Shift in nicotine use is putting pressure on cigarette segment

Shifts in consumers' tobacco use is causing a stir on the back counter, according to a recent survey by Wells Fargo Securities LLC.

The firm's first quarter Tobacco Talk survey found that the adult tobacco consumer in the remains stable driven by effective loyalty programs and promotions, low unemployment and higher disposable income.

In addition, cigarette volume declines decelerated in the first quarter, according to the survey of U.S.-based retailers representing roughly 60,000 convenience stores.

However, retailers' outlook for cigarette volume in 2019 "has decelerated significantly" as dual usage and smoker conversion to e-vapor products like Juul has accelerated, explained Bonnie Herzog, managing director of tobacco, beverage and convenience store research at Wells Fargo Securities.

"It's increasingly clear to us that the tobacco industry is being disrupted as smoker conversion to e-vapour accelerates, negatively impacting cigarette volume as a result," she said.

Originally published at Convenience Store News.