Electronic Cigarette News
Electronic Cigarette News

Altria Could Potentially Add $5 Billion In Value From E-Cigs

trefisA recent article on Trefis, estimated that Altria could potentially add $5 billion in value from e-cigs.

Since the existence of electronic cigarettes, the tobacco market has been slowly, but surely feeling its impact. Though the e-cig industry is still very young and hasn’t quite matured, it has caused companies like Altria, a giant in the tobacco industry, to see a decline in shipment volume. Altria specifically seen a 6% decline y-o-y for the first half of the year. This has led to Altria and companies like it to enter the niche e-cigarette category.

Altria announced its entry earlier this year through one of its subsidiaries, NuMark, introducing the MarkTen electronic cigarette.

We believe this is a positive move and reflects the management’s focus on sustainable long-term value creation for its shareholders amid a rapidly declining market for cigarettes. – Trefis Team

Trefis says they believe Altria could potentially add $5 billion in value by selling e-cigarettes.

Most of the value is expected to come from the fast growing market for e-cigarettes, and the company’s expertise in building brands and handling tobacco litigations.

They expect the e-cigarette category to grow quickly, like many of us believe. In fact, we’ve already witnessed the e-cigarette industry to rise from being our little baby with so much potential, to an overgrown toddler that can be expected to eventually become a giant.

We expect the volume of traditional cigarettes sold in the U.S. to decline at ~4% CAGR in the long run on growing alternatives and rising excise taxes. To approximate the size of the e-cigarette market, we estimate that 75% of the decline in traditional cigarette volume gets converted into e-cigarette consumption in the long run and that one e-cigarette is equivalent to 15 traditional ones.

That conversion rate is why electronic cigarettes were invented. Traditional smoking is a thing of the past time, and the future for this e-cigarette industry looks promising, especially with estimates such as this.

To read the full article, visit: http://www.trefis.com/stock/mo/articles/203656/altria-could-add-5-billion-in-value-by-selling-e-cigarettes/2013-08-30

About the author

Blake Brown

Blake is the owner and creator of the Guide To Vaping blog. He has expressed his passion for the vaping industry through his deeply rooted and highly informative content. Being a writer and content provider for the vaping industry for year's, Blake has also gained experience from working with multiple blogs and well respected companies.

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