The Canadian vape and e-cigarette market is growing, with more Canadians switching from traditional nicotine products every year. Vape stores now operate in every Canadian community, and disposable vapes and pods are widely available through convenience stores. But what do the key trends shaping this market look like in 2023?
With roughly five percent of us vaping these days, vape store owners need to pay attention to the nuances influencing this growth. Here is a look at market size, projected regulatory changes, and shifts in consumer behaviour for Canada’s vape market.
How the E-Liquid and Vape Market Is Growing
First, let’s look at several market predictions for e-cigarettes, vapes, and e-liquids, in Canada and beyond.
Grandview Research values the global e-cigarette and vape market at USD 22.45 billion in 2022. The market is expected to grow at a compound annual growth rate (CAGR) of 30.6% from 2023 to 2030. As a result, there could be as many as 15 million people vaping on a daily basis in the not-too-distant future.
Canada’s outlook is less explosive but still follows the global upward trajectory. 6W Research suggests a CAGR in Canada of 9.4% between 2019 and 2025.
When it comes to e-liquids, Grandview Research projects a CAGR of 13.4% from 2021 to 2027. This growth follows global sales of 1.4 billion USD in 2021. Again, in Canada, the growth rate is less intense but still follows global trends.
Vape Regulations Canada Is Tightening Soon
The Canadian government keeps a close eye on e-cigarette trends. Most experts predict more regulations coming online in the near future.
Vape industry insiders expect flavoured vape products to get renewed regulatory attention as Canada aims to reduce the appeal to adolescents.Most provinces already ban flavoured nicotine products in some capacity, but a federal proposal is also in the works.
Research and Markets’ latest report on the Canadian market strongly suggests that regulators will ban non-tobacco and non-menthol flavours in e-liquids and e-cigarettes in the future.
Retailers should monitor flavour bans in their jurisdiction and proactively manage inventory.
Price Drives Most Canadian Vape Consumer Choices
Many once assumed that the rise of nicotine vapes directly related to understanding the health concerns of smoking better. At the moment, this isn’t what is influencing most consumer behaviour.
For most people who choose to vape over smoke, it all boils down to price. TRLabs reports that more people are embracing e-cigarettes and vaping as a cost-effective alternative to traditional tobacco. The affordability of e-cigarettes is attracting thousands of people to vape every day.
Governments Are Raising Taxes on Vape Products
Both federal and provincial governments are increasing (or threatening) to raise tax rates on nicotine and vaping products. The latest federal increase came through in October 2022, with many provinces indicating they would follow suit.
Considering price drives vape customers, the effect of higher taxes at the till remains to be seen. More than 25% of Canada’s vape market already happens illegally. Will a more expensive legal product only force more buyers underground?
Ian Irvine, a professor of economics at Concordia University and a consultant on alcohol and tobacco for the federal government, suggests fewer people will make the switch from traditional cigarettes to vapes and that legal businesses will see demand decline. Domestically produced e-liquid, which is taxable, will also see a drop in sales compared with imported pods and disposables.
Vapers Want to Try New Flavours and Brands
Consumers with a go-to brand still want to try something new. Consumers always want to explore new flavours, formulations, and new brands.
Canada Convenience Store News identifies consumer openness to new vape products as a growing trend among its clientele, even without hard data on the exact scale. Canada Convenience Store News recommends that convenience stores carry a diverse inventory. The publication suggests stores ensure their product mix includes tobacco alternatives, such as cigars, snus, and vapes for those looking to try something new.
Vape Brands Are Developing Recycling Programs
Disposable nicotine vapes and pods are notoriously difficult to recycle, which remains an ongoing frustration for eco-conscious consumers. The Research and Markets 2022 report indicates that waste programs will become increasingly important over the coming years.
As Research and Markets documents, both TerraCycle and Quantum Lifecycle Partners have created specialised recycling solutions. Both companies aim to ethically process the growing level of e-cigarette and cannabis vape waste.
Retailers hearing customer concerns about vape waste should consider having waste solutions in place. Do you have waste solutions in place for them?
The Vape Market Keeps Growing Despite Taxes
The Canadian vape and e-cigarette market shows no signs of stopping its upward trajectory. Not even taxes or flavour bans.
Still, consumer preferences are shifting in ways worth noting. For example, price drives sales first and foremost. While a varied selection comes in second. On the regulatory front, more provinces and the federal government are likely to double down on the non-tobacco and non-menthol flavour ban.
Want to see how TechPOS can help you manage inventory and make business administration more efficient? Schedule a Demo Today.