World average investors, who turn over billions, but not tens of billions of dollars, find themselves in a delicate situation. The most successful manufacturer of vapes and electronic cigarettes, Juul, launches a large-scale campaign to promote its goods and invests $ 1.2 billion at the start. Reputation risks are colossal, but multiple profits are almost guaranteed. And how to proceed?
Sales of classic cigarettes, paper + tobacco, fell 4% over the past year, according to Bloomberg. Tobacco stocks plummet - Philip Morris by 23%, British American Tobacco by 24%, and Japan Tobacco by 15%. Social advertising campaigns and an increase in excise taxes reduce interest in smoking, but at the same time, vaping at the peak of popularity is opposed to cigarettes. During the same period, sales of the Juul brand grew by 700%, one in ten students puffed on e-cigarettes, and a phenomenon called "juuling" is being discussed on social media.
The Juul brand has focused on youth and positions its cigarettes as a fashionable and safe accessory for an advanced person. They have a smart design, a wide range of flavors, are easy to use and contain 59 mg of nicotine per serving, which is more than enough for addiction. Juul has already occupied most of the US e-cigarette market and is now preparing to expand to other countries. The official goal of the large-scale PR campaign is the “new generation”. That is, young people, including adolescents.
The spent one billion dollars is just the beginning, the entire volume of investments is estimated at $ 15 billion. With the current estimate of the world market for electronic cigarettes at $ 5.5 billion, the payback will not be long in coming. A tidbit for independent investors, but only the brand's activities are constantly shaken by scandals. The reasons are always the same, the authorities do not like the availability of this product for minors, and those who are imprudent to cooperate with the brand are under attack.