Speaker 1: It's Thursday. I'm Oscar Emiraz from the Daily Dive podcast
Speaker 1: in Los Angeles, and this is reopening America. Cigarette smoking
Speaker 1: may have had a comeback during the coronavirus pandemic. Americans
Speaker 1: are spending less on travel and entertainment and as a
Speaker 1: result or having more opportunities to light up. We're also
Speaker 1: seeing that some people are moving away from vaping and
Speaker 1: returning to traditional cigarettes after restrictions on e cigarette flavors.
Speaker 1: Jennifer Maloney, reporter at the Wall Street Journal, joins us
Speaker 1: for more. Thanks for joining us, Jennifer, Thanks for having
Speaker 1: me some of the side effects of the pandemic. An
Speaker 1: interesting thing, cigarette smoking is making a comeback. People are
Speaker 1: spending less on travel and entertainment. Uh, they're spending more
Speaker 1: time at home and having more opportunities to light up.
Speaker 1: They're also switching back to traditional cigarettes more from vaping devices.
Speaker 1: Jennifer tell us a little bit about this. Well. The
Speaker 1: maker of Marlborough cigarettes, a company called Ultria UM, makes
Speaker 1: a quarterly disclosure on how it's businesses way, and this
Speaker 1: week they disclosed that the cigarette business is doing a
Speaker 1: lot better than they thought it would be. UM they
Speaker 1: revised their projections and said that, you know, although we've
Speaker 1: been seeing a decades long decline and cigarette sales, that
Speaker 1: actually the picture is looking a lot rosier. And they
Speaker 1: say that it's in part because people are at home,
Speaker 1: not going out and socializing with friends as much during lockdown,
Speaker 1: and have more time to smoke. They say that, yes,
Speaker 1: unemployment numbers are high, but stimulus checks are helping low
Speaker 1: and middle income cigarette smokers afford their packs of cigarettes.
Speaker 1: And at the same time, they say that the recent
Speaker 1: restrictions on e cigarette flavors that the federal government put
Speaker 1: in place have motivated some people to switch back to
Speaker 1: traditional cigarettes. Yeah, I've been a lot of public health
Speaker 1: advocates are not gonna like hearing that mulist checks in
Speaker 1: increased undemployment benefits is making more people still buy them.
Speaker 1: But one of the interesting things that they said though,
Speaker 1: they said that the trend is significant enough to slow
Speaker 1: down the year's long decline. So to be clear, cigarette
Speaker 1: smoking is not necessarily going up. Uh, you know, it's
Speaker 1: not going into other territory. It's just kind of slowing
Speaker 1: that decline right now. Right, So for many, many years um,
Speaker 1: the number of cigarette smokers has been on the decline
Speaker 1: in the US, cigarette sales has still been a very
Speaker 1: profitable business for the big tobacco companies, but they have
Speaker 1: had to adjust to kind of a predictable decline. Every
Speaker 1: year they've seen like a four to six percent decline
Speaker 1: and cigarette sales. But this year that number is looking
Speaker 1: a lot better for them, So they revised their projections
Speaker 1: for the year and they said that cigarette sales are
Speaker 1: expected to decline only between two and three and a
Speaker 1: half percent. That's a big difference for them. On the
Speaker 1: e cigarette side, i'll Tria, as you mentioned, you know,
Speaker 1: they owned Marlble Marlborough. They made a big wager on
Speaker 1: e cigarettes in eighteen. They bought a huge steak in
Speaker 1: Jewel Labs. But you know, Jewel Labs went through a
Speaker 1: bunch of different problems that you said. The f D
Speaker 1: a kind of limited the sales of the fruity h
Speaker 1: and mint flavors of the cartridge cigarettes, and then there
Speaker 1: was that whole vaping related lung illness, which actually wasn't
Speaker 1: really related to the cigarettes themselves. It was more vaping
Speaker 1: products with THHC. But still overall that kind of put
Speaker 1: a damper on the e cigarette business. It did, so
Speaker 1: it was it was a rough year, uh for e cigarettes.
Speaker 1: If you think back to last fall, UM, there are
Speaker 1: headlines in the news every day around vaping and e cigarettes,
Speaker 1: whether it was the surge in young people vaping and
Speaker 1: public health officials trying to figure out how to stop
Speaker 1: children and teens from vaping. UM. Then there was this
Speaker 1: mysterious long illness that seemed to be linked somehow to
Speaker 1: vaping devices. UM. The c d C put out a
Speaker 1: recommendation not to vape anything, including traditional e cigarettes you
Speaker 1: know that that deliver nicotine. UM. Then they revised that
Speaker 1: advice as more research came in indicating that the illnesses
Speaker 1: were linked to vitamin E oil in marijuana vaping devices.
Speaker 1: But at first they were saying don't vape anything. So
Speaker 1: all of that contributed to kind of a damping effect
Speaker 1: on UM vaping and some people sort of the main
Speaker 1: takeaway from all that news coverage was maybe e cigarettes
Speaker 1: aren't such a great alternative. I'm going to switch back
Speaker 1: to cigarette still. The group that took back to cigarettes
Speaker 1: leaving you know, the vaping scene were Americans older than fifties.
Speaker 1: From what Altria said, and you know, you have to
Speaker 1: obviously they're talking in a business sense but it sounds
Speaker 1: so nefarious sometimes. They said it benefited the entire cigaret
Speaker 1: at category people kind of moving away and going back
Speaker 1: to traditional cigarettes. They have said that the demographic that
Speaker 1: they see shifting back to cigarettes is this fifty plus adults.
Speaker 1: And they further noted that those older adults tend to
Speaker 1: prefer discount cigarettes. So it's actually hurting Marlborough's share right
Speaker 1: now of the cigarette category because as these older adults
Speaker 1: switch back from the cigarettes to cigarettes, they're not buying
Speaker 1: premium brands like Marlborough, They're buying the cheaper ones um
Speaker 1: and so that's chipping away at Marlborough's market share. Wow,
Speaker 1: what an interesting look and to see, you know, how
Speaker 1: things change over time and throughout you know, a pandemic
Speaker 1: as we're going through. Jennifer Maloney, reporter at the Wall
Speaker 1: Street Journal, thank you very much for joining us. Thanks
Speaker 1: for having me. I'm Oscar Ramires and this has been
Speaker 1: reopening America. Don't forget that. For today's big news stories,
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