Specialist
Former executive at Juul Labs Inc
Agenda
- US and Canada’s vapour market structure and upcoming regulatory impacts, highlighting FDA’s (Federal Drug Administration) PMTA (pre-market tobacco authorisation) decision on Juul
- Potential impact of PMTA ruling on Juul, its competitors, pricing and ex-US markets
- Vapour growth dynamics vs heat-not-burn tobacco and combustibles
- Juul's competitive positioning in the US vapour market, and impact on the business of legal cases and media attention
Questions
1.
Could you outline the US and Canada’s tobacco market’s structure, including its size and the split between tobacco, vapour and heat-not-burn products?
2.
You mentioned Juul’s PMTA [pre-market tobacco authorisation] was meant to be finished in September 2021. What’s been causing the delay? At what stage do you think proceedings are in the US?
3.
How might regulatory changes, including the upcoming PMTA play out? What key factors from Juul might sway the FDA [Federal Drug Administration] in either direction?
4.
Could there be any offshoot action from the PMTA ruling, such as further menthol bans or regulation around the nature of products?
5.
Is there any risk that the nicotine allowance within the US might change as a result of the PMTA ruling?
6.
Let’s say best case Juul receives approval but there are some flavour bans. I tend to agree with you that this is starting to occur on tobacco products, particularly menthol. How might this impact the vapour TAM in the US? Could it significantly change it or make it harder to access?
7.
You mentioned that the vapour category seems quite price-elastic. To what extent does price affect volumes and where consumers shop?
8.
You mentioned the FDA considers PMTAs by manufacturer rather than by industry. Do you think Juul is better-positioned vs competitors to get approval?
9.
There seems to be a lot of negative press around Juul and politics always plays a role in sin stock names. Do you think Juul can do any more marketing or campaigning to help its cause?
10.
Do you think everything that’s happening in the industry will continue to accelerate heat-not-burn adoption in the US and Canada, which seems to have been a small market pre-2020?
11.
How might the Juul PMTA judgment impact ex-US markets, such as Canada or the UK? Do you think there’ll be overflow consequences? Could there be positives ex-US if this does go favourably for Juul?
12.
Do you think the PMTA ruling will be the end of the legal battles and regulation challenges, particularly if it is a positive result for Juul and others? Alternatively, do you expect these issues to continue, given the opposition to such players?
13.
What are your thoughts on Juul’s strategy and new management? There’s been criticism from certain media outlets.
14.
You mentioned Juul is trying to pull all the legal proceedings against it into one large suit rather than fight them individually in each US state. Do you think the company will be able to do this, given how the US is structured? How financially damaging could this be for Juul if not?
15.
What is your outlook for Juul within the US and Canada? Do you think it still has a highly viable business model, can gain a lot of traction and penetrate the market to full effect? Do you think it can achieve what many expected prior to the court rulings we’ve discussed?
16.
You mentioned Juul has stopped a lot of innovation and investments. Have its competitors followed suit?
17.
How detrimental are Juul’s current and potential market share losses within the US vapour market?
18.
Which competitor – such as Vuse or Myblu – do you think poses the most threat to Juul?
19.
Do you think it’s only a matter of time before the FDA pursues the disposable players? How have they been able to skate under the radar?
20.
How do Juul and Vuse’s price, quality and consumer perception compare?
21.
Do you think the FDA’s PMTA judgment could lift the US vapour market’s barriers to entry even higher? Has it now become quite a concentrated market?
22.
Juul has had a very turbulent life as a company, experiencing many challenges over the last few years. Are there other potential risks or blind spots that might further erode its performance or hinder growth?
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