The Lorillard Acquisition Of Blu Cigs
In 2012, tobacco company Lorillard purchased Blu Cigs. Blu Cigs has been one of the top-selling electronic cigarette brands in the United States. Lorillard purchased the company for $135 million to reclaim some of the success they lost as cigarette use declined and e cigs took some of their audience. More than 10,000 retail stores (garages, corners stores, grocers) sell Blu Cigs which comes in menthol and tobacco flavors but also Peach Schnapps, Cherry, and others.
The Latest News for Lorillard
Recently, Reynolds made a bid to purchase Lorillard. If the purchase goes through, Reynolds will become a mega-player in the tobacco market. They will dominate the industry and the place of Big Tobacco on the stock market. If the sale goes through, what will this mean for Blu Cigs?
Reynolds Plans for Blu Cigs
Reynolds already makes a line of e cigs: Vuse. Up until this summer, Vuse had been released to a limited market in Colorado. The brand met with a lukewarm reception while Blu Cigs has been one of the industry’s most popular products. But Blu Cigs has also met with criticism in recent months due to the numerous instances of DOA batteries that online customers receive in the mail.
Rather than try to fix the battery problem, Reynolds has decided that if their bid is successful, they will sell Blu Cigs and put all of their e cig-related efforts into Vuse.
What Will This Mean for Blu Cigs?
First of all, the deal has not been signed. Certain criteria must first be met, and that could take several months.
While they remain in limbo waiting for a buyer, Blu Cigs will probably lack an injection of interest or finances and will operate without the full backing of Reynolds. When they are sold, their direction and future will depend upon the new buyer.
Where Could Blu Cigs Go from Here?
Right now, the best thing a new buyer could do for Blu Cigs would be to consolidate; fix existing problems and take stock of what is working before launching anything new or making wholesale changes. The brand is due for some significant innovation: their Premium 100 line was released many months ago; long enough for several other brands to have caught up with or outdistanced Blu Cigs.
Among their biggest rivals are Vaporfi, V2 Cig, Green and South Beach Smoke. Vaporfi is floated on the stock market. V2 Cig has launched a 3-in-1 vaporizer. Altria bought Green Smoke earlier this year and the company has since lowered prices to become more competitive. South Beach has launched the Air, an eGo style device, with the whole line of Vaporfi e liquids available with it.
In contrast, Blu Cigs continues to make a realistically-sized cigalike in two colors with 7 flavors and a portable charging kit with social features. Since e cigs are common in bars and clubs and could be banned for indoor use in the near future, the social feature of their PCC is virtually redundant.
Will Blu Cigs Survive?
E cigs have grown in popularity and become a strong investment prospect. Sales of e cigs continue to double and even triple annually. Where will Blu Cigs fit into this growth? The answer will have to wait until the ink dries on the Lorillard acquisition.