Mommy, Where Does E-Liquid Come From?
Mommy, Where does E-Liquid come from?
Is something you’ll probably never here, but makes for a good article nonetheless, as people seem to have pretty wild and varying ideas on the subject. Most people assume the big brands have big labs and the small companies have small labs or no labs at all. I frequently wander into Facebook threads that argue the merits of the word “premium”, arguing that there are certain manufacturing standards that warrant the title and others that don’t. Part of this debate is amusing, but the other part illustrates a pretty valid point in our industry today – that there is a bit of a veil that exists between what you see on the shelf and how it got there. This isn’t necessary a bad thing or even an uncommon thing. Most industries evolve into complex supply chains and ours is no different. But to help the casual vaper out I thought it would be worth it to take a look at how that bottle ended up in your hands:
It all starts with the flavour companies who produce the concentrated flavours that are in every e-liquid that you know and love. Most of these companies are medium to large sized businesses that started off in food flavouring and inadvertently caught the vaping wave. Some of these companies, like Flavour Art and a handful of others have seized on the opportunity and started gearing flavours and processes towards the vapor market while others are still passively taking the business that comes to them without really investing in the industry. What’s interesting about this is that these guys are really the driving force behind the flavour trends we see in finished e-liquids. When a new base flavour hits the market, you’ll quickly see hundreds of e-liquids coming out to try and capture that new opportunity. Yogurts, Cereals, Donuts…all started with flavour companies putting out a new base flavour. The moral of the story is if you want to know what’s coming out 60 or 90 days from now in the vape industry, get on the mailing list of the flavour companies.
This used to be synonymous with the brand owner with the assumption being that if you owned the brand you made the liquid. That’s not really the case anymore, and for a variety of different reasons. My company, Vape Brands International, operates in this space as well as a distributor and brand owner. It comes down to economics basically. Instead of each brand investing in an ISO clean room, equipment and staff, it became cheaper to outsource this type of work to companies that could provide a finished product faster and cheaper thanks to the sheer scale at which they operate. In the US, there are some very large contract manufacturers that make most of the big brands you see on the market today. For example, brands like Cuttwood, Mr. Good Vape, Frisco and Von Vape all come from the same manufacturer. By allowing a manufacturer to handle this part of the process, the brand is free to do what they do best and market the product. This also allows for international distribution to take place more seamlessly, as the cost of shipping VG is actually higher than the VG itself. My company does this for a lot of US and European brands in Canada. Rather than shipping finished product to us, we manufacture the product locally to the brands specifications. This greatly increases a brand’s reach while also simplifying their supply chain. Recently we also moved into Private Label Manufacturing, meaning we’re now creating brands from the ground up for individuals, stores and aspiring e-liquid companies. To be honest, if these services existed in 2013 when I started Moshi E-Liquids, I probably would have made it to market 9-12 months quicker than I did and the impact of that is huge.
Distributors handle the messy business of getting a finished product onto the shelves of your local B&M. The expertise here is in sales and account management, which is no easy task in a marketplace that has over 4000 competing brands. Distributors provide a ton of value to both stores and brands. For stores, it’s the benefit of curation and a centralized order process. Most stores carry hundreds, if not thousands of SKU’s and trying to place orders with each company individually is not feasible. Good distributors provide the added benefit of actually vetting products making the selection process easier for stores. We do this as well in Canada, having created a portal for stores to purchase all the brands that we manufacture. We also provide the sales and account management services that allow for an easy entry to the market. For brands, the big benefit is not having to find stores to sell to. The cost of acquiring a new customer is often bigger than a start up brand has anticipated and they can quickly find themselves struggling to find space in the market without a plan for this.
Lastly, we have the brand itself. In the old days (like, 2 years ago) the brand would have been responsible for 3 of 4 processes in this post, but now its really about the concept and flavour design. In fact, even these can be outsourced now quite easily, but lets just assume that’s what the brand does today. A well thought out brand, with the right number and types of flavours and a great marketing package will still separate itself from the pack. It is getting harder though. One of the big downsides (or upsides, depending on your point of view) of this supply chain expansion is the ease at which a brand can be created and brought to market. I remember when I started Moshi having to make calls to China sourcing bottles at midnight eastern time, then waking up to go into the lab to work on flavours and spend my afternoon making sales calls. Now, if you have a basic idea of what you want to do, you can come to a company like mine and the rest of the project is taken care of.
- Beju Lakhani