NATO Show Hot Topics

Innovative products, never-ending regulatory threats at center of 2014 conference

Published in Tobacco E-News

By  Melissa Vonder Haar, Tobacco Editor

NEW YORK --The big news of the 2012 NATO Show was the blockbuster acquisition of blu eCigs by Lorillard, marking the first entrance of Big Tobacco into the blossoming electronic cigarette segment. Last year, it was the replacement of the first-ever head of the U.S. Food and Drug Administration's (FDA) Center for Tobacco Products (CTP) Lawrence Deyton by Mitch Zeller.

With less than one week until the 2014 NATO Show, it's not yet clear what "big stories" will emerge from this gathering of tobacco retailers and manufacturers in Las Vegas. But here are some of the biggest questions--which could lead to some of the biggest stories--we at CSP are looking forward to answering next week:

What will be the new "it" product?

Last year, personal vaporizers and e-liquids took the show floor by storm with enthusiasts swearing these products were not just a niche segment, but represented a huge step forward in quality. Since then, several more traditional electronic cigarette-makers (including CB Distributors, Vapor Corp. and Kretek) have released vaping products, Republic Tobacco recently got into the liquid business with a Johnson Creek Enterprises partnership and Wells Fargo analyst Bonnie Herzog has estimated that vaporizers are growing two times faster than the e-cig segment as a whole. What hot product will take us by surprise this year?

Are we due for a premium renaissance?

With deeming regulations allegedly on the horizon, many lawmakers--including Mitch Zeller himself--have acknowledged that high-end premium cigars need to be looked at differently. Freshness-ensuring foil packaging has made it easier than ever for retailers to get into the premium business, a business that could see a nice uptick if the rest of the cigar segment is eventually held to the same strict regulations as cigarettes. Will premium manufacturers like Commonwealth-Altadis and Scandinavian Tobacco use the showroom floor to highlight this opportunity?

How big a role will big tobacco play in e-cigs?

2014 marks the first year Lorillard, Reynolds and Altria will all have electronic cigarette products represented at the NATO Show and, if the speaker lineup is any indication, the Big Three intend to take a leadership role in this segment: Stephanie Cordisco, president of R.J. Reynolds Vapor, and Joe Murillo, president and general manager of Altria subsidy Nu Mark LLC., will join representatives from Logic and NJOY in the "Smoking Out Electronic Cigarettes" education session, while Lorillard president and CEO Murray S. Kessler will almost certainly hit on e-cigs in his "The Evolution of Tobacco" general session. Will these sessions provide a clue as to how Big Tobacco will change the segment?

Is it time to go on the offensive?

Last year, retailers had the opportunity to question CTP head Zeller (though largely received bureaucratic non-answers); this year's "Cutting Through The Rhetoric" regulatory panel instead features representatives from Lorillard, Reynolds, Altria and Republic Tobacco Co., promising to "analyze today's searing issues and translate their ramifications into plain language."

With so many (often unfair) regulatory attacks facing our industry, CSP has advocated for taking a unified offensive stance--will these leaders call for the same?