The vape category confronted extensive hurdles in 2023 as c-store retailers adapted to new FDA guidelines, regulations, and marketing decisions regarding e-cigarettes and vaping products. Retailers must carefully balance stocking in-demand products with complying to avoid penalties.
FDA Crackdown Highlights Need for Legal Compliance
The FDA issued over 200 warning letters in 2023 to retailers illegally selling unauthorized disposable e-cigarette brands like Puff Bar, Hyde, Elf Bar, and EB Design. Fines targeted vape products the agency deemed "popular and youth-appealing."
This crackdown highlights the need for diligent legal compliance regarding vape merchandise. As Nathan Arnold, Marketing Director for Englefield Inc. explains, non-compliance hurts the entire retail channel. Additional restrictions and confusion for staff and consumers result from a few retailers breaking rules.
Responsible retailers also realize illegal sales enable negative outcomes potentially impacting public perception of the wider vape market. Adhering to regulations displays concern for customer wellbeing and the in-store shopping experience.
Murky Regulations Complicate Product Sourcing
Another pain point is the distribution of banned products to retailers unaware of their illegal status. This understandably breeds caution when restocking vape offerings. No retailer wishes to unknowingly stock unlawful items.
Overall, increased scrutiny from the FDA means more attention to backbar compliance. Keeping abreast of latest guidelines provides confidence in the products offered to patrons.
Flat Sales Projected Despite Consumer Interest
For the year ending October 8th, vape dollar sales declined only 3.8% despite a substantial 8.3% unit sales drop. Circana projects flat category performance for the remainder of 2023 and into 2024.
This plateau gives some retailers pause after previously steady gains. However, others have witnessed rising interest and revenues. For example, Key Oil saw a $700 monthly increase in vape sales since August. Growth also continues for oral nicotine pouch products like ZYN and On!.
Shoppers Seek Variety Alongside Higher Nicotine Options
Despite tightening restrictions on flavors and marketing, retailers observe customers still desiring diverse e-cigarette varieties. With the flavor palette narrowing, consumers increasingly opt for higher nicotine concentrations.
Keelye Gaither of Key Oil notes shoppers prioritize puff count and pricing when choosing vapes. Clear labeling of these attributes assists the purchasing experience. Meanwhile, Duchess stores welcome the customer migration towards more nicotine as flavors decline.
Balancing Interests Remains Key
Responsible vape retailers walk a tightrope between changing regulations, supplier questions, consumer wishes, and business goals. Keeping abreast of guidelines, carefully vetting inventory, and understanding shopper needs is mandatory.
Some consider exploring emerging options like CBD vape merchandise. However, effects on customer experience must take priority over sales growth alone. Healthy, sustainable gains arise from balancing interests, not quick profits.
As 2023 concludes, the vape space remains dynamic. Retailers able to adapt positioning while supporting consumers and complying with laws can stabilize revenues despite broader uncertainty.