Lackluster first quarter earnings reports from the big tobacco companies begin trickling out to their stockholders this month. Weakening cigarettes sales, hikes in excise taxes, and an increasingly aggressive promotional environment are creating quite a challenge for American cigarette manufacturers. Profits reports from Lorillard, makers of Newport Cigarettes, suggest a 25 million dollar decrease in profits when compared to last year’s first quarter earnings report.
As more and more Americans quit smoking, never start, or make the switch to an alternative like e-cigarettes, the potential market share for big tobacco is ever decreasing, and competition for the remaining market will increase as the companies look for ways to reach the largest amount of consumers.
One strategy emerging in this new economy is to buy out competing products all together and this week we see Lorillard dropping 135 million dollars to purchase a popular Ecig brand in hopes of grabbing a portion of the profits from this ever growing sector of the smoking industry. Once, the big tobacco companies thought of e-cigs as a gadget fad with a short lifespan, but Lorillard’s investment proves that the industry giants are taking a closer look at the device’s potential for revenue.
It wasn’t too long ago that the big tobacco companies were lobbying congress and the FDA to ban Electric cigs outright. Since the loss of that battle; a new competition strategy is a foot; buy a current e-cig company as a going concern and cross market to the reformed (previous) tobacco smokers. A classic case of “If you can’t beat ‘em, join ‘em!”, further evidence that E cigarettes are a bona fide alternative to tobacco and a real threat to the Big Tobacco companies.
White Cloud Cigarettes, a leader in premium e cigarette innovations, has no plans to sell out to Big Tobacco. Where our competitors might see the electronic cigarette’s popularity as an opportunity to cash in–we see the burgeoning electronic cigarette market as our opportunity to create an insanely great product that will change people’s lives forever.