Tobacco Business Magazine on Bringing Up BO
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MMS Distribution is looking to bring a European success story to America— and to bring more smokers into the vape fold in the process.
BY JENNIFER GELFAND
IN THE VAPOR WORLD, delivering a better vaping experience has long been viewed as the only way the industry will succeed at convincing smokers of conventional cigarettes to make a switch. On the home front, innovation hasn’t been easy, especially with the uncertainty around U.S. Food and Drug Administration (FDA) regulation and the question of whether new devices will be able to stay on the market. So when MMS Distribution got the opportunity to sell Bo—a closed-system device winning rave reviews in Europe—stateside, CEO Chris Fiumara jumped at the chance. “In the last three years, we haven’t seen any thing of superior quality and design introduced,” he says. “A lot of closed-system devices have leaking issues or insufficient battery capabilities. Bo was developed to give vapers both convenience and quality.”
The Quest for Quality
Bo’s journey began in 2015 when JWell Group, a top e-cigarette manufacturer and retailer in Europe, decided to develop a vapor product that would be smaller and easier to use than the “box-style” designs currently on the market. Closed-system devices offered a better
vaping experience than e-cigarettes, but many customers found the devices too cumbersome and the need to change the coil and add e-liquid too complex. “The main issue in manufacturing a small-size product was to be able to provide a good vaping experience to the customer so they can have a decent amount of vape and some nice flavors to increase the chances of quitting smoking through an easy and enjoyable experience,” according to the research and development team at JWell. “Battery life was also an issue.” After nearly a year of R&D, JWell developed a pocket-sized device with a battery that could last the day and that offered a vaping experience comparable with larger devices on the market. It was an immediate hit. Featuring a 380 mAh battery with a 15-minute charge time, Bo is equipped with a 1.5 mL pod and comes with a lifetime warranty. Bo uses a salt-based e-juice that improves the vaping experience, adds Fiumara. “Nicotine salt allows the nicotine to metabolize faster so the person vaping gets more immediate satisfaction, similar to that of a real cigarette, without the unhealthy, unwanted effects of smoking,” he explains, noting that the juice is made in the U.S. and does not contain any diacetyl, ambrox or acetyl propionyl. The Bo One vaping kit includes the Bo One pod vape device, a magnet USB charger and two e-liquid caps at an MSRP of $39.99.
E-liquid caps are currently available in six flavors—iSee Mint Ice Menthol, Kiwiberries, Fresh Mango, Jelly Mixed Berries and Apple Juice—with nicotine contents ranging from 3.5 percent to 5.5 percent. Quickly embraced in Italy, the U.K., Germany, China and other markets overseas, Bo got a slower start when it was launched in the U.S. 19 months ago by a regional vape shop. However, MMS took over exclusive distribution of the product in August 2017 and has ambitious plans to build the Bo brand in 2018. “In the first quarter of 2018, we are prepared to spend $12 million on advertising and promoting the brand, including a mix of national television, radio and print campaigns, as well as social media and promotions and sampling at the retail level,” says Fiumara. He and team members from JWell recently shared their vapor market insights and plans for the product in the following interview with Tobacco Business.
Tobacco Business: Can you tell us about any new developments you have planned for Bo? Are there any new products or offerings in the works?
Chris Fiumara: Not exactly what we would call “new” products, as [the FDA’s deeming rules] state that products must have been on the market or registered before Aug. 6, 2016, which means we are really limited to the product lines that JWell had out in the States prior to that date. Fortunately for us they had some great products out in the States that were never marketed to scale [so] we can continue to pull from those from an expansion standpoint.
How does the vapor market in the U.S. differ from the market in Europe? From a retail channel or customer perspective, are there significant differences? What are you doing differently here with regard to marketing your product?
JWell: The European market and the U.S. market are very different for many reasons, one of which is legislation. For example, Europe does not permit the sale of any liquid with a nicotine level above 2 percent, or 20 mg, so in that market we offer juices with 0 mg, 8 mg and 16 mg of nicotine to meet that restriction. In the U.S., you can go higher with nicotine levels. Also, European legislation does not allow any advertising in “regular” channels, such as radio, TV [and] newspapers, so we can promote the product only through specialized magazines and at trade shows. However, our main advertising is through our loyal customers who recommend the device. We are very grateful for that.
What is your view of the growth prospects for the category as a whole in the U.S.?
Fiumara: Most experts see the global vaping market reaching $42 billion to $47 billion by 2025. We see more and more people each day quitting conventional, more harmful cigarettes and switching to vaping as their next step before quitting. We hope Bo is instrumental in helping those people.
What are your goals for the brand in the U.S.?
Fiumara: We want consumers to be so happy that they have absolute brand loyalty. Most companies these days pretend they care so much about their customers but do not properly convey that to the consumer. We want Bo to be the name you think of when you think of closed-end vaping devices. We know it is a hard goal to obtain, but we think it will happen.
What advice would you give to retailers to make the most of Bo’s potential?
Fiumara: Educate your customers, use the materials provided to inform customers that when they are buying Bo, they are buying the top-of-the-line system. It’s like any other product; educating the customer is key so they know why they are buying Bo over something else.
How price-conscious are closed-system vapor device consumers? Fiumara: I think customers are starting to see that, in the closed-system world, cheap becomes expensive. The first-time buyer might buy a less expensive pen, only to find that it leaks or doesn’t function properly—or ends up not working at all. But they enjoy using a vaping device and go on to buy a more reliable, warranted system like the Bo, where they spend the money once and never have to buy another device.
How do you ensure product quality and consistency?
Fiumara:I would say right off the bat that our factory setup in general separates Bo from most every device. Production of most competing devices is outsourced to a Chinese factory that does private labels. Our factory is dedicated just to our device, and production is overseen by a group of inspectors from MMS Distribution in the States, as well as JWell in France, who work directly with our manufacturing facility and are on-site day in and day out. We also have a vigorous quality-control process and a testing facility.
How concerned are you about FDA regulation? What changes have you made or do you plan to make to your business to prepare for the agency’s deeming regulations to take affect?
Fiumara: We, like any other compliant company, will continue to abide by any law or regulation the FDA has planned for the industry. Regulation isn’t always as bad as most think; we have a view that the FDA regulations might weed out some companies that perhaps are not following the proper guidelines. In the meantime, we have retained the most capable law firm that specializes in this arena and will rely on them to keep us ahead of the curve of any future regulations or changes that may come to the market. TB