Innovation is Key in E-Liquid Marketing

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By Thomas Schmid

The market for e-liquids is highly competitive while increasingly restrictive regulations in many countries heat up the battle even further. Only intuitive ideas and smart innovation help players survive in this difficult environment. Tobacco Asia picks the brains of two leading companies.

Elda: Always One Step Ahead

Croatia may be better known for idyllic islands, sun-kissed beaches, centuries-old quaint towns, and hearty Balkan cuisine, yet the country surprisingly also is home to one of the most successful manufacturers of e-liquids in the world. Elda Ltd., based in the city of Nova Gradiska, began developing and manufacturing e-liquids in 2008. It’s been hard work to become one of the industry leaders, though. Especially in the first few years, Elda had to stand its ground against competition that grew at a mind-boggling pace as everybody all of a sudden seemed to scramble to jump on the e-juice bandwagon.

To succeed in this highly competitive environment, our strategy from the beginning has been to offer innovative products of the highest quality and to always keep at least one step ahead of everyone else,” says the company’s founder and c.e.o., Dario Darenic. “Whenever we launch a new product or service, we already think of the next step and explore how we can further improve on it.”

From Research to Final Product

That doesn’t mean that Marenic is just resting on his laurels by simply revamping a handful of long-standing products over and over again. Research and development are very much an ongoing commitment at Elda, too. “Innovation in our business is primarily expressed through new, different types of flavors or different types of packaging or a different, completely new approach to producing e-liquids,” Marenic explains. And as market competition remains very strong, he knows that his company can only remain ahead of the pack if it offers its extremely quality-conscious customers and business partners alike better products and services than ”the others”.

To achieve that can be quite a daunting and resource-intensive task, which is usually preceded by “market research to determine what is currently trending among vapers.” Based on these consumer surveys, the company’s chemical engineers then cook up a slew of new recipes, whereas some of the prototype samples need to mature and “ripen” for 30 days or longer in order to develop their envisioned aroma profile. Some may fail, but those that don’t are subsequently subjected to rigorous, multiple lab testing rounds, again with the majority not making it through.

“Though sometimes we create more than 50 new formulas, more often than not we eventually discard all but one that we deem suitable for commercial production because its taste and aroma properties fit in with the findings of our consumer studies,” Marenic says.

A Symphony of Innovative Flavors

Elda’s level-headed approach of driving the industry through innovation is perhaps best illustrated by its newest product line, branded Premium. Heeding current trends in the global market, it comprises a range of e-liquids that convince with their exceptionally creamy and rich vapor and mellow fruity flavor variants such as Pink Lemonade, Tropical Island, Milkshake, Minty and, yes, Granny’s Strudel. The first crowd (including a host of movie celebrities) that was able to acquaint itself with Premium were the guests at an exclusive Academy Awards viewing dinner in early March in Hollywood. “I can confidently say that Elda was the very first e-liquid manufacturer ever to showcase its products at such an important and illustrious film industry event, and it certainly has been a fantastic promotional opportunity not only for Premium but also our other products,” says Marenic.

Which brings us to 4U, a product line further attesting to Elda’s innovativeness, this time targeted at consumers who prefer a more intensive flavor and stronger “throat hit”. With popular aromas like Iceberg, Pink Fruits, Blue Vape, Gold Tobacco, and Forest Berries, 4U only uses ingredients sourced entirely in Europe, thus ensuring the utmost quality. And of course, we also should mention Totally Green, an e-liquid line that appeals to highly individual consumers who normally would forego run-of-the-mill flavors. Like all Elda products mixed in a clean room and packaged under impeccable hygienic conditions, Totally Green currently is available in four nicotine strengths (0mg, 6mg, 12mg, and 18mg) and 48 different flavors, the most popular ones being M Tobacco, Cowboy Blend, Blackberry, Arctic Menthol, and Toffee Cream.

Packaging Can Be Innovative, Too

Flavors aside, the Croatian company also shows particular innovation strength in the area of packaging. For instance, Elda had some time ago pioneered a quite revolutionary format that veered away from the usual glass or plastic vials and tubes most e-liquid manufacturers still rely on. Branded Elda2GO, the product is basically a small, multilayered, and coated pouch containing 2ml of e-liquid. One of the ideas leading to its development was that many consumers prefer to switch flavors between vaping sessions for variety’s sake. Instead of having to purchase larger vials or even keeping multiple vaporizer tanks around, they can now simply resort to the Elda2GO pouches, as 2ml is typically enough for one session. As more than 80% of Elda’s total business is derived from OEM customers, the pouches can also serve as product samples that they can utilize for their own brands.

“Some of our industry clients have even started using the 2GO pouches as eye-catching business cards, asking us to print them with their company logos and contact details,” remarks Marenic. The latest ingenious packaging novelty brought to life by Elda is its Premium DIY Nico Shot line. As the name suggests, it allows consumers to literally make their own e-liquid anywhere and anytime. The prepackaged sets come in either a 60ml or a 120ml bottle prefilled with nicotine-free vaping base plus what the company has termed “nico shots”, 10ml bottles with an 18mg nicotine solution. Mixing nico shots into the base, users can instantly produce an e-liquid ready for vaping that contains a nicotine concentration of either 3mg or 6mg as per their personal preference.

“Competition Makes Us Even Better”

Asked whether he might be concerned that some firms will eventually copy (or should we say pirate?), Marenic says that it has already happened. “There are some companies that have started producing products that emulate ours, but it is not a problem for us. It is just a confirmation that our products are interesting. Besides, competition makes us only even more productive and innovative.”

Elda has always looked outward, with the main goal from the beginning being to do business in foreign markets. The company claims that currently a staggering 65% of its sales are in the European market. “The Netherlands, Germany, Austria, the UK, Denmark, and Belgium are the most important EU countries for us as they have the largest ratio of ENDS users,” explains Marenic. In Asia, Elda considers China and Japan as its two key markets. “We’ve already been exhibiting at two vape shows this year - one in Shenzhen, the other in Osaka – and made many valuable business contacts,” says Marenic. “While currently only 15% of our sales go to Asia, we are confident that these two exhibitions will increase our share in the region.”

Innovation is Key in E-Liquid Marketing

Courtesy of Elda Ltd.

Innovation is Key in E-Liquid Marketing

Elda’s Premium line

AIternative Ingredients: Mother Murphy’s Prodigy

It is quite some distance from idyllic Croatia to the US state of North Carolina, where Mother Murphy’s Laboratories Inc. is located in the town of Greensboro. The Mother Murphy’s brand has for many years been a household name when it comes to high-quality flavoring aromas and essences for home cooking and the commercial food industry. And when vaping also took hold in North America, Mother Murphy’s in 2012 decided to bring its long-standing expertise to the ENDS industry as well. Since initial customer response reportedly was exceptional, two years later the company founded a dedicated subsidiary, Alternative Ingredients Inc., known among industry insiders simply as AI.

Highest Standards to Serve B2B

“We maintain our own production facilities including a clean room operating under ISO7 standard, as well as a testing lab to check our merchandise for important parameters such as specific gravity, refractive index, flash point, nicotine content, pH, and sensory evaluation,” explains AI’s director of international sales, Eduardo Berea. “Being a subsidiary of an almost legendary flavor house, AI from the beginning wanted to primarily serve customers in the B2B space - and not to compete with them. That is where our expertise and strengths are,” he adds. As such, individual vaping fans will unsuccessfully search retail shops for AI branded e-liquids, as they simply do not exist.

More than 400 Flavors – and Growing

Instead, the company displays its extraordinary innovative touch when developing new, exciting flavors for its B2B clients. “We collaborate very closely with them in creating the flavor profiles, solvent mixes, and nicotine levels they envision.” These joint efforts – AI’s creation expertise and the clients’ market knowledge -  have since 2014 led to more than 400 different e-flavors. While Berea is bound by confidentiality agreements and cannot divulge exact details on the composition of these flavor mixes, he says that innovation largely hinges on the sensory characteristics the product is to display, the marketing (i.e. how the product is presented to consumers), and in what type of ENDS system it is to eventually be used (closed, preloaded, or open). “Thinking of the product itself, the most important aspect is that it must match the respective brand image and that it fits the delivery method. We at AI need to keep in mind that we are creating sensations in every aspect of the meaning of the word and that these sensations not only encompass a truly unique formula in the liquid itself but also product design, image, and presentation.”

What Makes a Flavor Flavorsome?

“Flavor” is, of course, a rather subjective term. What may be embraced by users in Europe, consumers in other parts of the world may find objectionable. “Flavor preferences are definitely dictated by the regions and even individual countries in which they are to be marketed,” says Berea. “A peanut butter-flavored product might delight users in the US, but it might not be very attractive in Asia. A mango flavor in the Asia-Pacific region, where people are familiar with many different varieties of the fruit, ought to be completely different from a mango flavor in the EU or North America, where typically only one or two fruit varieties are available in stores. Another example would be a crème brûlée flavor that would have to be formulated differently in its home country France than what it would taste like in the US,” elaborates Berea.

The speed at which new flavor variants are nowadays appearing in the market has slowed down considerably compared to the frantic heydays in the early 2010s. But Berea says that at the moment complex fruit cocktail flavors, dessert type aroma profiles and ambiguous conceptual flavors that “simply taste nice and pleasant” are rather popular in the various markets. And considering that a large ratio of ENDS users are former conventional smokers, “traditional” flavors remain somewhat of a benchmark in most countries. “Many ex-smokers continue enjoying that familiar ‘real’ tobacco or cigarette taste during their vaping sessions.”

Preemptive Strike

On the legislative side, regulations about what ingredients are permitted are steadily getting more and more stringent, if not to say restrictive. It has today become very much a balancing act for companies to not clash with the law, especially when they are active in several countries across different continents. A flavoring substance that still may be allowed in one country may already have been indexed in another. Some of these ingredients are prohibited for good reason (as they may be potentially harmful to consumers’ health), yet with others, the justification for banning may seem less clear and occasionally even appear quite arbitrary.

But showing admirable professional foresight, in 2014 AI already set up its own “negative list of ingredients”, which includes more than 40 raw materials that the company voluntarily decided to stop using in its products based on their potential toxicological risks. According to Berea, many of these ingredients have already been banned in various EU countries and also in the US, the most obvious ones being diacetyl and acetoin. “But in our list, we also have included substances like acetic acid and furfural, both of which have a relatively high vapor pressure at room temperature and low permissible exposure limits,” Berea remarks.