Many tobacco control advocates have claimed that Juul is not intended to be a smoking cessation product, but instead a tool to drive demand for cigarettes. A new blog post from Bloomberg examines some of the financial implications of the Juul epidemic – and the article delves into just how much money people are willing to spend on these electronic cigarettes.
How Much Are Juuls At Speedway?
The first significant vaping epidemic hit the US in the spring of 2018. By the end of the year, more people across the country were vaping than smoking cigarettes. Retail sales of electronic cigarettes hit $16 billion in 2018, up from $3 billion in 2017. The market value of the e-cigarette industry skyrocketed, as investors bet that the popularity of these products would continue.
Now, in the middle of the year 2020, the trend seems to have reached its peak. According to the American Association of Advertising Agencies (4A’s) latest data, 47.2% of Americans reported seeing ads for e-cigarettes in the last 30 days, while only 25.1% said they had seen ads for traditional cigarettes in the last month. And just last week, the Federal Trade Commission (FTC) revealed that it had received more than 8,400 consumer complaints in the last year alone about deceptive marketing by electronic cigarette companies – making it the second most complained-about product category overall after cell phones.
Are Americans Really Spending More On Vaping?
Despite growing concerns about the health effects of vaping, the data shows that consumers are indeed paying more for electronic cigarettes than they have in the past. The average price of a pouch of Juul has nearly tripled since early this year, from $8.76 to $24.80. The price of a pack of traditional cigarettes has also increased by about 40%. These increases come as the average American now spends $10.68 on tobacco products each month, according to the US Food and Drug Administration (FDA).
While the price of tobacco products have generally increased in recent years, the rate at which people are spending more money on these products is unprecedented. According to the American Institute for Economic Research, the combined monthly income of an average household in America is now barely above the pre-pandemic level of $10,700. In other words, consumers are having to work harder to make both ends meet. And with the unemployment rate currently at 3.4% and no end in sight to the pandemic, this is no mean feat.
Why Are Americans Spending More On Vaping?
Though it is too soon to say for certain, there are a few potential explanations for this trend. First, there is the undeniable fact that electronic cigarettes are much more affordable than traditional cigarettes. Second, many people are switching to vaping because they see it as a much healthier option than smoking. Third, a large number of Americans are now looking for ways to have fun and be social, so they are turning to electronic cigarettes to satisfy their craving for a thrill or to indulge in a new experience.
One thing is for sure – as long as the current state of affairs continues, Americans will continue to have a taste for more affordable luxury. Bloomberg notes that the vape market is effectively a $16 billion business, and given the trajectory it seems clear that as soon as people feel better they will be buying more expensive products to show off their affluence.