Tag Archives: Blu

Slumping cigarette sales prompts R.J. Reynolds-Lorillard to talk merger

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A very interesting story about major changes in the works in the tobacco industry.

The No. 2 tobacco company in America — R.J. Reynolds — is in talks to buy the No. 3 tobacco company in America — Lorillard (which I have misspelled Lollilard more times than I can count.). Imperial Tobacco is also involved in the deal.

This deal would create a $56 billion company and would create a monster rival to the dominant No. 1 tobacco company in America — Altria, otherwise known as Philip Morris (its dominant brand is Marlboro, of course).

Reynolds and Lorillard would combine for 42 percent of the cigarette market, joining Reynolds’ big product — Camel — what Lorillard’s — Newport. Other Lorillard brands are Kent and Old Gold, while other Reynolds’ other brands are Pall Mall, Winston, Salem and Kool. But, Camel and Newport are the dominant brands.

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The new joint company then would sell off several of their smaller brands to Imperial Tobacco, a British-owned company that would then become the No. 3 company in America.

According to the New York Times, declining cigarette sales are driving this move, as both companies work to restore their past profits. E-cigs are also a factor in this deal, as the e-cig industry is booming (got mixed feelings about that), and Lorillard owns the No. 1 e-cig brand, Blu E-Cigarettes.

According to the New York Times:

Still, a takeover of Lorillard by Reynolds would represent the industry’s boldest response yet to a declining, if still profitable, market. A general drop in smoking rates and aggressive public health campaigns aimed at curbing smoking have cut into sales in the United States.

About 42 million people in the United States, or nearly 18 percent of the adult population, smoke cigarettes, according to the Centers for Disease Control and Prevention. That compares with about 21 percent of the adult population nearly a decade ago and 43 percent of the adult population in 1965, according to the C.D.C.

What remains of the traditional cigarette industry is dominated by Altria, whose Philip Morris arm sells one out of every two cigarettes in the United States.

Opportunity has beckoned in the new business of e-cigarettes. A deal by Reynolds to buy the leading purveyor of e-cigarettes could spur other mergers within the industry as manufacturers jockey for position.

“This transaction in our view will be very positive for the global tobacco industry and could be just the beginning of future transactions with e-cigs/vapor being the underlying catalyst,” Wells Fargo analysts wrote in a note.

Anyway, interesting story as the industry adjusts to a rapidly changing and evolving market. This deal is not cast in stone, as it must be approved by federal regulators and could face scrutiny over

A really kind of despicable ad from Blu e-cigs

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From the category of “Are you kidding me???”

Blu e-cigs (owned by Lorillard tobacco) is pulling out all the stops lately using the same ad techniques cigarette companies used.

I try to stay on the fence on e-cigs, because they might help some people quit smoking, but when I see ads like this, I feel less and less inclined to defend them. They’re stealing the 1960s tobacco industry playbook. One of the biggest problems I have with e-cigs, and one of the reasons I don’t fully trust them or their manufacturers, is they keep relying on advertising trying to make their product look sexy and dangerous.

This ad appeared in the Sports Illustrated swimsuit edition. It’s not even remotely subtle, fairly blatantly using sex to try and sell their products. I would find it funny, but teenaged use of Blu e-cigarettes has more than doubled, according to the CDC. Hey, get kids those kids addicted to nicotine early. You want to get into a girl’s panties? Look sexy by using e-cigs.

Bad move, Blu. Too blatant. Too … creepy. It’s this kind of advertising that is going to help get e-cigs regulated.

Sexy e-cigarette advertising

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I noticed this beginning a couple of months ago — a sexy new ad campaign for an e-cigarette called Blu.

I first saw an ad on TV and was shocked to see a cigarette ad on TV, then realized it was for an e-cigarette. However, it was using the same techniques used in old cigarette ads — hip, young, sexy people using their product looking cool.

The TV ad features B-movie actor Stephen Dorff (remember him as the evil vampire in “Blade?”) talking about how e-cigs have freed him from being a “human ashtray” and allows him to “enjoy smoking without infecting the people around me.”

“C’mon, rise from the ashes,” Dorff concludes.

You’ve probably seen Dorff in a bunch of magazine ads. Sports Illustrated and many other magazines have them every week. Cool, sexy-looking, using retro B&W photography (with the Blu e-cig standing out in blue). This Business Insider article is pretty critical of the whole campaign for employing ancient cigarette advertising techniques.

Here’ is Joe Rogan’s really funny take on the Dorff commercial, mashing it up with a really bad Brad Pitt Chanel No. 5 ad to create the “douchiest ad ever.”

The Blu commercials are very careful not to tout their product as an aid to quitting smoking. They’re more about how to avoid smoking. E-cigs don’t have a good reputation for helping people quit. Every single person I’ve ever talked to who has used them has told me they were no help at all. (If you don’t know much about e-cigs, they’re not cigarettes at all, they give the user a little jolt of nicotine-laced steam to curb their nicotine cravings. Relatively harmless and totally harmless to people nearby.)

What I noticed is that Blu and other e-cig companies are using techniques mastered by cigarette companies — make their product appear sexy by using young, smart-looking sexy people to promote the product.

Check it out. 1970s-era cigarette ad:

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Now, e-cig ads from a company called Ever Smoke