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Growth in sales of e-cigarettes is faltering on both sides of the Atlantic, challenging forecasts that vaping devices will become the dominant alternative to smoking and provide a sustainable lifeline for big tobacco.
British American Tobacco, the FTSE 100 group behind Vuse e-cigarettes, said last week it expected sales of its vaping devices to fall by a mid-teens percentage globally in the first half of the year.
In the US, the world’s largest vaping market, year-on-year sales of regulated devices have fallen almost every month during the past two years, according to data provider Nielsen. Meanwhile in the UK, the second-largest market, vaping prevalence has levelled off.
“When vaping first appeared in the early 2010s, many projected it would have replaced smoking by now. That view has been wrong,” said Rae Maile, an analyst at Panmure Liberum.
The slowdown comes after more than a decade of strong growth, which had accelerated between 2021 and 2024 as disposable e-cigarettes proliferated in the US and the UK, where they have recently been banned.
Waning sales jeopardises billions of pounds of investment by the giants of the tobacco industry, who are searching for new growth avenues to offset a long-term decline in cigarette sales. Tobacco use has fallen by more than half since 2000, according to the World Health Organization.
Marlboro maker Philip Morris International, which has invested more than $14bn developing cigarette alternatives, is aiming to make two-thirds of its revenues from “smoke-free” products by 2030. BAT wants to become a “predominantly smokeless” business by 2035.
Euromonitor analyst Shane MacGuill said the decline in e-cigarette sales was making it harder for tobacco companies to reach their goals and “forcing them to rethink their strategies.”
The rise of vaping has been controversial. Manufacturers have been accused of fuelling a nicotine dependency among children by producing flavours such as candyfloss and green gummy bear.
However, there are signs this is subsiding. In September, the US Food and Drug Administration found vaping among school age children had fallen to its lowest level in a decade. According to its survey, 1.6mn respondents said they were using an e-cigarette last year, down from 2.1mn in 2023.
The FDA’s lengthy and expensive approval process means only 34 vaping devices have been approved for sale in the US.
Citi analyst Simon Hales said there had been “a massive shift” in spending from regulated to unregulated e-cigarettes. US convenience stores are selling unauthorised disposable vapes made by mostly Chinese manufacturers, including Elf Bar and Lost Mary.
Kingsley Wheaton, BAT’s chief corporate officer, said sales of the company’s e-cigarettes were falling because consumers were buying unregulated products, which BAT estimates make up roughly $8bn of the $10bn US vaping market. Wheaton claimed that enhanced regulation would result in sales “flowing back” into the legitimate market.
PMI chief executive Jacek Olczak told the Financial Times that to think “everyone will go to vaping [in order to quit smoking] is wrong”. Olczak said consumers were instead turning to nicotine pouches, a flavoured sachet held against the gum that releases nicotine, and that sales of PMI’s heated tobacco device IQOS were resilient.
Concerns over the environmental impact of disposable vapes — a significant contributor to recent e-cigarette growth — has led to the products being banned in the UK.
Sales of all vaping devices have suffered in the months leading up to the ban, which came into effect this month, according to a University College London study.
“[Vaping use] was on quite a sharp upward trajectory,” said UCL professor Sarah Jackson, but after the government’s announcement the trend has “levelled off”.
Data visualisation by Alan Smith
