E-cigarettes: Big Tobacco's next big move?
E-cigarette sales could double this year to $1 billion, analysts say. The market for e-cigarettes has grown from thousands of users in 2006 to several million e-cigarette smokers worldwide.
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The market for e-cigarettes, which includes more than 250 brands, has grown from the thousands of users in 2006 to several million worldwide. Analysts estimate sales could double this year to $1 billion. Some go as far as saying consumption of e-cigs could surpass consumption of traditional cigarettes in the next decade.Skip to next paragraph
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Tobacco company executives even noted that e-cigarettes drove total industry cigarette volumes down about 600 million cigarettes, or about 1 percent, during the first quarter, excluding Internet sales — a major avenue for e-cig purchases.
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The Food and Drug Administration plans to assert regulatory authority over e-cigarettes in the near future. Public health officials say the safety of e-cigarettes and their effectiveness in helping people quit regular smokes haven't been fully studied.
Despite the regulatory uncertainties, electronic cigarettes have attracted the attention of investors.
Electronic cigarette maker Njoy Inc. said Monday it has raised $75 million in financing from investors including Napster founder and entrepreneur Sean Parker and Homewood Capital principal Douglas Teitelbaum to be used for marketing, clinical trials, research and development, and international expansion. Musician Bruno Mars also has invested the company whose Njoy King disposable e-cigarettes are available in more than 60,000 retail stores.
Like other tobacco companies, Altria also is focusing on cigarette alternatives for future sales growth because the decline in cigarette smoking is expected to continue.
The company said Tuesday it is expanding its Verve chewable, disposable nicotine discs from 60 stores to about 1,200 throughout Virginia in the second half of the year. It also plans to debut a gum containing tobacco in Denmark this summer called Tju (pronounced like "chew") through a previously announced joint venture with an affiliate of Fertin Pharma A/S to develop smokeless nicotine products.
Altria, whose brands include top-selling Marlboro cigarettes, Skoal smokeless tobacco and Black & Mild cigars, also on Tuesday reaffirmed its 2013 full-year adjusted earnings forecast of between $2.35 and $2.41 per share. The company also owns a wine business, holds a voting stake in brewer SABMiller, and has a financial services division.