Domestic tobacco cigarette shipments are declining, but e-cig sales are on the rise. While several major tobacco companies have acquired or developed their own e-cig products, the biggest by far belong to Lorillard (NYSE:LO). Lorillard acquired blu e-cigs in 2012, and now controls around 40% of the e-cig market. This will greatly benefit Lorillard in the years ahead as e-cigs become more popular.
Consumer Goods Editor Mark Reeth thinks that the popularity of e-cigs will skyrocket once consumers realize two of the major benefits of e-cigs: cost savings and health benefits. A high initial price point for blu e-cigs overshadows the savings smokers will experience down the line, while FDA regulations prevent Lorillard from selling blu e-cigs as a way to stop smoking. If and when Lorillard gets past these obstacles, the company is poised for huge profits.
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