Booming electronic cigarette sales in the U.S. will more than double this year, hitting $1.7 billion, a top tobacco analyst predicts.
Analyst Bonnie Herzog of Wells Fargo Securities said "conservative data" already indicates that sales of e-cigarettes this year have already reached $700 million from traditional retail outlets like convenience stores. Throw in estimated online sales of $500 million to $625 million and total year-to-date sales are above $1 billion.
The pace will only pick up this fall. "We estimate that it will be $1.7 billion by the end of the year," Herzog said.
Although Herzog has been bullish on e-cigarettes, she said she was "surprised to some extent" by how fast sales have grown.
But, she noted, "everything we've been hearing" about e-cigs has suggested increased awareness and interest in the products—which electronically spark a nicotine-infused liquid so that users can inhale a smokeless vapor, giving the practice the name "vaping." E-cigs began being sold in earnest in the U.S. in 2007.
While a pack of traditional cigarettes can cost $15 in places like Manhattan, an equivalent amount of e-cigs costs about $1.50, manufacturers estimate.
"A lot of the awareness is the perceived lower health risks, and definitely the affordability," said Herzog, adding that the ability to use e-cigs in locations where traditional cigarettes are banned is another factor.
E-cig sales are still dwarfed by sales of traditional tobacco cigarettes, whose sales are still about $80 billion annually.