Pressing issues facing major convenience categories

We are less than one month out from the annual NACS Show, held this year in Atlanta, Georgia from October 1st thru October 4th. With over 400,000 square feet of expo space featuring over 1200 major players, the show is an opportunity to explore what’s new and exciting in the world of convenience. Yet as October approaches, a number of strong convenience categories face uncertainty, whether from a regulatory perspective or a consumer preference perspective. Here are four major questions that may or may not be resolved by time the NACS expo floor opens (and four educational sessions that will address those questions):

  1. Will Flavored E-Cigs Be Banned? Flavored vaping an electronic cigarettes have faced increased scrutiny over the past year due to what the U.S. Food and Drug Administration (FDA) labeled “an epidemic” of youth usage. Leading player JUUL voluntarily removed flavored products from the majority of brick and mortar retailers, yet calls for an outright flavor ban have continued. The issue came to a head this week after a spike in unknown vaping-related illnesses, including a handful of deaths. While the FDA and CDC have not yet determined the cause (though many have indicated that the illnesses are due to black market THC vaping cartridges using Vitamin E acetate), President Trump indicated that he would push to ban any flavored vaping product—including mint and menthol—within the next month. (Learn more at the “Retail Under Attack: The Importance of Tobacco Training” session on October 2nd)
  2. Will CBD Be Fully Legalized? No doubt, the convenience industry has its eye on cannabis and especially the specific cannabinoid called cannabidiol (CBD) after the 2018 Farm Bill seemed to legalize low-THC hemp products (a category CBD falls into). However, the FDA quickly jumped into the issue, stating that while the Farm Bill legalized hemp, it gave the FDA oversight to regulate hemp in food or vitamin supplement products. While the agency has held hearings on CBD, it has repeatedly warned that the rulemaking process will take years—and until then, it remains illegal to sell CBD that’s been added to food, beverage or supplements. Though the public and Congress have called for a swifter resolution for the issue, CBD remains in a legal gray area. So much so that, while the NACS Show will feature a CBD-specific section of the Expo, suppliers are not allowed to have products on the floor, only empty packaging. (Learn more at the “Cannabis, Marijuana, CBD: The Practical and Legal Outlook” educational session, moderated by iSEE’s Melissa Vonder Haar on October 2nd)
  3. Will Boozy Seltzers Cruise into the Fall/Winter Season? On the alcohol side, it’s been a summer of hard seltzers with Wells Fargo analyst Bonnie Herzog crediting strong convenience alcohol sales this summer to the “continued momentum in FMBs/hard seltzers.” The analysts’ annual “Beverage Buzz” retail survey was full of retailers singing the segments’ praises, with one respondent saying “for alcoholic beverages it’s all about White Claw… Stores that do get product in sellout in a few hours. It’s kind of gone crazy.” The question is, can that momentum continue into the colder months? (Learn more at the “Cold Vault Trends and Takeaways” session on October 3rd)
  4. How Will Consumers Respond to iQOS? On the flip side of the flavored vaping issues lies the U.S. launch of Altria and Philip Morris International’s long-awaited heat-not-burn iQOS product. After years of investments and test markets in Europe and Asia, the product—which heats actual tobacco instead of liquid nicotine, like e-cigarettes—was granted permission from the FDA to sell in the United States. Interestingly enough, Atlanta is the market Altria chose for its first U.S. test market. “We think Altria’s choice of location (Atlanta) & timing (Sept) for its initial 500-store iQOS launch was wisely calculated,” Herzog wrote in a research note. “The NACS event essentially provides a ‘captive audience’ for Altria to showcase iQOS, both at NACS and via private onsite tours.” (Learn more at the “Evolving Your Tobacco Category” session on October 1st)