E-Cig Industry Predictions For 2013

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With 2013 underway, I’d like to make a couple predictions about the electronic cigarette industry for the year to come.  Some might be in line with what most people expect while others might not.

FDA continues to debate regulation but fails to institute anything solid.

Although many voices expect 2013 to be the year for the FDA to hand down determined regulations for the e-cig industry, I’m just not convinced.  If the public hearing that the FDA held a few weeks ago proved anything, it was that they aren’t sure what to do or how to do it.  I anticipate a lot of discussion, but ultimately little decision.  Even if the FDA hands down a few token decisions, they won’t likely make many waves for an industry that ended 2012 with more momentum than most people realize.

Essentially, if regulation happens for the e-cig industry in 2013, it will be largely self-imposed and minimally detrimental to the forward momentum of industry growth.  The primary focus on regulation doesn’t even need to be on sales and claims.  Simply put, the quality of products (whether shipped in from foreign operations or mixed in a kitchen sink here) needs to be put under a microscope by people that can check for abnormalities, impurities, and precision.  The processes used to make the products also need to be checked.  Small homegrown e-liquid operations should be supported, but I for one would like to know hands are being washed and beakers are being sterilized.

E-cigs in movies and on TV become the real debate.

The biggest issue to face electronic cigarettes in 2013 will be the fight against restrictions or bans on the use of electronic cigarettes in movies and on TV.  The Federal Communications Commission (FCC) was largely behind the decision to prevent cigarette advertising on TV and the Motion Picture Association of America (MPAA) gives tougher ratings to movies with depictions of smoking.  As electronic cigarettes penetrate movies and TV and become more broadly visible products, the debate (which has already started) will get heated.

Inevitably, organizations that brand themselves the protectors of our children and family values with begin raising hell over the very depiction of something resembling smoking on TV.  These groups are often loud and completely unwilling to accept facts — and who needs to when your stance stands on nothing more than moral high ground.  We may not see this as much in movies, but certainly the use of e-cig advertising is likely to raise a few eyebrows.  The decisions made here will have a profound impact on the visibility of electronic cigarettes.  Hopefully these decisions won’t be made flippantly.

The e-cig market share arms race truly begins.

The appearance of TV advertising is the first real strike in what will turn into an all out war in 2013 to become the brand synonymous with electronic cigarettes in the minds of American consumers.  Despite hazy regulation and the threat of bans, slanderous protesters, questionable research, and more, the biggest companies in the industry will take off the kit gloves and throw it all on the table so to speak.  The prize for the winner: a permanent piece of what Wells Fargo believes will surpass the tobacco cigarette market inside the next 10 years.

And why wouldn’t they go all in?  They should.  Things are moving so quickly that even the biggest companies involved like NJOY, Blu, Lorillard, R. J. Reynolds, V2, Green Smoke, and others will only get one serious chance to become the major player.  Similar comparisons can be drawn to the massive fights to become the search engine or the social network.  These companies may want to be the Google or Facebook of e-cigs… most of them may go the way of Ask Jeeves, Dogpile, Myspace, or Friendster.  By the end of this year, we may already know who.

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