Spotlight on: NJOY

Adult smokers are looking for alternatives and NJOY offers a multitude of products across three e-vapor categories.

Officials at NJOY have a pretty specific mission: to make traditional cigarettes obsolete, replacing them with a bevy of new products and technologies that will satisfy the needs of adult smokers.

Welcome to the world of electronic cigarettes and vaping, where enthusiasm runs wild and new companies and products are flooding the marketplace as suppliers see a big opportunity to rock the tobacco category like never before.

NJOY plans on being a big part of this new era. In the span of less than a decade, the privately–owned Scottsdale, Ariz.-based company has emerged as a leader in the booming e-vapor segment, offering its retailers and consumers more than 40 different SKUs across three distinct e-vapor categories (disposable e-cigs, rechargeable e-cigs, and vaping devices & e-liquids).

“Why should retailers carry this segment? There are about 41 million adult smokers in the U.S. right now,” says Vito Maurici, senior vice president of sales and distribution for the company. “The Centers for Disease Control estimates that nearly 70% of these smokers are looking for an alternative and wish they were not smoking traditional tobacco products. That creates a great opportunity for our products.”  And it affords retailers with the opportunity to participate in a revolutionary shift in consumer preferences.

Dollar sales growth for the category indicates that these products are here to stay. Annual e-vapor sales are approaching $2.5 billion and many analysts say that this number could easily double in the next two to three years as more consumers learn about these items and new technologies hit the marketplace. In fact, one financial analyst says that barring stifling federal regulations, the category could overtake traditional cigarette sales within a decade.

“The cigarette category has not significantly evolved over the last 60 years,” says Mark Rappaport, director of trade marketing & market information for NJOY. “However, the e-cigarette industry is innovating rapidly to keep up with evolving consumer preferences. This puts welcomed pressure on us manufacturers to continuously search for more effective ways to satisfy adult smokers and support them in their efforts to leave cigarettes behind. These rapidly changing consumer preferences also put pressure on the retail community to stay on top of consumer trends so that they are offering the right e-vapor product mix in their stores. The innovation cycle of e-vapor products is more similar to cell phones and other technology-based products versus traditional, combustible cigarettes.”

It has not exactly been a smooth road for the company, founded by the Weiss family in 2006 after Mark Weiss came across a crude e-cigar device. Initially, most sales were made through online sources and when retailers did finally start to pick up the product, the Food & Drug Administration intervened and tried to regulate the product as a drug delivery device. NJOY took the lead in fighting back and entered into litigation, arguing that no health or cessation claims were made and the category should be regulated as a tobacco product, rather than a drug delivery device. In 2011, federal courts ruled in NJOY’s favor and now the FDA is in the process of enacting regulations for the category that are estimated to be released in 2015.

The court’s decision opened the floodgates for the category. Sensing that government opposition may be limited, suppliers started to be much more aggressive with promotional activities and product introductions. Mainstream retailers, including many supermarket chains, started to carry e-cigarette products.

NJOY officials believe they are the leaders in the e-vapor category, in terms of the quality of their products and the innovation they offer, as well as being an independent voice for the segment since it is not owned by, or affiliated with, a tobacco company. NJOY products can be found in approximately 80,000 stores now, add officials. “We see ourselves as the gold standard for quality, innovation and regulatory perspectives,” notes Maurici. “On top of that, we understand the targeted consumer and what they expect from e-vapor products. In the end, that is good news for retailers and their customers.”

The company has grown quickly and is now offering three different product lines. The NJOY King Disposable line features a soft filter, a glowing ember-like tip, and has the size and weight similar to a traditional king-sized cigarette.

NJOY Recharge is a rechargeable e-cigarette system. The refill “Flavor Chambers” are offered in five flavors and feature high vapor volume in an easy-to-use format. The newest product line, NJOY Vaping, features 10 different flavors in two different nicotine strengths that allow consumers to customize their vaping experience. The NJOY e-liquids come in a number of adult-oriented flavors, including vanilla bean, blood orange, and single malt Scotch. The company also offers hardware in the form of a high-performance, affordably priced Vape Pen starter kit.

“NJOY will continue to innovate as our valued and growing consumer base demands more and better satisfaction,” adds Rappaport. “We are committed to deeply understanding the adult smoker and finding new ways to meet their needs.”

Educating consumers and making them more aware of the category and the brand is also vital to NJOY’s long-term success. Maurici says the company has allocated resources into promotional efforts and consumer activations, including a major sponsorship of the World Series of Poker, and a partnership with Caesars Properties. “The goal with the Caesars relationship is to maximize the exposure of these products to a highly concentrated population of adult smokers at these venues so they return home and purchase the products at their local store,” he adds.

NJOY has also utilized in-store promotions such as a buy one, get one free on NJOY Kings in early 2014; and more recently with the new Recharge product, buy a multi-kit and get a free two-count refill of Flavor Chambers. NJOY also utilizes in-store displays and premium merchandising options to build awareness and support the retail community.

So where does the category go from here? Both Maurici and Rappaport think that consumer education can only lead to greater sales of products. “We believe that partnering with our retailers to educate consumers is the key to mutual success within this growth segment,” says Rappaport.

And how about NJOY? “We have a robust pipeline of new products to meet consumer needs and we have developed sustainable infrastructure around complying with current and future government regulation,” says Rappaport. “We are well positioned, with the help of our valued retail partners, to take this category to new heights as we relentlessly pursue our corporate mission to make the combustion cigarette obsolete.”