First, I have no positions in Altria or any tobacco stock period. Further, I have no vested interest in the success or failure of Altria, I just want to provide some information as a shop owner who talks to other shop owners and talks to close to a 100 Juul or pod based system users on a weekly basis. My shop is located in Northern, VA and the average household median income within a 5 miles of me is $119k. I am stating this to give you an idea of the amount of disposable income my clientele have.
I saw a post here a few days ago about a guy curious about MO (I think he was interested in getting a long position but I could be mistaken). A lot of people were speculating about the viability of Juul as a market leader going forward and speculating on sales trends and potential vulnerabilities. I figured I'd give you guys a fair look at what's actually happening in shops.
Long story short, my Juul users are flocking to other devices/pods en mass and other shop owners are reporting the same in light of significant customer frustration and encouragement by frustrated (at Juul) shop owners.
Juul's strength of position relied on two things: coolness among teens/young adults and convenience for the ease of use of the device. As a result, the majority of my Juul customers fit two categories: college kids + professionals that want to quit but don't want to deal with any "hassle".
Juul is no less cool among college kids, however college kids I'm finding are hilariously non brand loyal when it comes to what goes in their Juul device. The biggest threat to Juul for this demographic are compatible pod companies which are popping up every day. Every major distributor I deal with now carries at least one if not more compatible pod systems that sell for what the Juul pod wholesale used to go for or less. The one brand I'm seeing with the greatest potential to supplant Juul is called Eon (not publicly traded) and they produce the Eon+ Pods which are Juul compatible. They are also at a higher nicotine strength, which I thought would turn off my Juul users but apparently is a positive for most of them. They also hold more liquid by volume (nearly 40% more) and offer a wider range of flavors than Juul, while matching their popular offerings (e.g. Mango). After testing their flavors, we put the Eon+ pods on the shelf and I'm selling them as fast as I'm stocking them. For my customers who switched to the Eon+ I'm seeing high satisfaction in both flavors. The majority of the college Juul users that come into my shop now walk out with an Eon+ pod instead of a Juul pod and all have reported satisfaction with the flavors. It's a no-brainer really: higher nic, more varied fruit flavors (Lemonade, Green Apple, Watermelon) and more per volume at a lower cost. I can sell Eon+ pods at a good margin for the cost that I'm being offered to carry actual Mango Juul pods. I sold out my Mango Eon+ pods in a handful of days and placed a large order to replenish, that's how well they are selling.
For users that are done with Juul all together, many are switching to pod based systems that are designed to be refilled with salt nicotine (the same type of e-juice found in Juuls) which offers 100's of flavor choices. Typical pod systems go for $35-$80 depending on the company and quality of the pod system, and the juices go for $20-$25 depending on the shop. The difference in usage cost here presents huge savings for the users: a 30ml of salt nic goes for roughly $22 in a normal B&M setting, while Juul packs (4 pods) has 2.8ml of e-juice selling for $16-$20 (Juul mango pods can go for as high as $25 in some shops in some cities). The effective cost savings are also a no-brainer and again customer satisfaction is higher as not only are they saving money, but they have more flavors and some of the devices "hit better" (think bigger draws, higher temps, etc...).
So yeah, compatible pods and refillable pod systems are huge threats to Juul while the company is in a state of flux as it pertains to the retail operations. Of the 62 customers that have switched to either option, not a single one has come back to buy Juul brand pods. Even still, there are some Juul users who are buying blank pods and filling with the salt nic as well and those folks haven't moved back to Juul pods either (think this number for me is at 7). Juul customers are eager to switch and that would worry me significantly about holding MO long considering the cost of their recent investment. There is genuinely no brand loyalty when it comes to what goes in their (college kids) device and among my older clients there is no brand loyalty to the device itself (the college kids prefer to keep their Juuls but switch to compatible pods, the older professional group tend to be the ones switching to refillable systems).
So yeah, feel free to ask me any questions about my writeup and/or Rampart.
Submitted January 07, 2019 at 10:07AM by VapeFix http://bit.ly/2RvNsmU
