The Federal Trade Commission’s First Report on E-Cigarette Sales and Advertising Reveals Disturbing Trends Affecting the Health of Young Americans

The Federal Trade Commission’s first-ever report on e-cigarette products paints a disturbing picture of surging e-cigarette sales and advertising that are likely to damage the health of America’s youth.

The report, which is based on industry data provided for the years 2015 to 2018, shows that total e-cigarette sales, including both disposable units and those using changeable cartridges, increased more than six-fold from $304.2 million to $2.06 billion in those three years alone. The sales of fruit and other flavored e-cigarette cartridges preferred by youth increased seven-fold over that time, and nicotine concentrations in disposable e-cigarette products also increased.

“The Commission’s inaugural e-cigarette report paints a disturbing picture, especially with e-cigarettes driving an unprecedented increase in youth use of tobacco products,” said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection. “The data show that this increase coincided with dramatic spikes in the market share of flavored products, higher concentrations of nicotine, and an industry attempt to evade a ban on free sampling.”

Background

In October 2019, the Commission issued identical orders under Section 6(b) of the FTC Act to six of the largest domestic e-cigarette manufacturers:

• Fontem US, Inc.;
• JUUL Labs, Inc.
• Logic Technology Development LLC;
• NJOY, LLC;
• Nu Mark LLC; and
• R.J. Reynolds Vapor Company.

While the FTC has collected information on traditional cigarette and smokeless tobacco sales and advertising expenditures for many years, this was the first time it sought information related to e-cigarettes. The orders asked about e-cigarette sales and advertising and promotional activities for 2015 to 2018. The report issued today presents an aggregated and anonymized summary of the information the six companies provided to the Commission.

Key Findings

Total Sales. The data collected show a dramatic increase in e-cigarette sales in general between 2015 and 2018 (from $304.2 million to $2.06 billion, respectively), as well as a similarly dramatic increase in the sales of cartridge e-cigarette systems such as Juul’s. The companies sold $260 million worth of such cartridge systems in 2015, with sales growing to $1.969 billion in just three years.

Flavored E-Cigarette Sales. In addition, the FTC found that there was a large shift in sales from tobacco-flavored e-cigarette products to fruit, candy, and dessert flavors. For example, tobacco-flavored e-cigarette cartridges sales dropped from 47.2% of those sold or given away in 2015 to 21% in 2018, while the sale of “other” flavored cartridges tripled in that time, increasing from 13.8% in 2015 to 42.1% in 2018.

Of those other flavored cartridges, fruit-flavored cartridges were the most popular, with sales increasing 600% from 4.7% of all cartridges sold in 2015 to 29.7% in 2018. Similar increases were seen in the sale of candy and dessert-flavored cartridges, as well as the sale of disposable e-cigarettes with these flavors.

The report concludes that “the dramatic increase in flavored products raises serious concerns that such products might have maintained or increased youth use of e-cigarette products.” It notes that a 2018 survey of high school students nationwide found that more than two-thirds of e-cigarette users used flavored products and that research shows that young people identify flavors as a primary reason they use e-cigarettes.

This was a significant increase from 2016, when a national survey of high school and middle school students found that just 31% said that the availability of “flavors such as mint, candy, fruit, or chocolate” was the primary reason they used e-cigarettes. In addition, 81% of adolescents said they used flavors the first time they tried e-cigarettes.

Increasing Nicotine Concentration. The report also reveals a large increase in the concentration of nicotine in disposable e-cigarettes sold between 2015 and 2018. In 2015, disposable products on average contained 25 mg of nicotine per ml of e-liquid. This concentration increased nearly 60% to 39.5 mg/ml in 2018, increasing their addictiveness. Cartridge-based e-cigarettes contained even higher nicotine concentrations, with the most popular products having concentrations between 51 and 61 mg/ml, while the sale of nicotine-free cartridges was negligible.

The report stated that, “Increased use of e-cigarette products with high nicotine concentrations raises serious public health and safety concerns for users . . . including youth and young adults, who are uniquely at risk for long-term, long-lasting effects, including nicotine addiction, from exposing their developing brains to nicotine.”

Advertising and Promotion. Finally, the report provides detailed information on advertising and promotional expenditures by domestic e-cigarettes manufacturers between 2015 and 2018. The Commission found that spending on advertising and promotion more than tripled in three years, from $197.8 million in 2015 to $643.6 million in 2018. The Commission stated that “the increased advertising and promotion raise public health concerns,” as public health authorities have concluded that e-cigarette advertising exposure is one of several factors that has contributed to the recent surge in youth e-cigarette use.

The report finds that spending on free or deeply discounted e-cigarette products more than doubled between 2015 and 2018, with some companies evading the FDA’s 2016 ban on free e-cigarette samples by offering products for $1 or a similar amount.

The report also states that price discounts paid to retailers or wholesalers to reduce the price of e-cigarettes to consumers increased 14-fold between 2015 and 2018, and spending on celebrity endorsers, social media influencers, brand ambassadors, and others to promote e-cigarettes products increased even more – nearly 15-fold during those three years.

The Commission vote approving issuance of the FTC’s E-Cigarette Report was 4-0.