The vape industry is in a state of limbo.
Prime Minister Rishi Sunak pledged to crack down on the largely unregulated industry over environmental concerns and fears of underage vaping.
That’s bad for vapes.
On the other hand, Sunak has also laid out plans for a smoke-free Britain by 2030. Good-old combustible cigarettes, that it.
This is good for vapes.
Whichever way the tide is turning, independent vendors are evidently taking their shot at a growing industry, as there is a steady rise of independent vape stores across Britain.
According to the Local Data Company, another 233 independent vape shops opened in 2023, a significant jump from 2022’s net increase of 61 and 2021’s net fall of 23.
“Vapour products were the fastest-growing grocery category for the second year running, with UK revenues more than doubling to reach £1.7 billion. This represents an enormous and very attractive opportunity for operators to enter the industry, which is why so many new stores have opened,” explained Callum Sommerton, chief executive of Chill Brands Group PLC (LSE:CHLL, OTCQB:CHBRF).
Chill Brands has rapidly expanded its retail footprint across the UK and US, having secured listings for its products in more than 2,365 retail locations across the UK.
“Operators are often people who have themselves found vapes beneficial, usually as a smoking/tobacco cessation aid,” explained Sommerton.
He added: “The more commercial answer, however, is that the category itself is performing exceptionally well. Sales of traditional, combustible tobacco products continue to decline year on year as a result of sustained attrition to vape products.”
On top of underage vaping and litter concerns, the industry is also attracting bad press due to an illicit black-market trade.
What role do independent shops have in this?
According to Sommerton: “I would suggest that specialist vape stores are usually some of the most reputable retail operators in the industry. Their livelihood depends on the continued success of the vape category and so they are typically very conscientious, ensuring their conduct is compliant and reflects well on the industry.
“In contrast, there are many off-license and convenience store locations that do not apply the stringent age verification checks required of them under UK law… These problems are not unique to vaping and are still apparent in the alcohol industry.”
Mike Holliday, who acts as the vaping divisional lead at ElfBar distributor Supreme plc, said: “Independent vape stores can be more ‘in your face’ than other places, but not all vape stores take that stance… Therefore, it would be unfair to point the finger at them for this”.
However, Holliday did note that this in-your-face attitude to point of sale is seen to be making vaping attractive to a younger audience.
“To completely combat this, you should – like with bookmakers – only be allowed to enter the premises of a vape store if you are over the age of 18. Then at least the audience is guaranteed to be of age,” he stated.
The UK government recently finished a vaping consultation concerning the regulation of point-of-sale displays, vape packaging and product presentation.
Legislative outcomes of the consultation are pending.