What Are Electronic Cigarettes and Where Are They Heading

Online, September 16, 2013 (Newswire.com) - Google is reporting some 2.5 million searches a month for "Electronic Cigarettes". New E-cig companies abound, every day it seems a dozen new wannabees enter the fray. What is going on? Is this a fad? Is this a craze? Is this a Pet Rock, or a Rubik's cube? We think not. These things are here to stay, and a close look at Clearette Electronic Cigarettes, one of the leading growth companies in this increasingly crowded field, reveals why.

Where is the industry going? Exponential growth is clear. The Energy Drink market, at $12.5 billion in 2012 and projected to grow to $21.5 billion by 2017, is often cited as a comparable industry in terms of growth. Electronic cigarettes should be much bigger than that. While e-cigs sales exceeded $1 billion in US sales in the 3rd Quarter of 2013, Bonnie Herzog of Wells Fargo is saying the Electronic Cigarette Industry will be as big as the $100 billion tobacco industry in 7 to 10 years, others are saying sooner.

Top executive at Clearette Electronic Cigarettes, Leonardo Lombardo, says, "We didn't start operations in April of 2012 to make a quick buck or try something out. We were all in from the start. We knew that the concept--smoking without dying--was an easy call. In practice, however, we knew that quality of product, taste and pricing would create success for our company and our Independent Distributor partners. And we knew other guys would jump in with subpar stuff."

Clearette's success supports its business plan. A steadily increasing band of Independent Distributors is sweeping the country. Clearette commercials are nationwide and the Clearette Frog is becoming ubiquitous. Clearette's growth rates would startle and be the envy of any executive in any industry. Most importantly, the Clearette customer retention numbers are superb.

"When Mary walks into her local store to buy milk or whatever, and makes that impulse decision to buy a Clearette Disposable", Leonardo says, "We need her to come back and ask for and buy another one." And she does. In an increasingly crowded market, and in an environment where a simple Google "e-cig complaints" search unveils a stream of product malfunctions, poor taste, product returns and unhappy customers and retailers, Clearette's e-cigs are garnering a loyal and satisfied following. "We don't have returns", Leonardo says," We knew that taste and choice and reliable performance would carry the day, and we took care of that."

The Clearette product line includes different levels of nicotine and menthol, rechargeable products with replaceable cartomizers , and their new line of flavored Hookahs-essentially a flavored electronic cigarette that comes in Mango, or Green Apple, or other flavors. "The Hookah's are interesting", Leonardo says," Let's say the consumer is replacing her traditional tobacco habit with Clearette, and let's say she also likes strawberry. Now she can have both. Our Independent Distributors cannot get enough of them, immediately after the initial rollout we had to increase our Hookah production by 200 percent; we expect to do that again in the 4th quarter of this year."

Certainly big tobacco has taken notice. The Lorillard acquisition of electronic cigarette company Blu Electronic Cigarettes for $135 million cash in April 2012 was clearly an 'if you can't beat them buy them' acquisition. Phillip Morris recently explained to their shareholders that a year over year 6% decline in tobacco sales was the result of an increasingly large number of traditional smokers choosing e-cigs. Tobacco distributors and vendors who sell e-cigs overwhelmingly told Wells Fargo researchers in a recent survey that they believe electronic cigarettes are here to stay, and shelf space allotted to e-cigs is steadily increasing. At least 1 in 5 adult smokers have now tried electronic cigarettes, with increases particularly high among older people, Southerners, and current and former smokers. In 2010, only 4 in 10 adults was aware of e-cigs, less than a year later in 2011 that number had risen to 6 in 10. While the FDA and other regulatory groups are studying E-cigs, it is hard to imagine any position they would take would be anything but favorable. After all, 459,000 people die each year from smoking and secondary smoke; while Ecigs deliver nicotine and emulate the smoking experience without the tar or chemicals or smoke that is the cause of that.

It's very certain that electronic cigarettes are here to stay and that the growth and market penetration will continue at record levels. How the industry players will shake out remains to be seen, and there is no doubt there will be failures and consolidation as the market matures. However, it is clear that Clearette, with its quality products, savvy leadership team and growing ranks of satisfied happy customers and profitable Independent Distributors, will be right there at the top.