The development of the e-cigarette market in the United States

Content

1. U.S. e-cigarette and vape market size

2. Sales in the U.S. e-cigarette market

2.1 Flavored Electronic Cigarette Sales

2.2 By product type

2.3 US e-cigarette distribution channels

3. How many people in the US use e-cigarettes?

4. Health Orientation About E-Cigarettes in the U.S.

4.1 Key findings from the 2020 Surgeon's Report

4.2 The Bottom Line on Adults Using E-Cigarettes to Quit Smoking

5. The impact of e-cigarettes on teens in the United States

5.1 Electronic Cigarettes (E-Cigarettes)

5.2 Flavors and marketing make e-cigarettes appealing to young people

5.3 FTC report: Disturbing trends in e-cigarettes affecting the health of young Americans

6. U.S. e-cigarette policy, taxation, legal regulation

6.1 Restrictions on Sales to Minors

6.2 Electronic Cigarette Retail License

6.3 Smoke-free indoor air laws, including e-cigarettes

6.4 E-cigarette tax

U.S. e-cigarette and vape market size

The U.S. e-cigarette market size was estimated at $6.1 billion in 2020 and is expected to reach $7.4 billion in 2021. It is expected to expand at a compound annual growth rate (CAGR) of 27.3% from 2021 to 2028. Market growth can be attributed to rising awareness of safer tobacco alternatives. Electronic cigarettes and electronic cigarettes have grown in popularity as an alternative to tobacco products. These sophisticated mechanisms are designed to deliver the same addictive nicotine found in cigarettes without the harmful effects of tobacco smoke. Users are focusing on adopting personalized vape vaporizers. These atomizers provide the best vaping user experience and effectively meet the needs of regular and most active vapers. 

Health problems related to smoking have increased significantly over the past few years, as individual organizations and governments take the issue seriously. Awareness of health concerns is expected to drive market growth over the forecast period. Numerous studies conducted by the Medical Association have shown that e-cigarettes and e-cigarettes are safer than traditional cigarettes. Furthermore, the growth of the market is characterized by rising awareness among young people. Furthermore, vendor focus on customization options and continuous development of new products are expected to drive market growth over the forecast period. In addition, the cost-effectiveness of these devices has also increased customer acceptance.

Sales in the U.S. e-cigarette market

The use of e-cigarettes and vape mods is rapidly increasing because these devices do not contain any tobacco. Most of the U.S. population is considering these devices as a way to quit smoking. Some people are turning to e-cigarettes and e-cigarettes as an alternative to smoking. Additionally, these products are available in non-nicotine and nicotine forms, so many consider these devices to be the better option.

The vape mod segment dominates the market, accounting for over 51.0% of global revenue in 2020. Rising demand for custom mods is expected to drive the growth of this segment over the forecast period. Using these modules, customers can automatically control temperature levels. With this flexibility, users can control things like temperature, power, and steam generation. This is due to the low cost of rechargeable e-cigarettes. Rechargeable product variants include built-in batteries, which can be considered ideal for extended use.

The e-liquid segment is expected to witness the highest growth over the forecast period. E-liquids are readily available in a variety of flavors such as menthol, chocolate, fruit and nuts, and tobacco, which is expected to encourage the use of e-liquids. Furthermore, the availability of e-liquids with low toxic content is expected to further drive the growth of this segment. Compared to tobacco products, e-liquids have a price advantage and are available in a variety of price ranges, increasing the affordability of these e-liquids.

Since the introduction of electronic cigarettes (electronic cigarettes) to the U.S. market in 2007, the market has grown to include different product types (eg, based on prefilled cartridges and disposable vapes) and flavored e-liquids (eg, fruit, candy, mint, mint) alcohol) and tobacco flavors, which helped increase teenage use. E-cigarettes have been the most commonly used tobacco product among U.S. youth since 2014; in 2019, 27.5% of high school students reported current use of e-cigarettes. To assess unit sales trends of e-cigarettes in the U.S. by product and flavor type, the CDC, CDC Foundation, and Truth Initiative analyzed retail scanner data from Information Resources, Inc., from September 14, 2014, to May 17, 2020. Total e-cigarette sales increased 122.2% during this period, from 7.7 million to 17.1 million every 4 weeks.

According to a March 17, 2022 report by the Federal Trade Commission, e-cigarette sales, in general, have grown substantially between 2015 and 2018 (from $304.2 million to $2.06 billion, respectively).

Flavored Electronic Cigarette Sales

Additionally, the FTC found a dramatic shift in sales from tobacco-flavored vaping products to fruit, candy, and dessert flavors. For example, sales of tobacco-flavored e-cigarette pods fell from 47.2% in 2015 to 21% in 2018, while sales of "other" flavored pods tripled during this period, from 13.8% in 2015 By 2018 it was 42.1%.

Among other flavors, fruit-flavored pods are the most popular, with sales increasing by 600% from 4.7% in 2015 to 29.7% in 2018. Sales of candy and dessert-flavored pods saw similar growth, as well as sales of disposable e-cigarettes in those flavors.

By product type

From September 2014 to August 2019, pre-installed ink cartridge products increased as a percentage of total sales (47.5% to 89.4%).

Between August 2019 and May 2020, the share of vape disposables in total sales rose from 10.3% to 19.8%, while the share of prefilled cartridge products declined (from 89.4% to 80.2%).

Mint sales increased from September 2014 to August 2019 (<0.1% to 47.6%) of prefilled pod sales; menthol sales decreased from August 2019 to May 2020 (47.6% to 0.3%), while menthol sales increased (10.7% to 61.8%).

Among single-use e-cigarette sales between September 2014 and May 2020, the percentage of menthol-flavored sales increased (<0.1 % to 10.5%) sales declined; total sales of all other flavors increased over the same period (17.2% to 62.1%).

E-cigarette sales increased over the 2014-2020 period but fluctuated overall and by-product and flavor type, which may be attributable to consumer preference and accessibility. Continuous monitoring of e-cigarette sales and use is critical to developing strategies at the national, state, and community levels to minimize the risks of e-cigarettes to individual and population health.

Retail sales data is licensed from IRI, Inc. and includes generic product code sales from convenience stores, gas stations, grocery stores, drugstores/pharmacies, big box stores, club stores, dollar stores, and military sales. Internet and tobacco store sales (including "vape shops") are excluded. E-cigarette products are classified as one into the following product types: pre-filled cartridge devices, disposable devices, and e-liquids. *Excludes vaping accessories and vaping devices that do not contain vaping oil, which represents 9.4% of sales and is not included. Products with clear flavor names are classified as tobacco, menthol, mint, or all other flavors (eg, fruit, clove/spice, candy/dessert/other confectionery, chocolate, alcoholic and non-alcoholic beverages). Ambiguous or conceptual flavors (eg, "fusion") (5.6%) were searched online and back-coded as one of four flavor categories. E-cigarette unit sales were normalized and aggregated at 4-week intervals from September 14, 2014, to May 17, 2020† ( 4 ). Total unit sales and the proportion of total unit sales by product type and flavor were analyzed using Stata (version 16; StataCorp). Trends over the period 2014-2020 were analyzed using Joinpoint (version 4.8.0.1; National Cancer Institute) and average 4-week interval percentage change (AIPC) and corresponding 95% confidence intervals (CI) were calculated. Statistical significance was defined as p<0.05. The study did not involve human subjects and was therefore not submitted for review by an institutional review board.

FIGURE 1. Total e-cigarette unit sales,* by flavor† — United States, September 14, 2014–May 17, 2020§

FIGURE 2. Percentage of prefilled cartridge* e-cigarette unit sales,† by flavor§— United States, September 14, 2014–May 17, 2020

FIGURE 3. Percentage of disposable e-cig* unit sales,† by flavor§— United States, September 14, 2014–May 17, 2020

US e-cigarette distribution channels

The retail store segment leads the market, accounting for over 84.0% of global revenue in 2020. The retail store allows customers to try a number of e-liquid flavors and see the various vaporizers available on the market. Users choose to visit these retail stores to make purchases. Hence, the popularity of retail stores is increasing in several states in the United States and the online segment is expected to register the fastest during the forecast period. Due to strict regulations on the sale and distribution of e-cigarettes, many vendors in the United States are choosing online channels as their preferred distribution channel rather than retail stores. Many social media platforms are used to sell and promote this electronic smoking device. However, many online retailers have also temporarily stopped taking online orders due to changes in the level of lockdowns during the pandemic.

How many people in the US use e-cigarettes?

E-cigarettes are the most commonly used tobacco product among teens.

In 2021, 2.06 million middle school students in the United States have used e-cigarettes in the past 30 days, including 2.8% (320,000) middle school students and 11.3% (1.72 million) high school students.

In 2020, 3.7% of U.S. adults currently use e-cigarettes.

In 2019, among current adult e-cigarette users, 36.9% had also smoked, 39.5% had ever smoked, and 23.6% had never smoked.

Among current adult e-cigarette users, the proportion of never smokers was highest among 18-24-year-olds (56.0%) and lower among older age groups.

Health Orientation About E-Cigarettes in the U.S.

Since the first Surgeon General's report on smoking and health was published in 1964, smoking prevalence among U.S. adults has fallen from nearly 43 percent to nearly 14 percent in 2018, the most recent year for which data on adult-use are available.

Some smokers have turned to e-cigarettes for help in quitting smoking, raising questions about the benefits and risks of using these products.

E-cigarettes entered the U.S. market around 2007 and were used by nearly 4 percent of adults by 2014. However, the current use of e-cigarettes among U.S. adults has declined in recent years. In 2018, 3.2% of U.S. adults were current e-cigarette users. About half of adults who use e-cigarettes also smoke regular cigarettes, a behavior known as "dual-use."

Regular smoking is associated with many serious diseases. The World Health Organization says smokers are more vulnerable to COVID-19 than non-smokers. Additionally, in the United States, the COVID-19 pandemic has had a profound impact on e-cigarette consumption. According to a study conducted by Gaiha University, nearly 56.4% of young Americans have reported changes in their use of e-cigarettes since the start of the COVID-19 pandemic. In addition, one-third of young people quit e-cigarettes, another third reduced their use of e-cigarettes, and the remainder either increased their use of e-cigarettes or switched to other nicotine or cannabis products. Thus, the study describes higher nicotine dependence, frequency of e-cigarette use, poorer online age verification, and increasing awareness of the health hazards associated with smoking in the medium term. This has led to high demand for alternatives to traditional cigarettes such as e-cigarettes.

Key findings from the 2020 Surgeon's Report

E-cigarettes are an ever-changing and heterogeneous group of products that are used in a variety of ways. Therefore, it is difficult to generalize about smoking cessation effects based on clinical trials involving specific e-cigarettes, and there is currently insufficient evidence to conclude that e-cigarettes generally increase quit rates.

However, the evidence is suggestive but insufficient to infer that use of nicotine-containing e-cigarettes is associated with increased rates of smoking cessation, and evidence is suggestive but insufficient to infer that more vs less e-cigarette use Frequent use of e-cigarettes is associated with increased rates of smoking cessation compared to cigarettes.

Food and Drug Administration (FDA)-approved smoking cessation medications and behavioral counseling are effective treatments for smoking cessation, especially when used in combination.

The Bottom Line on Adults Using E-Cigarettes to Quit Smoking

Overall, studies on whether e-cigarettes increase quit rates are uncertain.

Some studies have shown that the use of nicotine-containing e-cigarettes is associated with more smoking cessation than the use of nicotine-free e-cigarettes, and more frequent use of e-cigarettes is associated with more cessation of smoking than less use of e-cigarettes.

The FDA has not yet approved e-cigarettes as a smoking cessation aid, and more research is needed on whether e-cigarettes are effective for smoking cessation and to better understand the health effects of e-cigarettes.

E-cigarettes are not safe for adolescents, young adults, pregnant women, and adults who do not currently use tobacco products.

For adult smokers to gain any meaningful health benefits from e-cigarettes, they need to switch entirely to e-cigarettes and quit smoking and other tobacco products entirely.

Among those who switch entirely to e-cigarettes, the ultimate goal should also be to stop using e-cigarettes entirely for maximum health benefits.

People who smoke should discuss proven ways to quit smoking with their doctor.

The impact of e-cigarettes on teens in the United States

Preventing youth use of tobacco products is critical to ending the tobacco epidemic in the United States.

The use of tobacco products is primarily initiated and established during adolescence.

Nearly 9 in 10 adults who smoke every day have their first attempt at smoking at age 18, and 99 percent at age 26.

In the United States, about 1,600 youth smoke their first cigarette every day, and nearly 200 youth start smoking every day.

Flavors in tobacco products can make them more attractive to young people.

By 2021, 80.2% of high school students and 74.6% of middle school students who had used tobacco products in the past 30 days reported using flavored tobacco products during this period.

By 2021, 79.2% of high school students and 79.2% of middle school students who used e-cigarettes in the past 30 days reported using flavored e-cigarettes during that time.

Use of any tobacco product, any combustible tobacco product, multiple tobacco products, e-cigarettes, cigars, and smokeless tobacco currently used by middle school students decreased in 2019-20. These declines resulted in an estimated 1.73 million fewer current youth tobacco product users (4.47 million) in 2020 compared to 2019 (6.2 million).

Tobacco use among current high school students in 2021. Any tobacco 13.4%, e-cigarettes 11.3%, cigars 2.1%, cigarettes 1.9%, smokeless tobacco 1.2%, hookah 1.2%, nicotine pouches 1.1%, heated tobacco products 0.8%, pipes 0.4%

Electronic Cigarettes (E-Cigarettes)

E-cigarettes have been the most commonly used tobacco product among teens since 2014.

In 2021, about 1 in 35 middle school students (2.8%) will report that they have used e-cigarettes in the past 30 days.

In 2021, about 1 in 9 high school students (11.3%) will report that they have used e-cigarettes in the past 30 days.

Many young people use two or more tobacco products.

In 2021, approximately 1 in 100 middle school students (1.3%) and nearly 4 in 100 high school students (3.8%) reported the current use of two or more tobacco products in the past 30 days.

In 2021, approximately 4 in 100 middle school students (4.0%) and nearly 15 in 100 high school students (14.6%) reported that they had tried two or more tobacco products.

Flavors and marketing make e-cigarettes appealing to young people

E-cigarettes come in a variety of flavors, including fruit, candy, mint, and menthol.

A 2013-2014 study showed that most young people who use e-cigarettes start with flavored varieties first, and that flavor is the main reason young people report vaping use.

In 2021, the majority of young people reporting vaping use used flavored varieties (84.7%). Among middle and high school students currently using e-cigarettes of any flavor in 2021, the most commonly used flavors are fruit (71.6%), candy, dessert or other sweets (34.1%), mint (30.2%), and menthol (28.8%).

On January 2, 2020, the U.S. Food and Drug Administration (FDA) finalized an enforcement policy that prohibits the sale of pre-filled cartridges of e-cigarettes in any flavor other than tobacco or menthol unless authorized by the FDA. The FDA has since taken additional steps to ban certain companies from unauthorized sales of flavored disposable e-cigarettes and flavored e-liquids that appeal to young people.

Some states and communities have restricted the sale of flavored tobacco products, including mint-flavored products.

E-cigarettes are also advertised using the same themes and strategies that have been shown to increase youth use of other tobacco products, including cigarettes. In 2021, roughly seven in 10 middle and high school students (70.3%) — more than 17.7 million teens — said they had seen an e-cigarette ad.

Widespread advertising of e-cigarettes, including through media that bans advertising of conventional tobacco products (eg, television), and the lower cost of some e-cigarettes relative to regular cigarettes, have facilitated youth use. 

Many young people also report using e-cigarettes because they are curious about the products.

FTC report: Disturbing trends in e-cigarettes affecting the health of young Americans

According to a March 17, 2022, FTC report, "The dramatic increase in flavored products raises serious concerns that such products may sustain or increase youth use of vaping products. It noted that a 2018 survey of high school students nationwide found that more than two-thirds of e-cigarette users use flavored products, and research shows that young people cite flavor as the main reason they use e-cigarettes.

That's a significant increase from 2016 when a national survey of high school and middle school students found that only 31 percent said the availability of "flavors like mint, candy, fruit or chocolate" was their main reason for using electronics. cigarette. In addition, 81% of teens said they used flavors the first time they tried e-cigarettes.

Details of advertising and promotional spending by domestic e-cigarette manufacturers from 2015 to 2018. The committee found that advertising and promotion spending more than tripled in three years, from $197.8 million in 2015 to $643.6 million in 2018. "The increase in advertising and promotions raises public health concerns," the committee said, as public health authorities have concluded that e-cigarette advertising exposure is one of several factors contributing to the recent surge in youth e-cigarette use.

Spending on free or heavily discounted vaping products more than doubled between 2015 and 2018, with some companies circumventing the FDA’s 2016 ban on free vaping samples by offering products for $1 or a similar amount.

The report also noted that between 2015 and 2018, price discounts paid to retailers or wholesalers to lower the price of e-cigarettes increased 14-fold, while spending on celebrity endorsers, social media influencers, brand ambassadors, and more was spent on promoting e-cigarettes. Cigarette products have grown even more—by nearly 15 times over the three years.

The report also showed a substantial increase in nicotine concentrations in single-use e-cigarettes sold between 2015 and 2018. In 2015, single-use products contained an average of 25 mg of nicotine per milliliter of e-liquid. That concentration increased nearly 60 percent in 2018 to 39.5 mg/mL, increasing their addiction. Cartridge-based e-cigarettes contain higher nicotine concentrations, with the most popular products having concentrations between 51 and 61 mg/ml, while sales of nicotine-free cartridges are negligible.

U.S. e-cigarette policy, taxation, legal regulation

Stringent government regulations in the United States are expected to hinder the market growth. Both the Centers for Disease Control and Prevention and the U.S. Food and Drug Administration have continued efforts to investigate distressing incidents of serious respiratory illnesses associated with the use of vaping products. Furthermore, the outbreak of COVID-19 is expected to hamper growth. Due to the COVID-19 lockdown, suppliers in the market have temporarily stopped production, and logistics providers are no longer shipping goods within and across borders.

Restrictions on Sales to Minors

As of December 31, 2021, all 50 states, the District of Columbia, Guam, the Northern Mariana Islands, Palau, Puerto Rico, and the U.S. Virgin Islands have passed legislation banning the sale of e-cigarettes to minors.

American Samoa and the Marshall Islands do not have any legislation prohibiting the sale of e-cigarettes to persons under a certain age.

Electronic Cigarette Retail License

As of December 31, 2021, 33 states (Alabama, Alaska, Arkansas, California, Colorado, Connecticut, Florida, Georgia, Hawaii, Idaho, Indiana, Iowa, Kansas, Louisiana, Maine, Maryland, Massachusetts, Minnesota, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, Ohio, Oregon, Pennsylvania, Rhode Island, Texas states, Utah, Vermont, and Washington), the District of Columbia, the Northern Mariana Islands, Palau, and the U.S. Virgin Islands have passed legislation requiring a retail license to sell e-cigarettes over the counter.

Smoke-free indoor air laws, including e-cigarettes

As of December 31, 2021, 17 states (California, Colorado, Connecticut, Delaware, Hawaii, Massachusetts, Minnesota, New Jersey, New Mexico, New York, North Dakota, Ohio, Oregon, Rhode Island, South Dakota, Utah, and Vermont), the District of Columbia and Puerto Rico have passed comprehensive indoor smoke-free air laws that include e-cigarettes. These laws prohibit smoking and the use of e-cigarettes in private workplaces, and indoor areas of restaurants and bars.

As of October 1, 2018, Alaska has implemented new legislation to ban smoking and vaping in private workplaces, and indoor areas of restaurants and bars. The legislation also includes the option for municipalities to opt-out of these regulations through a voter referendum. Because Alaska's municipalities are exempt from this legislation, it is not considered a comprehensive smoke-free indoor air policy that includes e-cigarettes.

E-cigarette tax

As of December 31, 2021, 30 states (California, Colorado, Connecticut, Delaware, Georgia, Illinois, Indiana, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Minnesota, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, Ohio, Oregon, Pennsylvania, Utah, Vermont, Virginia, Washington, West Virginia, Wisconsin, and Wyoming), the District of Columbia, Puerto Rico and the U.S. Virgin Islands have passed legislation requiring a tax on e-cigarettes. Twelve states (Connecticut, Delaware, Kansas, Louisiana, New Jersey, North Carolina, Ohio, Utah, Virginia, Washington, West Virginia, and Wisconsin) for each milliliter of liquid or taxation of e-cigarettes for consumable materials. Fifteen states (California, Colorado, Illinois, Indiana, Maine, Maryland, Massachusetts, Minnesota, Nevada, New York, Oregon, Pennsylvania, Utah, Vermont, and Wyoming states), the District of Columbia, and the U.S. Virgin Islands tax e-cigarettes at a specified percentage of the cost. Georgia, Kentucky, New Hampshire, and New Mexico tax closed vaping systems (prefilled pods) and open vaping systems (refillable pods) per milliliter of liquid as a percentage of a specified cost. Puerto Rico levies taxes on the vaping device itself (if it's disposable) and on nicotine cartridges per milliliter of consumable liquid.

In Indiana, the e-cigarette tax will go into effect on July 1, 2022.

References

1. E-cigarette Unit Sales, by Product and Flavor Type — United States, 2014–2020

https://www.cdc.gov/mmwr/volumes/69/wr/mm6937e2.htm#F1_down

2. STATE System E-Cigarette Fact Sheet

https://www.cdc.gov/statesystem/factsheets/ecigarette/ecigarette.html

3. Adult Smoking Cessation—The Use of E-Cigarettes

https://www.cdc.gov/tobacco/data_statistics/sgr/2020-smoking-cessation/fact-sheets/adult-smoking-cessation-e-cigarettes-use/

4. Quick Facts on the Risks of E-cigarettes for Kids, Teens, and Young Adults

https://www.cdc.gov/tobacco/basic_information/e-cigarettes/Quick-Facts-on-the-Risks-of-E-cigarettes-for-Kids-Teens-and-Young-Adults.html

5. E-cigarette Unit Sales, by Product and Flavor Type — United States, 2014–2020

https://www.cdc.gov/mmwr/volumes/69/wr/mm6937e2.htm

6. The Federal Trade Commission’s First Report on E-Cigarette Sales and Advertising Reveals Disturbing Trends Affecting the Health of Young Americans

https://www.ftc.gov/news-events/news/press-releases/2022/03/federal-trade-commissions-first-report-e-cigarette-sales-advertising-reveals-disturbing-trends