Is tobacco your favorite e-liquid flavor? We’re willing to bet that it isn’t. Surveys and anecdotal reports have provided a mountain of evidence that access to interesting e-liquid flavors is vital to adult vapers who have successfully quit smoking and don’t want to return to cigarettes. That’s why thousands of vapers across America are undoubtedly very unhappy about an announcement made Tuesday by JUUL Labs. JUUL has announced that, for the present, it is discontinuing the distribution of flavored pods to the more than 90,000 retail outlets that currently sell them. Tobacco and mint/menthol pods will remain available in brick-and-mortar stores. Flavored pods will be available only through the JUUL website.
If you haven’t been following the news, you might feel a bit blindsided by JUUL’s announcement. What happened? How did we get here? We’ll attempt to explain.
JUUL’s Popularity Is the Problem
It didn’t take vaping long to become extremely popular in the United States. Within a few years of the first e-cigarettes appearing here, there were already millions of people vaping in the U.S. The market, however, was an extremely fragmented one with many small businesses competing for pieces of the pie. The U.S. vaping industry had plenty of early success stories – products such as the Blu e-cigarette, the R.J. Reynolds Vuse and the NJOY King all did well – but no single product sold well enough to become a clear leader. It’s pretty difficult to argue with the statement that the JUUL is the vaping industry’s first defining product. Close to $950 million in JUUL products have sold in the past year alone, and the company now owns 75 percent of the traditional retail e-cigarette market.
If someone buys an e-cigarette from a gas station or convenience store, there’s a three out of four chance that it’s going to be a JUUL – and when a company so thoroughly dominates an industry, there’s going to be scrutiny. In this case, the scrutiny stems from the fact that JUUL has a significant number of underage users.
JUUL Under Fire for Underage Use
It’s no secret that, for many different reasons, some underage students are going to seek out and use tobacco products. Today, though, it’s not combustible tobacco that kids are seeking out. According to the 2017 National Youth Tobacco Survey, e-cigarettes are now the most popular tobacco products among children by a wide margin. While use of any tobacco products among children continues to decline – even when e-cigarettes are taken into account – the fact remains that children are gaining access to products that were never intended for anyone other than existing adult smokers.
How bad is it? According to the survey, there are at least 2.1 million children using e-cigarettes in the United States. Why are they vaping? When asked why they used e-cigarettes, 31 percent of respondents stated that they vaped because they liked the flavors. That’s right – the same thing that’s helping adults get off of cigarettes may be attracting children who might never have used nicotine at all. That’s a serious problem, and that’s why the FDA has had such a difficult time figuring out how to regulate e-cigarettes in the United States. It’s clear that vaping is helping smokers quit tobacco. Vaping also seems to have served as an introduction to nicotine addiction for millions of children, though, and that’s unacceptable.
Putting two and two together, we know that at least 2.1 million children vape, and we know that three out of every four traditional e-cigarettes sold is a JUUL. You can see, then, why JUUL is under such scrutiny. You know that things are getting serious when “JUUL” has become a verb synonymous with vaping in the way that “Xerox” once meant “to make a photocopy.” Just try searching for “juuling” on Google and see what comes up.
JUUL Attempts to Become a True Vaping Industry Leader
Until now, JUUL Labs has been a vaping industry leader in terms of its technology and sales alone. In terms of actually accomplishing the main mission of the industry, though – selling products that help adult smokers transition away from cigarettes – the company has been under scrutiny from the public and the FDA for not always living up to that goal. Although the FDA has certainly played a role in forcing JUUL’s hand, the result is the same: JUUL now has the most comprehensive plan of any company in the industry for ensuring that its products are unavailable – and unattractive – to those who shouldn’t be buying them.
In addition to pulling flavored pods from brick-and-mortar stores, JUUL plans to:
- Restrict all online sales of JUUL products to customers aged 21 and older – even in areas where the smoking age is 18
- Implement a third-party age checking system to verify customers’ information using public records
- Deny bulk sales to prevent customers from reselling JUUL products without authorization
- Send secret shoppers to about 2,000 retailers per month to check for legal compliance
- Penalize retailers that sell JUUL products to minors, potentially going so far as bar violators from selling JUUL products in the future
- Monitor online marketplaces such as eBay and Alibaba to catch and remove unauthorized JUUL sellers
- Shut down its social media accounts and watch for posts from social media users that portray underage JUUL use
Whether you’re a current JUUL user or not, it’s worth taking a moment to read JUUL’s announcement in its entirety. Other companies will surely use JUUL’s plan as a template for their own efforts in preventing underage sales.
Another interesting aspect of the announcement is that JUUL is developing a new device that will somehow use Bluetooth to prevent underage use. FDA regulations in the United States, however, specify that no new vaping products can be released after August 8, 2016 without first going through the pre-market application process – something that no vaping product has yet done. JUUL Labs is working with the FDA to find a way to market this new device in the U.S. legally.
How Are JUUL’s Changes Affecting Retailers?
It’s a bit early to gauge the full result of JUUL’s decision to stop distributing flavored pods to retailers. Retailers who have JUUL’s mango, cucumber, crème and fruit pods available will continue to sell those pods until they sell out. However, early reports suggest that the distributors who still have flavored JUUL pods are jacking up the prices to capitalize on retailers’ desperation. A representative from Premium Vape – New Zealand’s leading seller of JUUL products – told us that their distributor immediately increased the price of JUUL pods by 50 percent following JUUL’s announcement.
While things might currently look a bit bleak for JUUL retailers, all hope isn’t lost. JUUL Labs does plan to reintroduce flavored JUUL pods in the future for retailers that can legally sell them. To sell flavored JUUL pods, retailers will need POS systems that flag the flavored pods as age-restricted products available only to customers aged 21 and older. Retailers will need to scan customers’ ID before selling JUUL pods and must also limit the number of pods that customers can buy. If you’re a retailer with a POS system that can’t handle JUUL’s new requirements, read about our recommendations for the best POS systems for vape shops.