Open System Vapes Surpass Cigalikes in US Market
This week, Market Watch reported that open system vaporizers have officially surpassed smaller “cigalike” electronic cigarettes to top the market. It wasn’t even a close call with open system vapes selling $500 million more per year. This is an eye opening look at how the ecig world is changing and what vapers prefer when it comes to their gear.
Wells Fargo Securities said that the tank style open system vaporizers contribute over $1.5 billion to the total ecig market in the United States, while the traditional electronic cigarettes are bringing in about $1 billion. Combined, the vaping industry is worth an estimated $2.5 billion annually and that number is still growing.
Bonnie Herzog, the Managing Director and Senior Tobacco Analyst at Wells Fargo has been closely tracking the ecig industry’s growth over the past two years. “Open sytem vaporizers are quickly gaining in customer confidence, with electronic cigarette users moving towards those more powerful, tank-style devices,” she said. “In addition to the experience provided through them, open system vaporizers are also a lower-cost vaping option over the long-term. We have found, for instance, that the weekly spend for an open system user is about 30% less than that of an e-cigarette user.”
Overall, the industry has had a massive 23 percent boom in financial growth in 2014 and Wells Fargo analysts say that the trend is really just beginning. In fact, Harzog believes that open system sales are growing twice as fast as the overall industry. Six months ago, cigalikes were still dominating the market, but now that we near the end of the year, that has changed and tanks are responsible for 60 percent of US vaping sales.
Herzog said that now is the time for ecig companies to start moving towards the tank and ego devices rather than investing their efforts into the smaller electronic cigarettes that require cartridge refills. “Open systems represent a huge opportunity for the industry, particularly retailers,” Herzog explained. “In a recent Tobacco Talk survey of retailers, we discovered that in coming months, 100 percent plan to feature both electronic cigarettes and open tank systems in stores. Open tanks are profitable – with high margins – and unsurprisingly, are quickly growing in volume and shelf space at retail,” she added.
Cynthia Cabrera, Executive Director of the Smoke-Free Alternatives Trade Association said vapers like the tank systems because they offer more customization and that has become a significant feature. Ecig companies are taking notice and many are rolling out their own vaporizer models while the market is hot.
VMR Products recently launched V2 Pro, an open system vaporizer that allows users to vape essential oils, e-liquids, and even loose leaf tobacco. CEO Jan Verleur said customer interest drove the company to move towards the new option. “Electronic cigarettes have been in the marketplace for over five years. In that time, we’ve seen a fundamental shift in customer appetites towards open system devices designed to exceed the capabilities of the micro-cig form factor. These vaporizing devices represent a significant growth opportunity for our industry to meet rising customer demand,” Verleur said.
Have you jumped in and tried open system vaporizers? How have tanks changed your approach to vaping?