Issue link: https://read.dmtmag.com/i/367531
12 Oil Prophets Hailed by many as an emerging threat to the tobacco cigarette industry, electronic cigarettes are providing smokers with an alternative to traditional tobacco-based smoking. But these battery-operated devices serve as much more than a nicotine delivery system, they are serving as a shot in the arm for an entire industry. E-cigarettes are booming and now with major tobacco players Altria and R.J. Reynolds entering the business alongside the established brands, the category is poised to surge even higher. In 2012, according to Wells Fargo, e-cigarette sales generated roughly $300 million at retail. But that number is expected to grow exponentially—developing into a $1 billion category as early as 2013 and offering gross margins comparable to traditional cigarettes within a decade. While Wells Fargo's figures didn't differentiate between sales of disposable and rechargeable e-cigarettes, one thing is for sure: the opportunity for new sales is boundless. "It's a fairly new category, and that's what I find so exciting," Bonnie Herzog, a senior market analyst at Wells Fargo, told me during the NATO Show in Las Vegas in April. "I'm making some pretty big predictions. I think it's possible that consumption of e-cigarettes could surpass that of traditional cigarettes within the next decade." In CSD's annual tobacco issue, Herzog and a host of other tobacco industry experts weigh in on the future of e-cigarettes and the tobacco category overall. While the FDA pokes its nose around e-cigarettes and threatens a new round of legislation and additional taxation, now is the time to capitalize on the enormous profit potential this category offers. Focusing on Customers Since consumer behavior and motivations can vary dramatically, the effectiveness of your c-store marketing programs should differ systematically across each category. These issues are key to any formal category management process where retailers must define the role that each ual tobacco and a host co industry in on the future of nd the tobacco all. While s its nose rettes a Driving New Business By John Lofstock, Editor.