How Juul Became a Victim of Its Own Huge Success

(Bloomberg) -- The developers of the Juul e-cigarette wanted to make the experience of getting a stimulating hit of nicotine dramatically better than sucking on a stinky, smoking stick of burning tobacco. Their success made Juul the top-selling e-cigarette in the U.S. in two years. The device was created to help adult smokers quit, according to the company that makes it. But it achieved success in part by attracting a huge following among kids younger than 18, who aren’t legally allowed to purchase such products. Concerns about the hazards of vaping for the young provoked U.S. officials to warn of the possibility of tighter regulations on e-cigarettes. Juul moved preemptively Nov. 13, announcing it had stop selling fruit-flavored products to stores.

1. What’s a Juul?

It’s a so-called vaping device containing a battery that heats nicotine liquid. The user inhales nicotine, an addictive alkaloid present in tobacco, and exhales aerosol. There’s no burning tobacco and thus no smoke or tar. The Juul has a sleek design. It’s made of brushed aluminum and resembles a USB flash drive. Because it’s small, the underage vaper can palm it, discreetly take a hit when a teacher or parent isn’t looking, and breathe the aerosol into a sleeve or collar. And, like many other vaping devices, its refills have come in tasty flavors such as mango and mint.

2. How popular is the Juul?

Sales of the devices in the U.S. rose more than 600 percent in a year to 16.2 million in 2017, according to the Centers for Disease Control and Prevention. By the end of 2017, Juul accounted for almost 1 in 3 e-cigarettes sales, CDC found. Juul’s dollar share of such sales soared to 53 percent from 16 percent at the end of 2017, according to data from market researcher IRI. Reynolds American Inc.’s Vuse is next biggest with just 10 percent.

How Juul Became a Victim of Its Own Huge Success

3. How common is teen vaping?

Scott Gottlieb, commissioner of the Food and Drug Administration, has described it as an epidemic. U.S. officials say vaping among high-schoolers rose 75 percent from 2017 to 2018, according to preliminary data. That meant that about 20 percent of those students were indulging. Among middle-schoolers, the number who reported vaping rose nearly 50 percent.

4. What are the concerns?

Gottlieb put it this way: “The technology that might help adults end one addiction cannot pull a generation of kids into a new one.” While the evidence so far suggests that vaping is a safer choice than lighting up, there isn’t enough long-term data to make a definitive conclusion. It’s plausible, although not proven, that e-cigarette aerosols can damage tissue and cause disease, including cancer. The effects on humans of nicotine are not well-studied, although adolescents appear to be particularly vulnerable to it, with some evidence suggesting it can harm brain development. A report by the U.S. National Academies of Sciences said there was substantial evidence that young vapers are more likely than nonvapers to try regular cigarettes.

5. What has the FDA done?

In what it called the largest coordinated enforcement effort in its history, the agency over the summer issued more than 1,300 warning letters and fines to retailers that illegally sold e-cigarettes to minors. In September, FDA inspectors visited Juul Labs Inc.’s San Francisco headquarters and took away more than 1,000 pages of documents on sales and marketing. It gave e-cig makers until early November to put forward plans to “immediately and substantially reverse” the rise in youth vaping or face tougher rules. This was a change of tone for the FDA, which a year earlier had pushed back by four years until 2022 regulation of vaping devices beyond a current ban on sales to minors and a requirement for nicotine-addiction warnings. Gottlieb said then that he wanted to ensure an industry with the potential to reduce smoking rates wasn’t stymied by regulation.

6. What might the FDA do?

Officials have focused on the possibility of prohibiting or limiting the use in e-cigarettes of flavorings, which -- except for menthol, an exception the FDA is reconsidering -- are forbidden in regular cigarettes. The agency is expected to restrict sales of fruit- and dessert-flavored pods to vape shops and online retailers with age-verification systems.

7. What has Juul Labs done?

It said that for now it has stopped selling to stores its nicotine pods in flavors mango, fruit, creme and cucumber and will provide only tobacco, menthol and mint flavors. The measure is expected to cut Juul’s in-store retail sales by 45 percent, according to a person familiar with the company’s projections. Juul will continue to sell the fruity pods through its website, but the company said it was adding age-verification systems to ensure customers are at least 18. It said it would resume selling flavored products to retail outlets that use age-verification technology.

8. How have other e-cigarette makers responded?

Altria Group Inc., Reynolds and Juul Labs have all said they would support legislation to raise the legal age for tobacco buyers to 21. Altria earlier announced that it was temporarily pulling its e-cigarettes MarkTen Elite and Apex by MarkTen from the market until the FDA gives the green light. It said it will also stop selling Nu Mark cigarette alternatives in flavors other than tobacco, menthol and mint until granted the agency’s go-ahead.

The Reference Shelf

  • The review of vaping studies by the U.S. National Academies of Sciences, Engineering and Medicine and another commissioned by Public Health England.
  • The FDA’s Center for Tobacco Products’ website gives its position on e-cigarettes.
  • The Public Health Law Center’s interactive map shows e-cigarette regulation in each U.S. state.
  • A Bloomberg editorial on the dangers of vaping.

©2018 Bloomberg L.P.