Did Juul Lure Teenagers and Get ‘Customers for Life’?

27 August 2018:

By Matt Richtel and Sheila Kaplan

The e-cigarette company says it never sought teenage users, but the F.D.A. is investigating whether Juul intentionally marketed its devices to youth.

SAN FRANCISCO — The leaders of a small start-up, PAX Labs, gathered at a board meeting in early 2015 to review the marketing strategy for its sleek new electronic cigarette, called Juul. They watched video clips of hip young people, posed flirtatiously holding Juuls. And they talked about the name of the gadget, meant to suggest an object of beauty and to catch on as a verb — as in “to Juul.”

While the campaign wasn’t targeted specifically at teenagers, a former senior manager said that he and others in the company were well aware it could appeal to them. After Juuls went on sale in June 2015, he said, the company quickly realized that teenagers were, in fact, using them because they posted images of themselves vaping Juuls on social media.

The former manager said the company was careful to make sure the models in its original campaign were at least 21, but it wasn’t until late 2016 or January 2017 that the company said it decided the models in all Juul ads should be over age 35 — to be “better aligned” with a mission of focusing on adult smokers. Only in June of this year did the company again change its policy, this time to using only real people who had switched from cigarettes to Juul.

The company recently modified the names of its flavors — using creme instead of crème brûlée and cucumber instead of cool cucumber. Juul said it “heard the criticism” that teenagers might be attracted to the flavors and “responded by simplifying the names and losing the descriptors.”

The sales campaigns for Juuls — now hugely popular with teenagers across the nation — are at the heart of a federal investigation into whether the company intentionally marketed its devices to youth. The attorney general of Massachusetts, also investigating the company, contends that Juul has been luring teenagers to try the product and has introduced many to nicotine. Her investigation will examine Juul’s efforts to audit its own website and other online retailers that sell its products to see how effective they are at preventing minors from accessing Juul or Juul-compatible products. (Federal law prohibits sales of e-cigarettes to anyone under 18.)

“From our perspective, this is not about getting adults to stop smoking,” the Massachusetts attorney general, Maura Healey, said in an interview. “This is about getting kids to start vaping, and make money and have them as customers for life.”

And Cult Collective, the marketing company that created the 2015 campaign, “Vaporized,” claims on its website that the work “created ridiculous enthusiasm” for the campaign hashtag, part of a larger advertising effort that included music event sponsorships and retail marketing. A spokesman for Cult Collective declined to comment.

Examples of Juul’s advertising from 2015. The company’s current marketing is far more sober-looking, with a less colorful, more adult design.

The company, now called Juul Labs, denies that it ever sought to attract teenagers. James Monsees, one of the company’s co-founders, said selling Juuls to youth was “antithetical to the company’s mission.”

The original sales campaign was aimed at persuading adult smokers in their 20s and 30s to try an alternative to cigarettes, but it “failed to gain traction on social media and failed to gain sales” and was abandoned after five months, in the fall of 2015, said a company spokesman, Matt David.

Mr. David said sales didn’t take off until 2017, after Juul had improved its sales and distribution expertise, and, by then, had a more sober online marketing campaign.

The former Juul manager, who spoke to The New York Times on the condition that his name not be used, saying he worried about facing the ire of the company, said that within months of Juul’s 2015 introduction, it became evident that teenagers were either buying Juuls online or finding others who made the purchases for them. Some people bought more Juul kits on the company’s website than they could individually use — sometimes 10 or more devices.

“First, they just knew it was being bought for resale,” said the former senior manager, who was briefed on the company’s business strategy. “Then, when they saw the social media, in fall and winter of 2015, they suspected it was teens.”

The Food and Drug Administration announced it was investigating Juul’s marketing efforts in April. Juuls and other e-cigarettes are regulated by the F.D.A. as tobacco products because nicotine derives from tobacco leaves. E-cigarette users inhale far fewer toxins than do smokers of traditional cigarettes. The nicotine inhaled while vaping is less a concern for adults than these toxins, but it remains a serious health issue for teenagers, whose brains are still developing.

The Juul story highlights a central dilemma in public health. Cigarettes remain the leading cause of preventable death in the United States, killing more than 480,000 people a year. But will it be possible to get people who are addicted to cigarettes to switch to e-cigarettes, which are less harmful, without enticing a new generation or non-smokers to try them?

Image

Juul’s offices in San Francisco. The company’s plight underscores a central health dilemma: how to get people addicted to cigarettes — the leading cause of preventable death — to e-cigarettes, which are less harmful, without getting young people hooked as well.CreditJason Henry for The New York Times

The F.D.A. commissioned research, published in January, that found “limited evidence” that e-cigarettes lead smokers to quit. And some evidence now suggests that young people who use e-cigarettes are more likely to try cigarettes.

Juul, in a letter responding to the F.D.A.’s demand for documents, said it had converted one million smokers to Juul, but the company data is drawn from self-reported surveys on its website and is unverifiable.

[Here’s how schools are dealing with the rise in popularity of e-cigarettes.]

Dr. Scott Gottlieb, who heads the F.D.A., declined to comment on the agency’s investigation of Juul. But he has long been hopeful that e-cigarettes or other similar devices, properly regulated, will prove a safer alternative to smoking and help people quit the deadly habit. Before becoming F.D.A. commissioner, he served on the board of directors of Kure, a retailer that sells e-cigarette products.

“Two-thirds of adult smokers have stated they want to quit,” he said. “They know it’s hard, and they’ve probably tried many times to quit. We must recognize the potential for innovation to lead to less harmful products.”

But Eric Lindblom, a former F.D.A. tobacco official who heads the tobacco control program at Georgetown Law, said Juul’s internal concerns about teenage use demonstrate they are in some ways “no different than the cigarette industry.”

“They are going to maximize their sales and profits any way they can,” he said. “They are going to do that within the law, but they are going to press the gray areas as much as they can.”

Juuling becomes a verb

Over the last three years, Juul has had a meteoric rise. It has become the dominant seller of e-cigarettes, now controlling a remarkable 72 percent of the market, according to Nielsen data. In July, the company completed a round of fund-raising for $1.2 billion, putting it in rarefied air. From a virtual standing-start in 2015, it is now valued by investors at $16 billion.

Source: New York Times