Republic Tobacco Enters Vaping Category

Invests in juice supplier Johnson Creek Enterprises

Published in CSP Daily News

GLENVIEW, Ill. & HARTLAND, Wis. -- Looking to leverage the new consumer vaping trend that some industry observers believe could be even bigger than the relatively new category of electronic cigarettes itself, Republic Tobacco has taken an equity interest in Johnson Creek Enterprises of Hartland, Wis., a juice supplier for vaping products in the United States.

Glenview, Ill.-based Republic Tobacco is the nation's largest distributor of roll-your-own and make-your-own tobacco products and accessories that include such brands as Job, Top, Gambler, Drum, Largo and Tube Cut.

Since being founded by Christian Berkey in 2008, Johnson Creek Enterprises is the world's leading smoke juice production facility.

Johnson Creek has been on the forefront of ISO9001 smoke juice production by manufacturing e-liquid made from U.S. ingredients and bottled in America, which the company said is a unique combination in the growing e-liquid category.

The company has been widely recognized as the supplier of e-liquid for Greensboro, N.C.-based Lorillard Inc.'s blu eCigs, a leading U.S. electronic cigarette.

"We have been studying the 'e' category for about four years, and have considered entering it at different periods throughout that time," Steve Sandman, president of Republic Tobacco told CSP Daily News. "However, we have never been entirely comfortable with the landscape and the entry points until now."

Johnson Creek "impressed us right from the start," he said. "The company has a serious manufacturing operation right here in the United States, with highly dedicated people that were both smart and innovative. Their production facility was not only spotless, but they had taken great care to be compliant with any and every regulation possible. Once it became apparent that smoke juice was becoming a consumer trend as opposed to traditional e-cigarettes, we couldn't see a better fit for Republic Tobacco."

Making a significant investment into a company that already knows vapor helped shorten the learning curve, he said, even for an evolving category. "The fact that Johnson Creek brought incredible know-how and expertise to our group is something extra special as they are great people, real team players and they really know their stuff. We knew it was a good fit from the moment we met them."

For retailers, Sandman said that "because of the diversity that exists within cigarettes, OTP and 'e' products, and then within each of those subsets," it is becoming harder to integrate all of the various tobacco and nicotine products into a single set. "Republic has always provided an exceptional portfolio of merchandising vehicles for retailers, and we will have a wide array of choices to merchandise the new additions to our family of products," he said.

Johnson Creek is "the perfect fit for our company, both in terms of superior reputation and product quality," said Sandman in announcing the deal. "Consumers in the 'e' category have shown they prefer to make their own 'e' product, by selecting their favorite delivery device and their preferred liquid. We believe that this is a new make-your-own consumer, and now Republic will be able to offer the highest quality products on the market."

He added, "Both retailers and wholesalers have been waiting for a reputable company to supply this growing category, and they will be very pleased that Republic is stepping into the forefront of the category as it develops with such an outstanding company as Johnson Creek."