It’s the biggest thing to happen to smoking since the ban. Electronic cigarettes (or e-cigarettes) are on fire. The latest official estimate of 1.3 million ‘vapers’ (e-cigarette enthusiasts) in the UK is a year old, and Trevor Field, chief sales and marketing officer for the E-Lites brand, reckons the figure may already have topped two million.
“That’s 20% of the smoking population,” he says.
E-cigarettes face their own regulatory threats, however. Only recently a Welsh Assembly white paper proposed that Wales could become the first part of the UK to ban their use in enclosed public places.
Meanwhile, some pub operators, including Mitchells & Butlers, JD Wetherspoon and Fuller’s, stop customers vaping indoors — and there are calls for it to be included in the smoking ban in public places.
Enterprise Inns, though, is the first major pubco to make a decisive break in favour of vaping, agreeing a deal with Nicolites that will make them available as a new revenue line for its 5,000-plus tenants.
“The pub trade has always been very important for us,” says Nicolites MD Nikhil Nathwani. “You often hear smokers say ‘I only have a cigarette when I’m out drinking’, which continues the trend of e-cigarettes becoming more mainstream.”
Turnover for the UK’s biggest brand leapt from £6m to £23m during 2013, and the e-cigarettes market is evolving rapidly, with a plethora of suppliers offering different designs.
Among them have been the big tobacco firms, taking an ‘if you can’t beat them, join them’ approach. Imperial has Puritane, RJ Reynolds boasts Vuse, JTI has Ploom and BAT (British American Tobacco) has Vype.
Nigel Hardy, head of BAT’s Nicoventures arm in the UK, appreciates some pub customers may not be comfortable with vaping, “regardless of any debate about health risks”.
“We think their use should be determined by the venue owner, in response to the wishes of customers, and we’d support a solution where both e-cigarette and non e-cigarette consumers can be accommodated — for example, by having separate sections.”
E-Lites’ Field concedes it’s been harder for e-cigarettes to crack the on-trade “because of the smoking ban, even though there are quite a few advantages”.
He adds: “E-cigarettes are keeping people in the pub longer, and at around £2 for the equivalent of 20 cigarettes they’re a great cost-saving. It’s good for the publican, too, as a new, incremental revenue stream.”
The company’s research suggests there’s a big education job to do, however, so has produced ‘Vaping Allowed’ stickers for pubs.
“Our number-one aim is to make the experience as close to smoking as possible,” says Field. “We’ve even launched e-cigars for special occasions. But barstaff need training. Customers will want to know the facts and they need to be encouraged to be mindful of the people around them and respect their views.”
Simon Clark, director of the industry’s pro-smoker body, Forest, believes that pubs should be allow-ed to decide their own policy on e-cigarettes.
“If they choose to ban them that’s their right but we believe they’d be misguided,” he adds. “Some pubs have banned e-cigarettes on the grounds they ‘look like cigarettes’. That’s like saying water should be banned because it looks like vodka. As more people use them more people will get used to them and see them for what they are. A sign above the bar saying ‘vaping allowed here’ will make it clear that people are vaping, not smoking. E-cigarettes are an opportunity, not a threat. By embracing them, publicans have the chance to bring many smokers back in from the cold. That’s a business opportunity that should not be wasted.”
British American Tobacco (BAT) picks out these key market trends for pubs to be aware of:
■ The number of smokers buying low-price cigarettes rose by 3% in 2013 to 2.8 million.
■ Menthol sales were up 17% in 2013.
■ Capsule cigarettes, which give smokers the option of clicking to release a fresh taste, are in growth and account for 1.8% of cigarette sales.
■ Most people don’t understand the rules of public e-cigarette usage.
■ Almost a quarter think they have to adhere to the same laws as traditional cigarettes.
■ Nearly a third think e-cigarettes produce harmful tobacco smoke.
■ Half of people think there’s a stigma or social taboo around using an e-cigarette in a public place.
■ Two-thirds said they wouldn’t use an e-cigarette in a public place without checking.
For pubs that sell traditional tobacco products, it’s time to prepare for the retail display ban that comes into force in 2015 when their customers will no longer be able to see what they’re selling.
“Three things will drive loyalty when tobacco is out of view,” says British American Tobacco (BAT) customer marketing manager Richard Wood.
“First, they’ll need to know they’re getting a good price; second, they’re going to need a knowledgeable retailer who can answer their questions, and third, knowing where your products are located will help staff reduce the time it takes to serve your customers. It will be more challenging to monitor stock levels, too, when the products are hidden — and we recommend publicans are vigilant about that.”
And that may not be the end of tobacco regulation. Plain packaging is back on the agenda, and Forest’s Simon Clark fears councils may use powers under the Localism Act to extend the smoking ban outdoors.
“That could do an enormous amount of damage to publicans who have spent a considerable amount of money creating comfortable outdoor areas for the many customers who continue to smoke,” he says.
“Despite the rise of e-cigarettes, smokers still outnumber vapers and many vapers are dual-use consumers who continue to smoke and don’t want to quit. A well-designed smoking area with heating, tables, chairs, a sofa or two, and an awning, is a major attraction — not just for them but their partners and friends too.”
Should the use of e-cigarettes indoors be banned?