The vape product category continues undergoing rapid changes as retailers adapt to new regulations and evolving consumer preferences. Convenience store owners walk a fine line staying compliant while meeting customer needs.
FDA Crackdown Highlights Importance of Following Vape Rules
In 2023, the Food and Drug Administration (FDA) ramped up enforcement actions against retailers illegally selling unauthorized e-cigarettes lacking proper regulatory approval. Violations carry fines and other penalties.
The FDA issued warning letters to over 200 c-store retailers this year for selling popular disposable vape brands like Puff Bar, Hyde, Elf Bar, and Esco Bar without approval. Regulators called some models “youth-appealing.”
Strict oversight aims to cut underage access and ensure product safety. But frequently changing rules cause confusion industry-wide. Retailers not complying jeopardize things for everyone.
“When some retailers don’t follow the rules, it continues to create pressure for all retailers,” said Nathan Arnold of Duchess Stores. “Additional signage mandates, more requirements and restrictions continue to hurt vape and other tobacco categories.”
Bans on Specific Models Disrupt Inventory Planning
Sudden bans on previously allowed items also disrupt operations. Distributors might supply once-legal products later deemed illegal. Retailers get stuck holding unusable inventory.
“There are distributors who have sold products to stores that later were banned products that the retailer was responsible for,” noted Keelye Gaither of KeyStop Stores. “This makes a retailer more curious when sourcing products for sale.”
Careful vetting protects retailers from fines and reputational damage if consumers get injured using non-compliant items. Staying current on designation changes takes considerable effort.
Flavored, High-Nicotine Vapes Gain Popularity
Despite flux on the regulatory side, consumer demand trends show some clarity. Flavored e-liquids and high-nicotine concentrations attract growing interest.
As rules limit flavor varieties, customers increasingly seek out remaining options. Higher nicotine content also drives repeat purchases from regular vapers.
“While customers are continuing to purchase these items, the selection is tightening, and the ever-changing rules and regulations create uncertainty about that category,” Arnold said.
Customer priorities focus on puff count and price when choosing vape products. Brands clearly conveying usage information gain advantage.
“Having products that clearly state these numbers makes it easier for us to retail,” noted Gaither.
Disposable Vape Sales Decline Amid Market Uncertainty
Latest sales data shows declining disposable vape unit volumes accompanied by steady dollar sales. Consumers shift toward rechargeable and pod-based systems.
For the 52 weeks ending October 8, 2023, vape dollar sales dipped 3.8% year-over-year according to Chicago-based Circana. However, unit volumes fell 8.3% over the same period indicating declining purchases of lower-priced disposable options.
“We see the category as being flat for the rest of 2023 and going into 2024,” said Arnold. “While flat is sometimes viewed as a positive in the tobacco space, this category has seen several years of growth, and that is concerning for us as a retailer.”
Careful Navigation Required Amid Changing Winds
Looking ahead, c-store retailers walk a fine line meeting consumer preferences while adhering to fluid vape regulations. Product assortment decisions carry heightened importance and complexity.
“We are looking to potentially offer cannabidiol vape products,” said Gaither. “For us, we really value the customer experience, and we do not want any products that we bring into our stores to negatively influence that.”
Constant monitoring of emerging rules and buyer behaviors remains essential to retail success in the vape category. Making missteps risks penalties plus lost sales and margin.
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