Talking Shop with… John Wiesehan Jr.

John Wiesehan Jr., CEO for Mistic, says the e-cigarette industry is growing at a record rate. Why are e-cigarettes becoming so popular? John Wiesehan Jr.: There are several reasons. For one, smokers like the idea of an alternative to traditional tobacco cigarettes, which come with numerous health side effects. E-cigarettes provide a truly authentic vapor experience while minimizing many of the negative aspects of the traditional cigarette. Smokers also enjoy the experience with e-cigarettes and how it mimics a tobacco cigarette. When you puff on an e-cigarette, it produces a water vapor mist that tastes and acts like real smoke; but you don’t smell it, you don’t get it on your clothes and there is no staining. Another major advantage is that you can use them in many places where traditional cigarettes are prohibited. E-cigarettes are also extremely cost-effective, which obviously makes them very attractive to smokers of traditional tobacco cigarettes. For example, a pack per day smoker of traditional tobacco cigarettes spends an average of $2,200 annually. Because Mistic uses long-lasting refill cartridges, the equivalent to one pack of cigarettes costs $1, making Mistic electronic cigarettes 83% less expensive than traditional tobacco cigarettes. Do e-cigarettes really help tobacco smokers quit? The FDA has not approved e-cigarettes as a smoking cessation product.  However, e-cigarettes, which are tobacco-free, may be a safer alternative to cigarettes and there are thousands of smokers who are providing anecdotal stories saying they have used e-cigarettes to help them quit. It is pretty safe to say that e-cigarettes provide a better alternative to traditional smoking. Moreover, recently published research shows that e-cigarettes may work better than some smoking cessation products on the market today. In a first of its kind study published September 2013 in the medical journal Lancet, researchers compared e-cigarettes to nicotine patches and other smoking cessation methods and found them statistically comparable in helping smokers quit over a six-month period. Among the e-cigarette users, 7.8% had quit by the end of the study, while 5.8% of those using the patch had stopped smoking, a difference that was not statistically significant, meaning that the two interventions had essentially the same impact. Are there any safety issues with e-cigarettes?   Because they use a battery to produce heated vapor, Mistic electronic cigarettes contribute to fewer safety hazards than traditional cigarettes do with fire, smoke and ash. However, there are personal safety issues to think about when using e-cigarettes. Cartridges should be kept out of the reach of children and pets. Used or unused open cartridges contain nicotine and may be poisonous if ingested. How will FDA regulations affect the e-cigarette industry? We always have been in favor of sensible regulation. That regulation could have an impact on production, flavorings and online sales. It is also likely that regulations will have an impact on the way e-cigarettes are advertised. As an industry, we need to make sure that e-cigarettes are manufactured and marketed appropriately. This ranges from product development to preventing sales to minors. Where do you see the e-cigarette category going in the next few years? E-cigarettes are disrupting the $90 billion tobacco industry and the segment is expected to grow to $2 billion in 2014. It could reach $10 billion in 2017. Some analysts believe that consumption of e-cigarettes will eclipse consumption of traditional cigarettes over the next decade as technology improves. We are excited about the growth of this industry and believe e-cigarettes benefit all adult smokers, from those who purchase these products to the manufacturers and retailers that make and sell them. Why should the grocery channel pay attention to the e-cigarette category? The e-cigarette category has enormous potential to be a valued player in the retail sector. Same store sales are growing rapidly, especially for e-cigarettes like Mistic with the “razor-razorblade” model driving repeat customers back to the stores. Because many e-cigarette products are rechargeable, repeat sales offer the highest growth for revenue and gross margins for retail partners.