The explosion of the vaping industry is leading to significant changes as governments aim to regulate and restrict disposable vapes, particularly due to rising usage among non-smokers and young people. By 2023, 28 countries have banned e-cigarettes entirely, and nations such as the UK and France are considering further restrictions. This regulatory environment reflects the ongoing debate over vaping's impact and its perceived role as a smoking cessation tool.

The vaping market has seen rapid growth, underscored by shifts in consumer behavior and big tobacco's strategic pivot towards vapor products, given the declining popularity of traditional cigarettes. The number of adults using e-cigarettes has increased significantly in recent years, producing substantial profits for tobacco firms. Despite this growth, the market is marred by an expanding illegal sector that poses health risks due to unregulated products.

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Key Vocabularies and Common Phrases:

1. hysteria [hɪˈstɪriə] - (noun) - An uncontrollable outburst of emotion or fear, often characterized by irrationality, laughter, weeping, etc. - Synonyms: (frenzy, panic, agitation)

So what does the rise in vaping mean for the tobacco industry, and is the hysteria over their impacts well justified?

2. innovation [ˌɪnəˈveɪʃən] - (noun) - The introduction of new ideas, methods, or devices. - Synonyms: (invention, modernization, advancement)

And with interest comes innovation.

3. sophisticated [səˈfɪstɪˌkeɪtɪd] - (adjective) - Having or showing a high degree of complexity and refinement. - Synonyms: (complex, advanced, refined)

If you're not a vapor, you'll sort of think, that feels a little bit sophisticated.

4. illicit [ɪˈlɪsɪt] - (adjective) - Forbidden by law, rules, or custom. - Synonyms: (illegal, unlawful, prohibited)

The market is worth between three and 4 billion, you could estimate, and intelligence would suggest that the illicit market could be as much as two thirds of that

5. revenue [ˈrɛvəˌnju] - (noun) - Income generated from normal business operations. - Synonyms: (income, earnings, proceeds)

British American Tobacco saw revenue from its vapor products increase by 40.3% in 2023 compared to 2022.

6. prohibited [prəˈhɪbɪtɪd] - (adjective) - That has been forbidden; banned. - Synonyms: (forbidden, banned, proscribed)

This vitamin e acetate is banned in the UK.

7. consolidation [kənˌsɒlɪˈdeɪʃən] - (noun) - The action or process of making something stronger or more solid. - Synonyms: (unification, merger, reinforcement)

Because it leads to that consolidation.

8. toxicants [ˈtɒksɪkənts] - (noun) - Substances that are toxic or poisonous. - Synonyms: (poisons, contaminants, pollutants)

The issue is, if you're taking in those harmful chemicals and toxicants and you wouldn't have been exposed to those otherwise, you're then increasing your harm.

9. prevalence [ˈprɛvələns] - (noun) - The fact or condition of being prevalent; commonness. - Synonyms: (commonness, frequency, pervasiveness)

We are seeing increasing youth prevalence, but I think you need to put that one in context of other vices.

10. circumvent [ˌsɜːrkəmˈvɛnt] - (verb) - To find a way around an obstacle or to overcome a problem in a clever and perhaps dishonest way. - Synonyms: (bypass, evade, sidestep)

For example, are selling heat sticks made from nicotine infused substances, such as rooibos tea, which circumvent the EU ban of flavored heated tobacco.

Could the vaping industry go up in smoke?

Vaping is everywhere. Here on the busy streets of London, you often encounter a cloud of sweet smelling vapour or an abandoned e cigarette on the floor. But the industry is undergoing major change as governments look to restrict the sale of disposable vapes, amid concerns about the rise in vaping among young people and non smokers getting addicted. As of October 2023, 28 countries have banned the sale of any type of e cigarettes. In addition, the UK, Germany, France, Ireland and Belgium are among the countries looking into how they can ban disposable Orlando one use vapes as they continue to grow in popularity.

So what does the rise in vaping mean for the tobacco industry, and is the hysteria over their impacts well justified? The vaping industry has exploded over the last decade as health bodies have promoted it as an aid to quit smoking while cigarettes continue to fall out of fashion. In the UK, we have encouraged vaping among people who are struggling to stop smoking, and the use of e cigarettes among those people has gone up over the years. Things like nicotine patches, gums, lozenges and some drugs as well. You don't get that same hit as you would with smoking a cigarette, whereas with e cigarettes, you do feel that nicotine hits. So it's a lot more similar to the experience of smoking. And as well as that, you get the more social experience of going out and doing it with someone.

And with interest comes innovation. The first known design of a vape was actually created almost 100 years ago in New York. But the technology wasn't made until much later, in 1963. Two designs preceded the vapes we know today. The first looked like a cigarette with a glowing light at the end, and the second was a much larger metallic device. Many of today's designs are much sleeker and look much more like a piece of tech than an aid to stop smoking. So this is actually one of our present day devices. The battery itself is a little bit bigger. Yes, it's a metallic, nice finished design. You get a screen on the front here to be able to tell people how much battery life is left, because all these elements, if you're not a vapor, you'll sort of think, that feels a little bit sophisticated.

When you've made the transition across from cigarettes battery life, you don't want to be out and suddenly find that your e cigarette may fail on you. If you imagine when people have started on a single use product, it's a very simple device. You don't need to fill a product, just take a sticker off. Take a sticker off you go, and then hopefully you dispose of it responsibly, not into household waste.

Hoping to capitalize on this fast growing industry, big tobacco companies waded into the market. British American Tobacco was the first to move into the space when it acquired startup CN Creative in 2012. Imperial then acquired e cigarette brand Blue in 2014. Philip Morris bought UK e cigarette company Nicosigs the same year, and Japan Tobacco Incorporation bought elites in 2015. The old cigarette model, in terms of volume declines, was becoming much more pressured. There were increasing examples of countries outlining tobacco endgame policies within the next ten to 20 years, there was increasing esg overhang from investors and how the investment community viewed cigarettes. And we started to see these products appear on the market from non big tobacco and take share from cigarettes. So they were a competitive threat for the first time.

The number of adults using e cigarettes rose to 9.1% of the UK population in 2022, which is the highest ever, up from just 2.7% ten years ago. Meanwhile, the number of smokers has dropped year on year and fell to 12.9% of the population in 2022, the lowest since records began in 2011. And those figures are translating into big profits. British american tobacco saw revenue from its vapor products increase by 40.3% in 2023 compared to 2022. So it's unsurprising that big tobacco is pivoting towards vaping.

But the huge growth in the legal vape market is just one side of this story. In the last ten years, illegal vapes have generated big sums of cash. The market is worth between three and 4 billion, you could estimate, and intelligence would suggest that the illicit market could be as much as two thirds of that. So you've got a double issue. You've got unregulated product to a vast degree in the market, and actually then youths accessing the product, because those retailers prepare to stop those products and not doing the necessary age verification. So, a really big issue, and there are some key giveaways when it comes to spotting illegal products. The bigger puff device is certainly wider and certainly taller, normally quite square. So, actually, if you see that as a consumer in a shop, anything over 600, you won't find any reputable manufacturer using cartoon characters or flavor names that are associated with drinks or food, because there's already legislation that should give you those warning signs.

Not only are illegal vapes taking a big slice of the vaping industry, but they're also putting users in serious danger. We saw in the US a string of deaths and hospitalizations, which seemingly were linked to vaping, and that caused 60 deaths and hundreds of hospitalizations with this lung issue, which they eventually called evali. What we found out eventually was that this illness was being caused by people who were trying to vape thc. And to do that, they were adding something called vitamin e acetate. And this vitamin e acetate is banned in the UK.

In the UK, we've seen banned heavy metals in products that have been confiscated in schools. We've also heard reports of spice being added to vapes and children coming across these, so being exposed to drugs which they were not expecting to be exposing themselves to. So it's a very, very risky landscape at the moment for young people who are vaping. And as with most quick moving markets, regulations will always struggle to keep up with innovation.

Big tobacco firms, including british american tobacco, for example, are selling heat sticks made from nicotine infused substances, such as rooibos tea, which circumvent the EU ban of flavored heated tobacco. The influx of all these flavors and these, these cheap, disposable brands from China over the last few years, from a big tobacco perspective, it's actually a positive, because this will encourage regulators now to take action against these products. Is going to be a positive from a big tobacco perspective, because it leads to that consolidation. It also creates barriers to entry going forward, so you won't see more and more products coming in from China.

Meanwhile, smokers are still actively being encouraged to take up vaping to quit cigarette. The British National Health Service, for example, says it poses a small fraction of the risk of smoking, which causes around seven out of every ten cases, lung cancer. But health professionals also highlight that vaping is not completely risk free and the longer term risks are not yet known. We're fairly certain that vaping will be less harmful you in the long run than smoking will be, because it's got fewer harmful chemicals and toxicants in there. The issue is, if you're taking in those harmful chemicals and toxicants and you wouldn't have been exposed to those otherwise, you're then increasing your harm.

So we have cigarettes at the top is the most risky thing you can do, then there's e cigarettes underneath that. But the least or least harmful thing, or the safest thing you can do is neither. Yes, we are seeing increasing youth prevalence, but I think you need to put that one in context of other vices or other categories, like cannabis and alcohol. At the same time, we're seeing increased youth usage. Youth cigarette smoking is lower than it's ever been, both in the US and the UK, which would suggest that if these use were nothing using vape, which is much safer than cigarettes they would otherwise be smoking.

In the UK, e cigarette usage is highest among people aged between 16 and 24, while one in nine children had experimented with vaping in March 2023, which is up from one in 13 in the same month in 2022. So, as a fast growing industry, both legally and in the black market, it looks like vaping is here to stay. I think we've got to around the level at which it will be at its most popular. But how long it takes for it to decrease in popularity again is. Yeah, yet to be seen. And it's difficult to really think about how long a fad can last until they become less trendy. It's going to be a really, really uphill drive for us to try and reduce the youth use without having a reduce in the trend. If you look at the growth curve over the last two years, there has been that demonstrable increase. That is great, because in many ways, people weren't sure what it was about. What are these products? Are they the solution or the issue? Well, actually, hopefully it's been proven now.

Global, Business, Health, Tobacco Industry, Smoking Cessation, Youth Vaping, Cnbc International