Grocers light up as e-cigarette sales soar 50 per cent in a year

The e-cigarette market is estimated to be worth £91.3m a year and is expected to be worth £340m by 2015

Simon Neville
Tuesday 30 December 2014 01:48

E-cigarettes, sports nutrition bars and gluten and dairy-free food were the fastest growing products sold in UK supermarkets and grocers in the last year, according to new data.

Insights firm Nielsen found that e-cigarette sales soared 50 per cent year-on-year, while traditional nicotine replacement products, such as patches and gum, have dropped by 6.1 per cent.

The e-cigarette market is estimated to be worth £91.3m a year and is expected to be worth £340m by 2015. Supermarkets have been particularly keen to cash in on the craze, particularly as tobacco counter displays are banned at larger stores.

Pharmacies, including Boots, have also started selling the products for the first time, and landlords have revealed that e-cigarette shops are some of the fastest-growing outlets on the high street.

Adam Leyland, editor of industry magazine The Grocer, who analysed the Nielsen data, explained: “As the Chancellor continues targeting the tobacco industry, cigarette sales continue to fall, down 2.2 per cent by volume; however, rolling tobacco sales are up 4.4 per cent. The rise of e-cigarettes is the biggest trend in this market, with Ten Motives overtaking E-Lites as the leading brand.”

Ten Motives has been one of the most successful independent brands in recent years, and holds the “Cirro” trademark for 31 products.

Traditional tobacco firms, including Imperial and British American Tobacco, have been slow to enter the e-cigarette market, and are playing catch-up, mainly through acquisitions. In 2012, the third largest US tobacco firm, Lorillard, paid £90m for Blu Ecigs, and bought Edinburgh based Skycig for £30m in October last year. Philip Morris’s owner, Altria – behind Marlboro and Benson & Hedges – set up its own brand, MarkTen, and also spent £66m buying Green Smoke in February.

Supermarket grandees, including the former Tesco boss Sir Terry Leahy and Sainsbury’s ex-head Sir Peter Davies, have joined forces with British American Tobacco to create a nicotine inhaler.

The growth in e-cigarettes is expected to continue as more people give up smoking. A recent ruling allows e-cigarette companies to advertise on television, although three adverts have been banned for “glamorising” smoking.

New health licensing rules are also expected to come into force, although companies have already started filing for medicine licences ahead of any changes.

The research by Nielsen also found that consumers’ love affair with the gym sent sports nutrition sales up 42.8 per cent.

The gluten-free bread brand Genius soared 49 per cent and dairy-free brand Alpro rose 20.3 per cent, helping the “free-from” market to grow by 15.4 per cent. It is now worth more than £500m in the UK.

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