The End Of Vaping As We Know It?

FDA regulation and big tobacco squash ecig innovation?

Will FDA Regulation + Big Tobacco Profit Seeking = Squashed Innovation In ECig / Vaping Marketplace?

In thriving industries and marketplaces, innovation is everything. Even more-soo when the industry in question is fundamentally disruptive; whether the internet, tablet computers or – Electronic Cigarettes.

When it comes to E-Cigs, innovation can, and should happen. In a BIG way.

The fact that the industry has innovation at its core is not in doubt – products have evolved at breakneck speed ever since they emerged on western shores in 2007. The result has been steady increases in satisfaction, product quality, consumer demand (along with the competition needed to fuel the ‘virtuous cycle’).

What is in serious jeopardy – thanks to details in the FDA’s newly released ‘Regulatory Proposal’ for E-Cigarettes – is the potential for future innovation.

This points to dire times for all ‘Vapers’ but its especially scary stuff if you are a small to medium-sized electronic cigarette business. Whether you are a local Vape Shop, boutique USA E-Liquid label a small-batch PV designer (or even if you happen to be one of the major Chinese E-Cig names like Kanger, Boge, JoyeTech, Innokin or AnyVape; outfits who have all been acting more like Apple under Steve than, well Chinese labor shops recently).

Innovation tends to spring from openness and freedom.

Think about the biggest business innovators of recent years, they either had nothing to lose (Facebook) or the kind of visionary at the helm (Apple) incompatible with restriction.

All of that is about freedom, not restriction. Because these guys literally had room to breathe, because they were encouraged to chase their bold, world-changing (and challenging) dreams, they were able to bring new products and services to millions.

Whether their inventions are a net win for the world and society ultimately isn’t so much the point – that they are clear examples humanity holds dear, as hope that our better selves might shine through is.

Through massive innovation they and others like them inspire and delight us as the heroes of our times. The other direction of course is monopoly (in various shades), and its something society has seen far too much of lately.

Is This Really The Same Old Tired Story? or… Have You Heard The One Where Something New and Wonderful Is Spoiled By Greed and Fear?

Electronic cigarettes manufacturers, at least those lacking in multi-national (monopoly sized) budgets, may find it incredibly difficult to innovate if the FDA (and Big Tobacco lobbyists) see these regulations through. This will stop the majority from improving their products, competing effectively and gaining market share.

Frankly this will stop Vaping as we have come to know it dead in its tracks.

The end result? An industry that is stifled, lacking in innovation, flooded with newly commoditized “E-CIGS” (think disposable, overpriced, underpowered and unremarkable) owned and monopolized by the few companies that can manage the fees and taxes required. Notably you probably won’t hear a critical word from Lorillard about the recent FDA deeming (chances are good Altria and Reynolds are all smiles as well).

Lorillard are the third biggest tobacco company in the states and were the first of the ‘Big 3′ tobacco giants to swoop and buy up a successful ecig brand wholesale. Their acquisition of Blu Cigs (joined now by newly re-branded SkyCig, one of the largest UK ecig labels, now officially Blu eCigs UK) has rocketed Blu to approx. 50% of all USA Retail Sales.

While Blu no doubt was a trailblazer in the space, the product itself leaves more than a little to be desired. Frankly it’s miles away from being a best-in-class product, especially in 2014. The success instead has mainly been driven thanks to massive entrenched distribution chains combined with a megabucks scale new marketing campaign.

Just for the record, go here for Lorillard’s response to the deeming regulation announcement.

The e-cig advocates take a view

Greg Conley is the President of the American Vaping Association (AVA). He recently released a statement on the deeming that the FDA supplied:

“We are greatly concerned that the Food & Drug Administration’s proposal to regulate electronic cigarette products as ‘tobacco products’ will hand the electronic cigarette market over to Big Tobacco and potentially ban the sale of products used today by tens or hundreds of thousands of ex-smokers. This proposed regulation would enact regulatory barriers that will be insurmountable for many small and medium sized electronic cigarette companies. While we support banning the sale of electronic cigarettes to minors, we also believe that the FDA’s current regulatory scheme is entirely inappropriate for these innovative, technology-driven products.”

Source: AVA website http://vaping.info/deeming-regulations-statement

We are looking at a double-edged sword here – even if some among us did see it coming

Fair enough, we were all tired of the FDA taking their time, and the incredible amount of bad press the e-cig industry received over the last two years, but it seemed like a Gift from the Gods to finally receive some proper attention from them. And what’s more, initial reactions – including those expressed right here on Smokeless.net – were mostly those of relief.

How naive to think things could be what they seem – (please pardon the cynicism) – heck there wasn’t mention of flavors, e-liquid or nicotine strengths.No axing of online sales (not officially at any rate) and as the responsible majority hoped to see the issue of age-restriction is tackled head on.

Brands and Vapers alike don’t want children to be exposed to e-cigarettes, most of whom restricted under-age sales already through their own initiative. The FDA doesn’t want children exposed to the stuff, and no one can argue with that. So that elephant has been kicked out of the room, sadly it seems to serve more a distracting role than simply a positive one.

Where is the money for e-cig innovation?

But this still leaves the rest of the deeming statement the FDA made (even if some educated reading between the lines is required to recognize the threats left unsaid beneath the good stuff). To be clear – we think Greg (and GrimmGreen too, see video) have a point here and its one that needs to be made clearly known to everyone with far too much to lose while these restrictions remain ‘proposed’ only.

If all but the biggest, most flush players in the industry can’t afford a meal-ticket, what has been a thrilling banquet is going to look a lot more like KFC shortly. Like other pay-walls, the framework the FDA proposes would tidily take care of eliminating all the chaotic and messy innovation that we e-cig enthusiasts LOVE and average sized e-cig businesses and manufacturers require in order to exist.

Without explicitly saying as much, The FDA’s proposed system will mean that the majority of new products won’t get onto the drawing board let alone off it.

Requiring every new e-cigarette product prove itself ‘SAFE‘, through costly fees, time-consuming paperwork & red-tape, will effectively serve to destroy the fair market ecosystem that nurtures this thriving industry (and which made possible the very rise of e-cigarettes in the first place). Freedom to innovate will have left the building by proxy.

The FDA’s own arbitrarily defined process is set to become an unreasonably pricy tollbooth through which new products will have to pass before seeing the shelves – virtual or otherwise.

Even if somehow cost were not a factor, it is doubtful at best that such a system is equipped to handle the volume and range in type of new products that collectively make up what we know as ‘Vaping’. Think e-liquid flavours and new blends, amazing new tanks & clearomizers, wildly diverse battery types, device complexity and styles – from drip-tips to bottom-coils, USB passthroughs to USB chargers. From Mod to Mini, RY4 to KR8, variety is at the heart of this new device category (and equally new past-time).

This diversity is crucial to the ongoing success of electronic cigarettes.

Keeping innovation alive and well is crucial for electronic cigarettes as the effective health ‘solution’ they have proven to become – a less harmful tobacco substitute, salvation from all that smoke. However…

Vaping Is Not Smoking – E-Cigarettes Aren’t Cigarettes

All of this diversity – the result of ongoing innovation - in part marks just how true the above statement is. It is an equally essential ingredient of the passionate and richly nuanced ‘vaping’ culture and growing e-cig community.

This perhaps unexpected (and by some very unwelcome) truth – that in more ways than they are similar, e-cigs and traditional cigarettes are vastly different from one another – gets at the crux of the issue on many levels, even if not offering a clear solution.

In most ways the FDA (and certainly Tobacco companies) are treating e-Cigs as if they were tobacco cigarettes. It is in their best interest to continue framing them as if they were essentially an ‘alternative cigarette’ – but a cigarette just like those we’ve all come to know (and hate).

The E-Cig Has Evolved Into A Square Peg & Won’t Succeed Any Longer At Fitting Into That Round Hole – But That Won’t Stop The Powers That Be From Trying

have to face huge costs just to get their product to market, including registration fees and so on, how could they possibly have any money left to use for innovation?

It is probably the case that they won’t have the money. Big Tobacco will, and this means that they will continue to dominate the market, squeeze out the little guy, and prevent healthy, dynamic innovation from taking place in the industry.

The other side of the coin would have meant electronic cigarettes probably being sold as medicinal products. We don’t really know which is worse. Having e-cigs sold in drugstores or facing a creatively barren future against the big tobacco companies. Why have to choose when it makes so little sense?

Right now, we feel that we have gotten rid of one fairly significant problem, even if one more about optics than reality (the age-restriction ‘think of the children’ issue) and now face an industry that has a huge, utterly unique problem. That problem is all about where e-cigs belong in the modern commercial world.

The FDA seems determined to take the products under the wing of tobacco, even though they really aren’t tobacco based and are currently thriving most thoroughly when being used and celebrated in fully new ways that tobacco cigarettes never were nor could have been.

We’ll leave you with a final depressing picture of how things are headed as they stand right now:

Now, a company has to register any new product through the FDA, and this could take a long time and cost a lot of money. Lorillard doesn’t have to worry about this. Even if they didn’t bring any more e-cig products to market again, ever, they would still have their current products, which have the kind of market share that most e-cig companies could only dream of.

For Big Tobacco, we believe that’s what you call a win.

How will this problem be solved?

Not by being quiet or passive – and certainly not without collective questioning, noise-making, raising a little hell while it is still possible to turn the tide.

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