What Happens Now?

Vaper’s Vortex

June 25, 2015

“The only problem with burying your head in the sand? Your butt is still up in the air.”


In my previous post we looked at a summary of the results of lab testing of 252 e-liquids from 42 manufacturers which were tested for Diacetyl (DA) and Acetyl Propionyl (AP). Less than 2.5% of all of the juices tested contained more than 22 ppm of DA. If that’s the “good news”, the bad news is that 24% contained levels of DA in excess of 45 ppm. What, if anything, happens now?

Vapers are faced with the reality that a significant health threat is posed by the presence of DA in almost one in four e-liquids. In some cases approaching 100 times “safe” levels.

The vaping industry needs to aggressively pursue the elimination of the use of DA in e-liquids. The question is how can that be accomplished? And who is in the best position to make it happen?

Identifying a solution begins with identifying the stakeholders. Who has “skin in the game”?

The distribution channel for vaping products involves a lot of players that can be segmented into a pyramid. With the largest group at the base of the pyramid and successively smaller groups as we move up to the pinnacle.

Consumers

Numbering in the millions, vapers are the single largest stakeholder in the equation. They make up the base of our pyramid.

Nothing happens until somebody buys something. The market responds to consumer demand. If a sufficient number of vapers refuse to buy e-liquids that contain AP, suppliers will respond by reformulating juices. Demand can dictate supply.

The downside of addressing AP at the consumer level – it could take a long time for declining sales to emerge. And there is always the possibility that sales of DA products will never decline to a point where manufacturers could justify the additional costs of reformulating dozens of popular products.

Retailers

In terms of sheer numbers, retailers would be the next segment in the pyramid. There are an estimated 15-16,000 brick and mortar retailers across the U.S. If there is an estimate of online retailers, I haven’t found it. It would be safe to say there are many thousands.

Retailers are a diverse group. Some are quite large. Others quite small. Some are not only retailers, but also manufacturers of their own juices. Some are retailers, manufacturers and wholesalers – all under one roof.

Overall, these businesses are likely to be slow to make changes until regulatory or market demands make those changes imperative.

Wholesalers/E-Liquid Manufacturers (Labs)

In this context e-liquid manufacturers are primarily wholesalers. They purchase flavor extracts and base components and then create their own recipes which they sell to retailers.

But again we run into a blurring of the lines between segments of the distribution channel. Most e-liquid manufacturers are wholesalers but many are also retailers.

Wholesalers represent a smaller group in the pyramid mostly due to higher start-up costs.

Some e-liquid manufacturers, seeing an opportunity for a marketing advantage, may incur the cost for reformulating their juices to be AP free. A handful have already indicated they will.

Others will likely be more conservative. Waiting to see how the market reacts to the AP problem before committing the financial resources to make changes.

We could see wholesalers insist that independent lab test results be provided by the extract companies. At a minimum for flavors associated with DA or AP. Possibly for all extracts.

Flavor Extract Manufacturers

This is the first of only two stakeholders in the pyramid that, should they choose to do so, are in a position to virtually eliminate the AP threat.

AP is not a component of PG, VG or nicotine. It is not a by-product of heating. Other than very low levels of “contamination”, AP is present in flavor extracts because it is intentionally added.

While removal of AP by extract manufacturers may seem to be the obvious solution, it would almost certainly lead to price increases that will ultimately filter down to the consumer.

If one or more of the extract manufacturers decided to remove AP to accommodate the vaping industry, they would likely have to create a new product line of extracts specifically for inhalation. That in turn would raise all kinds of questions regarding reformulation costs, independent lab testing costs, and product liability. Big questions.

FDA

The FDA is obviously not in the e-cigarette distribution channel. But they are in a unique position to address the AP problem. Probably with very little resistance. They also are, in this blogger’s opinion, obligated to do so.

The FDA’s mandate is to regulate in the interest of public health based on science. DA and AP are public health risks.

Extract manufacturers, some of which are very large companies, might lobby against the regulation. But given the explosive growth of e-cigarettes which is expected to continue for the foreseeable future, it’s difficult to imagine existing companies and/or new ones would not be more than happy to meet the demands of this multi-billion dollar market.


In a podcast interview on SoundCloud, Mike Hernandez, Director of Operations for Vapor Shark, indicated that there has been both positive and negative feedback on their decision to publish the results of the lab testing.

The risks of DA and subsequently AP have been known for some time. If this decision by Vapor Shark ultimately leads to the elimination of these health risks, it will be a victory not only for vapers but for the vaping industry. Well done Vapor Shark.


We are sincerely interested in your thoughts and comments! Please join the conversation and invite others by sharing this post! Thank you for visiting our site and we hope that you will come back often!

Dave Coggin has a Master’s Degree in business and spent 35 years in corporate America. He is a co-founder and partner in DIYELS. He has spent the last five years actively researching and following the evolution of the e-cigarette industry. He is a strong proponent of e-cigarettes as the most promising option currently known for tobacco harm reduction. He may be contacted directly at dave@diyels.com .

The opinions presented here are exclusively those of the author. Vaper’s Vortex is offered as a service to our customers and followers. Anyone considering e-cigarettes as an alternative to tobacco cigarettes should seek qualified advice from a medical professional.

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