Today’s webinar will begin momentarily…...Today’s webinar will begin momentarily… •Make...

Today’s webinar will begin momentarily…

• Make sure your computer speakers are on and

adjusted to the volume of your choice.

• Close additional browser windows and online

applications.

• If you experience technical difficulties, please

close your browser and log back in.

Here are a few tips to improve your viewing experience

Kimberly KisselDirector of EducationKKissel@CDAweb.net

Ask the speaker questions throughout this webinar using the Q&A function -- in your GoToWebinar Control Panel, type in any questions you have for the speaker in the Questions box under the Questions tab.

Total U.S. Nicotine Trends

Don BurkeSenior Vice PresidentManagement Science Associates, Inc.

August 12, 2020

Notice

This presentation is based solely on an analysis conducted by Management Science Associates Inc. (MSAi) and does not necessarily reflect the opinion of any client. The definitions and analysis used in the presentation are based on general industry knowledge and typically represent the way a tobacco retailer may refer to the broad tobacco and nicotine delivery industry. Further, this presentation refers to tobacco and non-tobacco categories, that are often reported as cigarette only, cigars and pipe tobacco only, loose leaf only and electronic and other delivery systems only.

For purposes of this presentation, all of these categories are often referred to as one category using the phrase “nicotine delivery systems”, as that is a category grouping, that in MSAi’s experience, is used by most retail establishments. This presentation’s reference to “nicotine delivery systems” is in that context of the broadest retailer categorization of these various items.

Agenda

§ Total US Nicotine Trends

§ Trends by Product Form

§ Impact of Pandemic

§ Dollar Store Trade Analysis

§ Menthol Cigarettes

§ Flavored Cigar Trends

§ Change in Legal Purchase Age

§ Impact of Flavor and Vapor Bans

§ Impact of FDA Deeming Regulations

§ Distributor Analysis

Modern Oral Nicotine - Category Overview

§ The Modern Oral Nicotine category includes items marketed as tobacco-free nicotine products for oral consumption.

w These products are available in varying nicotine strengths and often come in pouch form, but can also include items in the form of toothpicks and lozenges.

w This growing category currently spans 7 different brand families.

Data Coverage

The following slides highlighting the Total US Nicotine Trends are based on just over 300,000 stores summarizing shipment-to-retail volume for these stores.

Total US Nicotine Trends

Nicotine Distribution by Trade Class for US

52 Weeks Ending Q2-2020

Total US Nicotine Trends

% Change 52 Weeks Ending Q2-2020 vs. 52 Weeks Ending Q2-2019

Included Categories

w Moistw Snusw Modern Oral Nicotine

w Vaporw Papers/Tubes/Wrapsw Roll Your Own

w Cigarettesw Large Cigarsw Little/Filtered Cigars

All Outlets

Convenience Gas

Tobacco Outlets

Drug StoresDollar Stores

Grocery Liquor Mass Merch

Consumer Units -0.8% 0.1% -0.8% -19.3% 3.3% -4.8% 1.7% -27.1%Servings -2.6% -1.3% -1.5% -21.7% 0.2% -5.8% -0.2% -28.3%Distribution -0.1% 2.7% -2.8% -27.4% 8.3% -6.0% -0.9% -11.3%

Total US Nicotine Share (Servings)

Share of Nicotine 52 Weeks Ending Q2-2020 vs. 52 Weeks Ending Q2-2019

Volume in Serving Units

Shr Q2-2019 Shr Q2-2020 Shr ChangeCigarettes 79.8% 78.9% -0.9Moist 7.1% 7.3% +0.2Vapor 5.6% 5.6% 0.0Papers/Tubes/Wraps 3.3% 3.4% +0.1Large Cigars 2.6% 2.8% +0.2Little/Filtered Cigars 1.2% 1.1% -0.1Modern Oral 0.1% 0.6% +0.5Snus 0.3% 0.3% 0.0Pipe Tobacco 0.0% 0.0% 0.0Roll Your Own 0.0% 0.0% 0.0

Overall Total US Nicotine Trends

+1 to 1.5%

Cigarettes

Overall Total US Cigarette Trends

14Source: Shipment to Wholesale & Wholesale Shipment to Retail data through 6/27//2020

-2.0% to-3.0%

All Outlets

Convenience Gas

Tobacco Outlets

Cigarettes -3.5% -2.4% -2.1% -18.2% 0.7% -5.7% -1.1% -29.3%Menthol -2.0% -0.1% -4.1% -17.2% -0.4% -6.1% -0.7% -32.3%Non-Menthol -4.3% -3.8% -1.1% -18.8% 1.2% -5.6% -1.4% -27.8%

Cigarettes -3.0% -1.6% -3.1% -6.8% 2.0% -6.0% -3.1% -9.3%Menthol -3.2% -2.1% -3.5% -7.8% 1.7% -6.7% -4.3% -9.2%Non-Menthol -2.9% -1.6% -3.3% -6.9% 1.8% -5.8% -3.0% -9.0%

Cigarettes -5.1% -6.3% -8.7% -7.5% -8.8% -7.3% -7.2% -10.4%Menthol -4.4% -5.1% -8.5% -6.7% -10.4% -6.7% -6.4% -11.4%Non-Menthol -5.2% -6.8% -8.7% -7.9% -7.4% -7.6% -7.5% -9.8%

Distribution

Volume

Overall Cigarettes down -2.1%

13 Weeks Ending Q2-2020 vs. YAGO

All Other Tobacco

Cigarettes vs. All Other Tobacco

Breakdown of All Other Tobacco

All Other Tobacco up 8.9%

Cigars

Overall Total US Cigar Trends

All Outlets

Convenience Gas

Tobacco Outlets

Large Cigars 4.9% 5.7% 5.0% -12.4% 12.6% -1.1% 8.4% -28.1%Little/Filtered Cigars -5.7% -7.1% -5.2% -5.7% 2.4% -7.7% -7.7% -64.1%

Large Cigars -1.1% -0.1% -3.0% -10.4% 11.2% -4.3% -0.3% -15.2%Little/Filtered Cigars -5.1% -5.0% -4.1% -6.5% 4.4% -9.1% -6.9% -53.6%

Large Cigars -3.0% -2.1% -3.8% -8.7% -4.0% -3.2% -2.2% -0.3%Little/Filtered Cigars -8.9% -9.9% -10.1% -7.6% -7.1% -7.9% -10.3% -62.0%

Volume

Distribution

Overall Total US Moist Trends

0% to 1%

Other Tobacco Products

Overall Total US OTP Trends

All Outlets

Convenience Gas

Tobacco Outlets

Moist -0.3% -0.2% 1.3% 54.4% 21.3% -1.8% 4.5% -15.1%Snus 0.5% -0.2% -1.4% +++ -64.9% 27.9% 4.2% 8.5%Modern Oral +++ +++ 190.9% +++ N/A +++ +++ +++Roll Your Own -12.3% -9.1% -1.6% -23.6% -47.9% -18.3% -3.9% -76.2%Pipe Tobacco -5.3% -1.2% -7.4% -23.8% 19.0% -4.8% 1.8% -124.8%Papers/Tubes/Wraps 9.3% 11.5% 8.6% -9.1% 21.8% 5.0% 13.6% 37.5%

Moist -0.6% -1.2% -2.7% 114.2% 7.4% -3.6% -2.7% -8.3%Snus 0.4% -0.8% -4.0% +++ -33.7% 15.7% 1.3% 20.5%Modern Oral +++ +++ 232.5% +++ N/A +++ 296.2% +++Roll Your Own -9.5% -7.5% -4.7% -27.2% -12.2% -18.7% -3.9% -55.2%Pipe Tobacco 0.0% 0.2% -1.1% -26.3% 20.4% -7.9% 1.6% -78.4%Papers/Tubes/Wraps 3.4% 3.4% 0.3% -22.4% 19.6% 2.1% 4.0% 36.6%

Moist -2.1% -1.9% -2.1% 0.9% -48.2% 0.0% -0.3% -5.1%Snus -5.4% -2.6% 6.3% 5.0% -38.5% -4.9% 3.3% -0.4%Modern Oral 36.6% 42.4% 32.3% 251.2% N/A 104.6% 64.2% 52.9%Roll Your Own -6.5% -2.3% -5.4% -7.3% 5.7% -6.5% -4.3% -32.7%Pipe Tobacco -6.7% -3.9% -6.1% -5.9% 143.5% -4.4% -5.0% -90.1%Papers/Tubes/Wraps 10.9% 11.5% 11.3% 3.9% 33.0% 8.8% 10.8% -52.5%

Volume

Distribution

Modern Oral (Tobacco Derived Products)

Modern Oral Nicotine Trend by Trade Channel

Modern Oral Nicotine Quarterly Volume Build% values are Q2-2020 vs. previous quarter

Modern Oral Nicotine Volume & Item Count

Modern Oral Nicotine Volume & Distribution

Modern Oral Nicotine Trend – Same StoresModern Oral Nicotine Quarterly Volume Build

Same Stores Only% values are change vs. previous quarter

Modern Oral Nicotine Share of Nicotine by State

Modern Oral Share of Nicotine – Q2 2020

Total US: 0.7%

0% - 0.38%

0.39% - 0.62%

0.63% - 1.11%

1.12% +

Oral and Tobacco-Free Delivery Change in Share of Nicotine

7.7%8.2% (+0.5)

= Modern Oral + Moist + Snus = Modern Oral + Vapor

6.2% (-0.3)

Modern Oral Nicotine Trend vs. Vapor - Servings

*Oral = Moist + Snus + Modern Oral

Overall Total US Vapor Trends (Servings)

All Outlets

Convenience Gas

Tobacco Outlets

Cartridges -1.3% 4.3% -13.9% -64.8% +++ -28.6% -7.5% -51.9%Disposables 27.6% 75.9% 141.5% -79.7% -107.1% -27.9% +++ -101.5%Kits -84.7% -83.8% -90.6% -93.0% -79.4% -80.4% -90.1% -77.1%e-Liquid -42.5% -59.6% -41.1% -82.2% -325.7% -78.1% -52.1% -58.8%

Cartridges -5.1% 4.9% -6.4% -70.6% +++ -42.4% 4.3% -60.6%Disposables -12.7% 11.2% -3.8% -71.2% -94.8% -50.6% 35.6% -80.6%Kits -61.5% -59.8% -65.6% -71.7% -70.5% -71.3% -67.2% -65.0%e-Liquid -53.6% -61.3% -36.9% -88.6% 188.9% -77.8% -51.4% -86.5%

Cartridges -4.5% -1.1% -2.3% -26.4% 6.7% -11.1% -4.2% -40.8%Disposables 133.6% 163.0% 173.7% -48.0% -9.9% 170.7% 260.7% -33.3%Kits -31.3% -27.2% -27.3% -52.4% -69.2% -38.2% -31.6% -63.2%e-Liquid -36.4% -50.1% -35.2% -71.4% 164.7% -57.9% -53.8% -92.1%

Distribution

Volume

Overview of Vapor Category

Total Vapor down -12.6% (includes Accessories)

Vapor Volume Trend

Total US Vapor Volume

flavor volume returns

Quarterly Volume (% Containing No Consumable Product)

95% of kit volume in 2Q20 was non-consumable/accessory

Accessories vs. Traditional Kits

Total Vapor Volume by Flavor TypeQ2-2020 vs. YAGO

Total Vapor down -12.3% (not including Accessories)

Impact of Pandemic

Cigarettes

Large Cigars

Papers/Tubes/Wraps

Little/Filtered Cigars

Modern Oral

Roll Your Own

Pipe Tobacco

YTD Volume v YAGO

Dollar Store Trade Channel Analysis

Dollar Store – Same Store Growth & Decline

% Change in Dollar Store Volume, Q2-2020 vs. YAGOSame Stores Only

Menthol Cigarettes Trends Analysis

Cigarette Volume by Flavor Type

Q2-2020 vs. YAGO

Total Cigarettes down -2.1%

Flavored Cigar Trends Analysis

Cigar Volume by Flavor Type and Sub-Category

Share of Cigar Sub-Category Volume by Flavor Type, Q2-2020

Flavor Large Cigars Little/Filtered CigarsTobacco 13.8% -6.9%Menthol -41.8% -10.3%Mint -45.3% -18.2%Flavored 13.1% -14.8%

Q2-2020 vs. YAGO

Impact of Changes in Legal Tobacco Purchasing Age

Age 21 Purchase Restriction State Overview

*Federal 21+ legal purchase age in effect as of 2020

12/28/2019

Age 21 Purchase Restriction State Overview – No IL or DC

*Federal 21+ legal purchase age in effect as of 2020

Estimated Potential Impact of 21+ to Major Categories

0% to -0.5%

-3% to -8%

0% to -0.5%

DC saw a $2 SET increase in October 2018IL saw a $1 SET increase in July 2018

12/28/2019

Impact of Flavor and Vapor Bans

Flavored Cartridge Ban

“Flavored” includes Mint but not Menthol.

Flavored Cartridge Ban – Convenience

Flavored Cartridge Ban – Tobacco Outlet

Flavored Cartridge Ban – All Other Trade

San Francisco Ban

• With enforcement beginning January 1, 2019, San Francisco banned all flavored tobacco, including menthol and mint.

-34%-27% -24%

12/28/2019

2016 Analysis on Impact of FDA Deeming Regulations

Overall Total Possible Impact

While approximately 30% of all nicotine items possibly will be impacted by the FDA Deeming Regulations that represents only about 8% of total nicotine volume

% Volume of Nicotine % of Items Possibly Impacted

% of Volume Possibly Impacted

Cigarettes 83% 14% 4%Cigars 4% 49% 49%Other Tobacco Products 10% 64% 5%Vapor 3% 100% 100%Total 100% 30% 8%

Note: Figures calculated using wholesaler shipment data managed by MSAi and may differ from manufacturer’s first ship date. These figures are estimates from 2016 of potential impacts only if the regulations are applied as currently written and there is no action by the courts or manufacturers.

Distributor Summary

§ In total 1,541 distributors of Cigarettes, Moist, Snus, Large Cigars, Little/Filtered Cigars, Roll Your Own, Papers/Tubes/Wraps, Vapor, Modern Oral, and Pipe Tobacco were used in the following analysis.

§ Distributors were ranked based on their industry volume. § High Volume – Represents the Top 33%§ Mid Volume – Represents the Middle 33%§ Low Volume – Represents the Bottom 33%

Avg. Distributor Volume & Avg. Store Volume are weekly averages

Distributor Count

Avg. Store Count

Avg. Dist. Volume

Avg. Store Volume

Avg. Item Count

Avg. Category

High Volume 39 2,591 2,721,927 1,480 1,371 9.7Mid Volume 83 1,179 1,228,331 1,780 1,272 9.3Low Volume 1,419 242 73,302 283 418 5.6

Industry Summary – 52 Weeks Ending Q2-2020 vs. YAGO

Vapor Sub-Category – High Volume Distributor

Item count is total items across all distributors

Vapor Sub-Category – Mid Volume Distributor

Vapor Sub-Category – Low Volume Distributor

Weeks of Supply by Distributor Size & CategoryAverage Weeks of Supply, Q2-2020

Weeks of supply calculated as average weekly inventory/average weekly shipments across Q2-2020. Distributors shipping <1,000 units for a category across the quarter were excluded from that category’s calculation

THANK YOU!

Today’s webinar will begin momentarily…...Today’s webinar will begin momentarily… •Make...

Documents

Transcript of Today’s webinar will begin momentarily…...Today’s webinar will begin momentarily… •Make...

The webinar will begin momentarily. Your line has …...2018/11/08 · Welcome to The webinar will begin momentarily. Your line has been muted. To hear the audio through your computer,

Today’s Webinar will begin at noon

We will begin momentarily at 2pm ET

Today’s Webinar will begin at - Cynosure Health

The WebEx will begin momentarily MUTE your telephones

Thank you for joining us! We will begin momentarily.

Today’s Webinar will begin at 11:30AM

We will begin momentarily at 2pm ET · PDF fileWe will begin momentarily at 2pm ET ... Orphan or SPA Overall 32.9% Ph 2 Ph 3 ... eDisney nature CHEMICAL BIOLOGY April 2014

1 The webinar will begin momentarily. The webinar will begin momentarily. To access the audio portion of this webinar please call: Conference Call #: 1-888-670-3525.

Thank you for joining us. We will begin momentarily. Updated info Teleconference: 877-738-6689 Conference code: 85892985.

The webinar will begin momentarily.

We will begin momentarily at 2pm ET · PDF fileWe will begin momentarily at 2pm ET Slides available now! ... ACS Sus. Chem. Eng. 2015, 3, 725. 32. 17 ... set up to foster

Your Meeting Will Begin Momentarily…

We will begin momentarily at 2pm ET · We will begin momentarily at 2pm ET ... “As a chemical patent attorney, I always enjoy ... Audience Survey Question

The event will begin momentarily.

We will begin momentarily · 2019-08-12 · •We will begin momentarily • This webinar is being recorded and will be available online next week • Audio will come through your

We will begin momentarily at 2pm ET - acs.org · We will begin momentarily at 2pm ET Slides available now! Recordings will be available to ACS members after one week. ... Known hemostatic

Today’s webinar will begin momentarily… · This presentation is based solely on an analysis conducted by Management Science Associates, Inc. (MSAi) and does not necessarily reflect

Welcome. We will begin momentarily. Call-in Information 609.318.5900 411 -573-764 Mike

Document Management 101 We will begin momentarily… Presented by: Jonathan Lai Presales Engineer.