How 2019’s pod systems will change the way we think about vaping

a month ago

13 years after the e-cigarette as we know it were developed, pod systems are taking over the market but what is their true potential? Find it out here

Do you know when the first smartphone ever was released? The answer might surprise you but in fact, smartphones have been in consumer hands since 1994(!). I know right, who would have thought they have already been around for a quarter of a century?

The biggest tipping point for the smartphone’s worldwide breakthrough was the introduction of the first iPhone in 2007, since its debut, 13 years after IBM’s ‘Simon Personal Communicator’, smartphone ownership skyrocketed with half of the world’s population now connected via mobile.

We are now seeing this in the vaping and the e-cigarette industry too, the contemporary e-cigarette was created in the mid 2000s and about 13 years later JUUL Labs introduced its (in)famous pod device, which packages nicotine salts from leaf tobacco into one-time use cartridges. JUUL became the most popular e-cigarette in the United States at the end of 2018 with a market share of 75% and these statistics did not go by undetected.

JUUL saw it's market share increase with over 50% in a matter of months in the US ©source:

Just 4 months in 2019 and JTI introduced its Logic compact, BAT its Vype, JUUL found its way to the EU (with a little help from Phillip Morris), HEXA launched its V2.0, SMOK its NOVO and so many other pod systems I can’t begin to list.

Why are we seeing more and more pod systems on the market today?

Pod systems have been on the market for quite a while now, but the reason why we’re seeing more and more devices entering the market is first of all, the popularity of the more recent nicotine salts. Nicotine salts give a very satisfying mouth-to-lung or “cigarette style” vape, making it quite different in delivery as compared to the freebase nicotine more commonly found in e-liquids.

Furthermore, pod systems are a great way to get started with vaping as it doesn’t require the skills and knowledge very common with vaping hobbyists. You just insert the pod into its device and take a puff, often draw activated. Their ease of use attracts a lot of people that want an electronic solution to transition away from cigarettes but don’t like the big chunky ones.

Lastly, pods are unique to their kits. This means that organizations with a great pod system will be instantly rewarded with a returning customer base. You see this benefit exploited with devices being priced cheaper then most vapors, lowering the barrier to test it while its liquid containing pods are being priced much higher in comparison to bottles of liquid.

In short, pod systems hold the key to attract a wider audience to the benefits associated with vaping while at the same time offering a very profitable business model for the brands.

How Pod systems will shape the European vaping market

In a span of months, JUUL saw their sales as a percentage of all e-cigarette sales exponentially increase from 24 to 75% taking up ¾th of the entire e-cigarette market in the US where one out of every 20 people are now using e-cigarettes.

Even though e-cigarettes today have a minor presence as compared to the conventional combustible cigarettes, especially in Europe, Wells Fargo Securities LLC predict a shift within 10 years.

In two years, e-cigarettes could trump the sale of combustible cigarettes ©source: 

A prediction that did not go unnoticed by today’s leading tobacco companies that are hedging their bets by increasingly moving into the e-cig market by taking shares in existing e-cigarette companies or bringing out their own e-cigarette product. These products mainly are, you guessed it, pod systems.

While we could go deep into covering and commenting on the way they are entering the market, the fact is that their massive budget and established distribution channels will effectively make the shift happen and that pod systems will soon take the lion's share of the European vaping market too.

What the industry experts had to say about pod systems

We talked with Atakan Erik Befrits, Chairman of the board at the New Nicotine Alliance Sweden. When we asked about pod systems, this is what he had to say.

High effectiveness pod systems, unfortunately requiring high strength liquids to function well, will have a very prominent position in transitioning smokers away from cigarettes in the next few years. Randomized controlled trials made on current lower nicotine (EU - 20mg vs a US - 55mg)  systems in EU may well prove very disappointing and problematic for regulatory purposes, and if that happens it will be a direct consequences of the sub-optimal regulations that the vaping community and many experts warned about already in the consultation phase leading up to the current TPD.

However, I am personally still hopeful that change may come with the revision set for 2021, that it will allow 36 mg at least but preferably 50mg.

I feel that this is an absolute necessity, especially for closed pod systems as they are easy to use but have low output, while they on the other hand further reduce child safety risks with regards to ingesting e-liquid accidentally. E-cigarette manufacturers cannot be held responsible for kids consuming the entire pod if they get a chance, that would be overstepping the mark quite a bit.

One important consideration to keep in mind though, is the risk closed pod systems hold in establishing a situation conducive to continued restrictive or even tougher regulations on tank systems. Having almost exclusively closed pod systems is a potential regulatory outcome that in effect leaves 600-800 million smokers in low income brackets globally without attractive switch options for the foreseeable future.

Doing so would also negatively affect 350 million daily users of excessively toxic and carcinogenic smokeless products, mainly in Asia, who would also benefit greatly from harm reduced ST products with attractive price points to serve the adult nicotine users in low to very low income brackets.

Continuing  the current trend towards overzealous regulations, as seems to be a real risk at the moment, will without any doubt in my mind, have the most marked negative effect on the most vulnerable of the populations that really need tobacco harm reduction fast.

In effect creating a situation where an affluent and arrogant western mindset leaves vastly larger and much more vulnerable and far off populations with "the shitty end of the proverbial  toilet stick", again. Says Atakan.

So with the rising popularity of pod systems, JUUL’s sales evolution in the US and the world’s leading tobacco organizations all heavily investing in their own e-cig devices, we can conclude that pod systems have the potential to transform the vaping market for good, changing the way we currently think about vaping in the process, as they could lead the charge against conventional cigarettes. While it's important to keep in mind the possible negative effects pod systems might have on the most vulnerable of populations, unlocking the pod system's potential will depend on how the EU will revise the current set of TPD regulation for both pod and tank systems.

Keep an eye out for the vapourround awards as they’ll award Europe’s best pod system on the vapor expo in Birmingham in the first weekend of May!  We’ll be sure to share all that information with you here on international vaping!