The Value of Self-Regulating E-Cigs

Published in Tobacco E-News

NJOY exec: Responsible practices now will ensure long-term survival

By  Melissa Vonder Haar, Tobacco Editor

SCOTTSDALE, Ariz.-- Last Friday, NJOY announced that it had officially joined the national retailer ID We Card program--a pioneering effort by the Scottsdale, Ariz.-based electronic cigarette company. But according to NJOY higher ups, the move was just the latest from a company who takes pride in its self-mandated responsible business practices.

"We're very excited about it," executive vice president Roy Anise told Tobacco E-News. "It's a clear demonstration of our intention for our products to be used by adults. We're using existing retail structure and practices to ensure that's the case. To be the first independent e-cig company to be in that program, we think it feels very right."

Although only a handful of states have mandated e-cigs only be sold to consumers over 18, many believe it's only a matter of time before the U.S. Food & Drug Administration (FDA) sets a national age-restriction on the growing segment. As such, NJOY sees value in ensuring its products stay out of the hands of minors now--and even more value in leading the industry in such efforts.

"Our mission [is to be] the most responsible e-cig company," said Anise. "Our strategy has been to police where the product is going to be, rather than where it is now."

It's one of the reasons that, unlike many e-cig companies, NJOY opts to stay out of the broader flavor game and produces only tobacco and menthol flavored products. While there is undoubtedly an adult market for flavored products, it's not a market NJOY believes will exist once the FDA asserts guidance for e-cigs.

"We believe that e-cigs--or any tobacco products--that are chocolate or strawberry, a reasonable person could conclude it might appeal to an underage consumer," Anise said. "Because of that, we have no interest; we don't want the risk of attracting the underage buyer. We don't think it's right for us and we don't think it's right for the category."

Another way NJOY promotes responsible consumption of its products is a focus on retail sales, as opposed to internet sales. Although Anise admits "some of our business is on the internet," he said NJOY largely promotes in-store sales, and the internet is "not our primary area of sales."

He added, "When products are sold person-to-person, there's the human element to further verify the consumer's age--it's much easier for minors to order products online."

Such efforts are part of NJOY's long-term business model. While taking advantage of the fact that e-cigs are not yet regulated and can be sold in any flavor and online might be profitable in the present, Anise does not believe it's sustainable in the long run.

"There are other companies who are in the category for as long as they can make some money on it--when the regulations cost too much, they'll go do something else," he said. "Our view is to be in the business for the long term. We recognize that when you do business for the long term, there are a lot of factors that must be taken into consideration, which has guided our decisions."