The Future of Vaping

It has been a worrying few weeks for believers in the benefits of technological progress. In mid-September, a number of scientific publications cast doubt on a high-profile attempt by biotech company Oxitec to control mosquito populations, suggesting the intervention may have actually strengthened the pests. A little later, the alternative meat craze took a blow when a spokesperson for the U.S. nonprofit Centre For Consumer Freedom said that the “public is being misled” about the emergent product’s nutritional value. In both cases, it should be said, the reports were disputed by the companies under fire. Nevertheless, a new atmosphere of cynicism and thwarted expectations has arisen in the world of utopian technology.

One industry that’s been almost continuously plagued by concerns like these is the vaping business. While the practice of inhaling vapors can be traced as far back as Ancient Egyptian times, the idea of a non-tobacco cigarette-alternative was initially developed in 1927 by inventor Joseph Robinson, yet the world would have to wait until the mid-2000s before the first recognizable e-cigarette was developed by Chinese pharmacist Hon Lik. In 2006, vaping devices began to be sold in Europe and North America to much controversy.

The foremost controversy, predictably enough, was related to the possible health benefits of the growing trend. Considering combustible tobacco smoking is one of the world’s leading preventable causes of death, the prospect of a healthier alternative was met with widespread jubilation. However, a number of reports questioned whether e-cigarettes were really better for smokers than their traditional counterparts.

In its early days, vaping was not dominated by a single product or brand, with everyone from individual inventors to legacy tobacco firms like Philip Morris International (NYSE: PM) getting in on the action. That all began to change with the arrival of California-based Juul Labs in 2015, whose signature line of e-cigarettes now accounts for about three-quarters of total market share. The company’s sleek, easy-to-hide devices have become particularly popular with the young, who have built a sub-culture around the product, including the coinage ‘Juuling’ in place of ‘vaping.’ Astonishingly, Juul products saw an 800% sales surge last year.

In recent weeks, however, we have seen the company fall into crisis mode along with the rest of the industry. On September 19, U.S. health officials published a shocking report that revealed 530 cases of a ‘mysterious lung illness’ among e-cigarette users, including a death toll in the low double-digits. A spokesperson for the Centers for Disease Control and Prevention also made a stark warning: “Until we know more, if you are concerned about specific health risks, CDC recommends you do not use e-cigarettes or vaping products.” Tobacco firm Altria Group (NYSE: MO) — which owns a 35% stake in Juul — saw its shares plummet on the news.

The company received another blow last week when Walmart (NYSE: WMT), the world’s largest retailer, announced that it would stop selling all e-cigarette products, citing “uncertainty” about the future of vaping. As a result of the decision, Juul CEO Kevin Burns stepped down.

It’s difficult to say what’s next for vaping companies like Juul. While the results of the health report appear pretty damning, e-cigarettes are still a fairly young technology with much room for change and innovation. At the same time, the twelve deaths confirmed by vaping pale in comparison to those who die from traditional smoking. The question of whether the industry will be able to communicate this effectively, and in turn regain the trust of consumers, is another matter altogether.

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