigalikes in the US (although Blu is said to be releasing a tank system in the UK). The other Big Tobacco brands in the US have yet to move into the vapor tank area.

The three convenience stores on my block in Chicago all carry a Blu disposable for $9.99. None of the three sell Logic, but one of them carries NJOY for $7.99. Seven-Eleven, the largest convenience store chain in the US (indeed in the world), offers Blu for $9.99, Logic for $9.95, and NJOY for $7.99. Four cents isn't much of a price differential, so there must be some other factor driving Logic into the number one position on unit sales. Could it be that savvy vapors are learning to distinguish between independent companies and the cigalikes Big Tobacco is hawking?

Overall, dollar sales for e-cigs were down 7.5% this month, not quite as bad as the 12.4% decline in the previous month. But unit sales were up 9.4%, while the previous month's unit sale climb was only 0.5%. This makes it clear that popularity is rising, and prices are going down.

Three brands saw both dollar sales and unit sales go up: Logic, Ballantyne Brands, and Reynolds (Vuse). Blu lost ground both dollar-wise (-30.5%) and unit-wise (-26.9%) during the past 4 weeks, and -22.3% and 14.7% respectively for the entire 12-week period.

The savviest observers, market watchers like Bonnie Herzog of Wells Fargo Investments, seem to agree that the downward trend in cigalikes is linked to the upward trend in vapor-tank systems, which are only beginning to be sold in convenience stores. They are marketed online and in vape shops, neither of which are tracked by the primary ratings provider, Nielsen.

Jilian Mincer at Reuters calls tanks "hunkier" and she notes that their nicotine levels can be customized, not to mention the wider variety of flavors that can be vaped in them, and the bigger vapor plumes they can produce. She thinks they may even inspire a cult.

The Big Tobacco firms may delve into vapor-tanks in the future, but at the moment they are keeping their cards close to the chest.

"I am confident that e-cigs have a future and will likely get bigger," said Morningstar's Philip Gorham. "What I don't know is which technology will win out."

Hmmmm... some of us think we DO know. 

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