Imperial To Launch Vape Company Competing With Juul

The British tobacco firm Imperial Brands announced recently that they’re preparing to release their own vapor product line to compete with Juul Labs, according to The Star. These “Next Generation Products” are looking to gain back some of the market share the company lost in the last year due to the increased popularity of vapor products.  

“We are currently witnessing the biggest consumer shift in our history, with millions of smokers around the world choosing to switch to less harmful Next Generation Products,” reads a statement from Imperial Brands on their website. “NGPs offer smokers alternatives to combustible tobacco and are broadly divided into two categories: vapor products and heated tobacco products.”

Imperial is the fourth-largest tobacco company in the world and owns familiar American brands including Winston and Golden Virginia.  The product launch comes in the wake of figures that indicate Juul is claiming a majority share (68 percent) of the U.S.’s total retail vape market after only three years in business. For CEO Alison Cooper, this type of financial success points to the branding offered by Juul products.

“The type of experience Juul delivered was definitely a step forward,” Cooper said in an interview at Imperial’s headquarters in Bristol, England. “Smokers weren’t switching completely in to vaping before because the experience wasn’t satisfying enough. That’s what we are trying to achieve.”

Imperial Brands, like other Big Tobacco companies, have faced increasing competition from vapor products both inside the United States and abroad. Last year, the combustible cigarette market dropped by 18 percent in Japan. The U.S. is the world’s biggest e-cigarette market, and the only one in which Imperial is profitable. But Juul’s rise over the last three years has caused Imperial’s market share to fall by more than half, to just eight percent last year, according to Wells Fargo.

Cooper dismissed concerns that this was part of a larger drop on a worldwide scale. She told investors that the Japanese market was the only market where she expected rapid disruption for the tobacco industry, and argued that the popularity of vapor products in the U.K. and the U.S. means demand for nicotine products will continue to exist even as tobacco use declines.

Big Tobacco companies have taken this approach towards vapor products before. Philip Morris has taken similar steps to shift the industry away from combustible cigarettes in promoting their own iQOS (I-Quit-Ordinary-Cigarettes) which heats tobacco at a lower temperature rather than burning tobacco like in combustible cigarettes, while keeping a need for an actual tobacco product in play.  

Both Imperial Brands and Philip Morris Inc. are Big Tobacco companies caught in the crosshairs of a trend that portends declining revenue for their core products. Instead of marketing strictly to promote combustible cigarettes, the popularity of brands like Juul have forced Big Tobacco companies to promote cessation from their own products as a way to keep up with the market.