Among the thousands of e-cigarettes vying for consumers’ attention today, there are a few that stand out, even controlling a huge share of the market. Launched only in 2015, the Juul has achieved viral success. This compact, USB-like device has kickstarted a major trend called pod vaping, and it’s so well-known among the community that vapers have transformed it into a verb (“Juuling”). Juul Labs, its parent company, is valued at more than £30 billion. It already lays claim to 76% of the e-cigarette market in the US as of 2018, with impressive performance as well in the UK and other countries.
So what is the secret to Juul’s meteoric rise?
How Juul Started
Juul’s story echoes that of other Silicon Valley startups. Adam Bowen and James Monsees were graduate students taking up product design at Stanford. They wanted to solve the problem of how to get smokers to quit. They both agreed that, rather than stopping cold-turkey, smokers needed a ritual that would act as a substitute. Although e-cigarettes were already flourishing then, they were aiming for a solution that was “as close to a cigarette experience as possible.”
They first launched a San Francisco-based startup called Ploom before renaming to Pax Labs. Their initial product in 2012 was Pax, a vapouriser for marijuana, tobacco, and other dry herbs. But their big break came in 2015 when they released the Juul, which used nicotine salts instead of regular e-liquid. It was the product of countless experiments, and the co-founders constantly tested the chemical formulas on themselves. This paid off, though, since the Juul quickly rose from being an underdog to one of the industry’s major stars.
The Juul Product
There are two main reasons why Juul stood out among all of the other e-cigarettes in the market:
The Juul features an extremely sleek, minimalistic design, earning it the nickname of “iPhone of e-cigarettes.” It’s light and narrow, easily fitting inside a clenched fist. For changes in flavour or refills, a compatible replacement pod is slotted in, consisting of a tiny cartridge with enough vape juice to match one whole pack of cigarettes. Aside from the beauty of the design, the Juul also mimics the iPhone in that it’s extremely easy to use, even for total beginners. No need to press a button—the Juul is automatically activated by your breath, so an inhale is all it takes to start vaping.
Although Juul isn’t the first to use nic salts, it can be credited for making nic salts mainstream. Nic salts are formed by combining freebase nicotine, the type used in regular e-liquid, with acid, commonly benzoic acid. The main benefit of nic salts is that they can deliver nicotine at high concentrations such as 20 mg and above while maintaining a pleasant throat hit. At the same time, the nicotine high may take a few minutes to kick in, but it lasts much longer compared to regular e-liquid. The heightened nicotine has been a huge draw for vapers, especially for smokers who need more nicotine to feel satisfied. Juul offers nic salts in various flavours, including mango, crème, and cucumber.
Since its launch in 2015, Juul’s growth has been astonishing. Just from 2016 to 2017, sales went up by 641%,while the figures point to 800% from 2017 to 2018. Because of this huge spike in sales, the number of employees went from 225 to around 1,500 in 2018. Aside from its factory in Simi Valley, offices are likely to be opened in several cities throughout the US, including Boston, Chicago, and Iowa.
Given its success in the US, the company has high hopes for doing just as well in other countries. It started branching out internationally in 2009, targeting countries such as the UK, France, Singapore, and Israel. Interestingly, cigarette sales all over the US have been dropping, and Juul says that its product has played a significant role in helping smokers transition. Analysts from Piper Jaffray say that around 25% to 45% of Juul products might be replacing cigarettes.
Juul has already made history for its rapid growth as a consumer product, and its current prospects look extremely good. Altria, a huge player in big tobacco and the owner of Marlboro, bought a 35% stake in Juul, turning the co-founders of Juul into billionaires.
Public Health Initiatives
In business, the only way to thrive is to keep evolving and adapting. For all the market success that its product has achieved, Juul hasn’t become complacent. In fact, it’s stepping up its ambitions by venturing into other initiatives while staying true to its original mission of helping smokers quit.
The company has specifically taken on a public health focus. In February 2019, Juul made waves across both the media and the scientific community with a study that it sponsored. The study focused on the tobacco-related biomarker levels of previous smokers who switched to Juul for five days. These biomarkers are higher among smokers, and they’ve been linked to an increased risk for cancer. Surprisingly, even if the switch to Juul was only for a few days, the participants’ biomarker levels had gone down, and their levels were almost as low as those of smokers who went cold turkey.
Although more research still needs to be done on vaping, with a longer time frame spanning decades, this study reaffirms previous research, including that from Public Health England, that e-cigarettes are a much healthier alternative for smokers. All in all, Juul has finished five other clinical trials involving its products while three are still ongoing, and It’s also offering a multimillion-pound grant for additional vaping research.
Unlike most other vaping companies, Juul has a behavioural research and intervention team to support its public health efforts. The team is trying to assess factors that can help smokers quit, from product details to social influences. Its director is Erik Augustson, a behavioural scientist who was also involved with anti-smoking initiatives at the National Cancer Institute.
Beyond research, Juul is looking into digital health, with plans to release a Bluetooth-enabled device that syncs with a mobile app. The app is meant to give support to smokers while they’re trying to quit. No clear details are out yet, but possible features include a social network, motivational videos, or a habit tracking module.
Juul is an Industry Disruptor
Juul’s rise won’t be ending anytime soon. With strong backers, a product that has gained a devoted customer base, and aggressive expansion plans, its exponential growth will only be continuing in 2019. There might be some surprises in store as well, as Juul is exploring digital health and research at a level that no vaping company has attempted before. In any case, it’s already an industry disruptor, and for anyone who’s in the vaping business world, Juul is a company worth keeping an eye on.