E-Cigarettes: Japan Tobacco International
Japan Tobacco International (JTI) did not have a stake in the new world of e-cigarettes, until the company took a minority share in the Californian start-up company Ploom, signing an agreement in 2011 to commercialise its nicotine ‘vaporisers’ outside the USA. In June 2014, JTI acquired UK e-cigarette brand E-lites from previous owner Zandera.
The Ploom tobacco pod is widely available in the US through a network of thousands of domestic retail stores. The company launched Ploom on to its domestic market Japan in December 2013. Before that it was introduced — outside the U.S. — in Austria in May; and in Korea and Italy since. Online Ploom is available at ploom.com and locally for instance at ploom.jp operated by JT Creative Service Co. Ltd. - a subsidiary of JTI.
Ploom's owners James Monsees and Adam Bowen met studying art and mechanical engineering in Stanford’s graduate product design program. The young company, founded in 2007, came close to running out of money several times before JTI came on board. JTI since coordinates the manufacture of modelTwo tobacco pods in Trier, Germany, and handles Ploom’s international marketing from its headquarters in Geneva.
Heating Instead of Burning
The Ploom vaporizer is a pocket-sized smoking alternative device, like PMI's “heat not burn” product. It heats tobacco contained in pods to a constant temperature, vaporizing nicotine and flavours without burning the materials or producing smoke. Each pod, described by some as baby Nespresso capsules, can be used for about 10–15 minutes.
While many e-cigs are designed to look like conventional cigarettes—white sticks with glowing lights at the end, Ploom’s modelTwo looks more like a pen. The power button halfway has a LED light to indicate the strength of its rechargeable lithium ion battery. Bloomberg Businessweek produced this graphic (picture 2) to show its working.
This $40 model was released in July 2013 and comes with an assortment of pods that contain either pure tobacco or tobacco-heavy flavor blends such as Orchard, which tastes of peaches, and Rocket, which includes hints of cinnamon and mint.
The earlier model, Pax, is larger and cylindrical. Released last year at $250, it is a vaporizer with a pop-out mouthpiece and a lid that rotates open to reveal a small compartment for loose-leaf tobacco or other substances. By vape standards, it’s slim, stylish, and easy to use, Businessweek thought. Monsees says Ploom isn’t targeting the market for marijuana, but he doesn’t seem to mind taking advantage of the Pax’s potential for repurposing.
Ploom's slogan is: "It's time to rethink tobacco". To promote the e-cigarette, the company set up what is to be a series live music sessions with Filter Magazine, marked #RethinkMusic.
In early 2014 E-lites was one of the leading e-cigarette brands in the UK. It was the first e-cigarette brand to be available for purchase in the big four grocery multiples (Tesco, Sainsbury's, Asda, Morrisons) in addition to being sold at wholesalers and smaller retail outlets, and having the highest number of visitors to its website than any other brand in the e-cigarette industry. In 2013, its products accounted for over £40 million in retail sales.
In addition to reporting that E-Lites were available for sale in more than 20,000 stores in the UK, then CEO of E-lites, Adrian Everett, said:
"Conquering the UK was an essential first step in the E-lites global journey. With our current trade expansion plans, launch of our new product later this year and significantly increased investment into our brand, we aim to take an even bigger share of the current £2 billion global e-ci market."
Talking of its acquisition of E-Lites JTI said that the deal is expected to have a minor effect on its performance and cash flow in fiscal 2014.
- For more see: E-cigarettes: Marketing
Other TobaccoTactics Resources
- D. Robinson, Japan Tobacco joins rivals in e-cigarette market with E-lites buy. The Financial Times, 11 June 2014
- Brad Stone, Ploom's E-Cigarettes and Vaporizers Use Real Tobacco, BloombergBusinessweek, 21 November 2013, accessed December 2013
- Tobacco Reporter, JT to launch Ploom on domestic market, 28 November 2013, accessed February 2014
- Ploom, Ploom and FILTER #RethinkMusic: Jamestown Revival, 6 February 2014, accessed February 2014
- E-lites becomes the first brand to conquer the big four, SourceWire News Distribution, 6 March 2014, accessed June 2014