Altria Group Inc (NYSE:MO), the parent company of Philip Morris USA, will launch its first electronic cigarette under the MarkTen brand in Indiana in August. The tobacco company will also expand its smokeless products, according to report from Michael Felberbaum of Bloomberg.
Altria Group Inc (NYSE:MO), through its subsidiary NuMark, is the last major tobacco company in the United States to sell an electronic cigarette. The tobacco industry is confronted with various challenges such as tax increases, smoking bans, health concerns, social stigma, which prompted the entire industry to diversify beyond traditional cigarette products.
Altria Group’s Statement:
Marty Barrington, chief executive officer of Altria Group Inc (NYSE:MO), stated that the company invested a significant amount of time in studying the category and its business opportunity during an investor presentation on Tuesday. “”The category is in its early stages and time will tell how it will evolve,” said Barrington.
Altria Group Inc (NYSE:MO) did not comment on its plans to advertise the electronic cigarette on TV or to expand its availability in a statewide test market.
According to the company, MarkTen is a disposable e-cigarette available in tobacco and menthol flavors. Smokers will be able to re-use it if they buy a separate battery recharging kit and additional cartridges for the nicotine solution that creates vapor.
Altria Group Inc (NYSE:MO) said the “Four Draw” technology behind its e-cigarette is designed to provide consumers with a “more consistent experience” similar to a traditional cigarette. The e-cigarette is made in China, but the liquid nicotine solutions for the cartridges are manufactured in the United States. The selling price for the e-cigarette is around $9.50.
Data from the Centers for Disease Control and Prevention (CDCP) show that more than 45 million Americans smoke cigarettes. Some people believe that e-cigarettes address the addictive and behavioral aspects of smoking.
Reynolds American, Inc. (NYSE:RAI) recently announced its launch of a new version of its Vuse brand e-cigarette in Colorado in July, and plans to sell the product nationwide. Lorillard Inc. (NYSE:LO) acquired Blu Ecigs, an e-cigarette maker in April 2012. The company expanded the sale of its e-cigarette to more than 80,000 retail outlets.
At present, the e-cigarette market has more than 250 brands and its users increased from thousands in 2006 to millions worldwide. Based on estimates by analysts, sales for e-cigarettes will climb to $1 billion this year. Some speculate that the consumption of e-cigarettes will exceed the traditional cigarette over the next decade.