https://www.benzinga.com/news/17/01/8912943/how-much-of-big-tobaccos-sales-come-from-vape-products
The $49 billion purchase by British American Tobacco PLC (ADR) BTI 1.62% of the remaining stake available in Reynolds American, Inc. RAI 0.83% comes in a tobacco market that’s a lot less hazy than before, with leading manufacturers investing in alternatives to the traditional cigarette.
Tobacco industry sales as a whole may have contracted by 2.5 percent in 2016, Wells Fargo analyst Bonnie Herzog was quoted as saying last week in the Winston-Salem Journal — and Herzog is forecasting a 3.4 percent decline for 2017.
At the same time, Herzog forecasts $400 million in growth in the e-cig and vaporizer sectors in 2017.
Growing Smokeless Revenue
Reynolds has its own electronic cigarette brand, Vuse, and holds about one-third of the American e-cigarette market. The Winston-Salem Journal reported in 2015 that while Reynolds’ e-cigarette revenue isn’t separately reported, but rather included in an “all other” revenue category. That category had $386 million in sales in fiscal 2015, according to Reynolds’ annual report — a 39.9 percent leap from $263 million in 2014.
The e-cigarette venture remains a fraction of Reynolds’ traditional tobacco business, which saw $8.6 billion in net sales in 2015 (24 percent of the U.S. market), according to the Motley Fool. Reynolds acquired Lorillard LLC (previously traded NYSELO for $25 billion in 2015, taking over the Newport cigarette brand in the process.
Reynolds is developing products such as e-cigarettes and nicotine gum under the umbrella of RAI Innovations Co., CEO Susan M. Cameron wrote in a letter to shareholders last year.
Competitor Altria Group Inc (NYSE: MO), which markets the MarkTen e-cigarette, has “single-digit shares” in the e-cigarette sector, according to the Motley Fool.
British American’s equivalent e-cigarette device, Vype, is sold overseas