The trip outside for a cigarette with a mate is rarer these days, with puffing on a vape becoming more common in the UK.
The younger health conscious population want businesses to help them make as new firms look for more funding to expand their vaping business.
How big is the vaping market?
2.9 million people are now using e-cigarettes in the UK- the sector has grown by 800 per cent since 2010 to make the market worth £1 billion, according to an EY report. The products are not as highly taxed or regulated as traditional tobacco, therefore there are less barriers for new entrants.
So it makes sense to see Manchester firm Supreme becoming the first vaping company to announce that it would list its shares on AIM, the London Stock Exchange’s junior market. The company creates 3 million bottles of vaping liquid every month and vaping hardware products as well as batteries and lighting goods and is expected to be worth £150 million when it floats, according to the Manchester Evening News. Sporting distribution agreements with Duracell, Panasonic, Energizer and Eveready, it supplied 690,000 vape kits in 2017. Revenue hit £71 million in the year to March 2017, up from turnover of £59 million the year before.
Growing market offers opportunities
A big part of the e-cigarette success story has been that the product is disruptive but is also a continuous innovation; a product that doesn’t force consumers to radically change their behaviour. Most vapers are ex-smokers, according to ONS data. However, some hardened smokers argue that swapping cigarettes for vaping is indeed a big change for them!
It remains to be seen whether the e-cigarette boom can last, as big tobacco firms are pushing for increased regulation of e-cigarette or vaping products. A recent study by researchers from New York University School of Medicine suggested that vaping products may not be entirely risk-free.
There are signs that the e-cigarette market may be slowing but Supreme’s confidence to list shares on AIM shows that there will be plenty more opportunities for e-cigarette companies to raise public or private funds.
Three e-cigarette firms to do well
Vape Emporium– The independent firm sells vaping kits and runs two shops across London. It has grown its revenue from £550,000 in 2015 to around £2 million in 2018.
Vape Shoreditch– The subscription service raised half a million in funding on Seedrs and boasts thousands of customers
Vype– The British American Tobacco (BAT) backed company bought independent firm CN Creative Limited in 2012 and launched their own brand Vype. The firms success has helped BAT outperform the stock market.