On a muggy night in March 2017, the stillness of the evening was broken by the sound of a hatchback reversing rapidly into the trellised security gate of a little-known store on Dominion Rd. The metal twisted on the first attempt, but it wasn't enough to give a pair of masked men entry to and access to the spoils hidden in the stockroom. They climbed back into the car and gave it another attempt. This time the latches holding the gate in place gave in and the pair were able to sneak underneath and get their hands on more than $5000 worth of merchandise.

This happened during a spate of ramraids, with criminals mostly targeting stores known to carry cigarettes. As tobacco prices rose, opportunists saw an easy way to make a quick buck off a valuable product that didn't take up too much space. But this wasn't the target in this instance. Instead, these perps were after the very thing vying to challenge tobacco's monopoly on recreationally puffing clouds of smoke.

The store ram-raided was the first Vapo outlet opened by Ben Pryor and Jonathan Devery, a pair of entrepreneurs who saw early that vaping was on the cusp of becoming big business in New Zealand.

While that initial ram-raid hit the pair in the pocket, it had the corollary effect of also giving them a level of media attention rarely afforded to start-up businesses. The CCTV footage of the audacious heist quickly made its way onto mainstream news channels, catapulting vaping – and the name Vapo – into the national consciousness. It was the type of event that gives credence to the notion that there's no such thing as bad press.

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Following the international vape trail, the small business has grown quickly and today employs 70 staff across eight retail stores, a factory and lab in Penrose, and a large distribution centre in Mount Wellington.

Speaking with a calm confidence that conceals the fact he still in his mid-30s, Devery says the spread of retail stores could have been far greater at this stage.

"We could have twice as many shops as we do now if we wanted," he says.

"It was about making sure we had the right spot, in the place, on the right street to ensure it suited our business model."

That model, he says, is about building a premium business that isn't viewed with the stigma that often sees vaping stores relegated to less desirable retail sites, hidden in broad daylight along obscure streets.

"The big clouds are a turn-off for members of the public and even some retailers," says Devery.

"It has been important to provide some information to make the point that it's not just about this subculture in vaping."

Devery says a major coup for the company came in entering Westfield mall in that it gave the company an added halo of credibility to be situated alongside the country's big retail brands.

"Obviously, you pay a premium to go into Westfield or Kiwi Property, but it all ties in with making people feel more comfortable with our products," he says.

Off the back of steadily building the company's reputation, Devery has also managed to secure distribution deals, which now see Vapo's range of Alt products stocked at Progressive, Foodstuffs, BP, Z Energy and Mobil.

Devery says he would like to see Vapo double its store count by March 2020, but only if he can continue to secure premium sites.

"We're negotiating with a few big mall retail companies at the moment," he says.

Vape wars

But not everyone is a fan of the fad, which now sees an estimated 200,000 New Zealanders puffing plumes of flavoured smoke in public areas.

Earlier this year, Hamilton and Porirua City took the regulatory step of expanding its smoke-free public policy to include a ban of vaping and e-cigarettes.

The city councils see this as part of their efforts to support the goal of achieving a smoke-free New Zealand, but Devery says the conflation of his products with tobacco smoking is a mistake that overlooks the role vaping can play in weaning Kiwis off cigarettes.

"Vaping is really about stepping away from smoking," says the ex-smoker, who has had first-hand experience with the struggle of putting down a pack of 20.

This narrative has become central to Vapo's brand and has featured heavily in its advertising over the last year. However, it has already landed the company in hot water, with the Advertising Standards Authority upholding a complaint against Vapo subsidiary Alt for making therapeutic claims in a TV ad.

While the ads were pulled from TV, the ASA did make an important point in noting the advertising of e-cigarettes and vaping was legal and that the rules applicable to tobacco did not apply.

Devery welcomes this kind of delineation, stressing that while nicotine in vaping is addictive, it's not carcinogenic and cannot be fairly equated to cigarettes.

This stance is also being adopted by the Government, which confirmed earlier this month that it would launch a public service campaign later this year encouraging smokers to switch to vaping.

The move is further being supported by regulatory changes, which will see the Smoke-free Environments Act amended this year to better address the vaping industry.

Associate Health Minister Jenny Salesa has spoken openly about the benefits of vaping, albeit with a few caveats.

"Vaping is a significantly less harmful alternative to smoking and it has been used as an effective tool to quit smoking," Salesa said when announcing the proposed legislative changes last year.

"However, it is not completely risk-free and that's why we need to make it as safe as possible and protect young people from taking it up. Vaping is also cheaper and this is important because people on low incomes have some of the highest smoking rates."

An estimated 200,000 New Zealanders puff plumes of flavoured smoke in public areas. Photo / File
An estimated 200,000 New Zealanders puff plumes of flavoured smoke in public areas. Photo / File

The proposed legislative changes will, however, bring vaping in line with tobacco products in the sense that use will be banned from bars, restaurants and workplaces – as is already done with cigarettes.

Devery isn't intimidated by impending introduction of regulation of the vaping industry, saying it will give the industry a clear set of rules.

"We want to know what we can and cannot do, what we can and cannot say. There needs to be some clarity around that," he says.

He also says it would help to eliminate some of the more unscrupulous players, who are only interested in making a quick buck before the regulations tighten.

In an article written for The Conversation last year, Dr Tanusree Jain, the founder of research firm CSRintel, also stressed the importance of regulation to better control what goes into the e-liquids used in vaping. A lack of control means that less scrupulous operators often cut costs in developing liquids, raising questions of what impact these might have on the long-term health on users. Adjusting laws to compel the disclosure of ingredients, health warnings and country of origin would allow consumers to make more informed decisions when purchasing vaping products.

Are the kids alright?

The loudest anti-vape voices often air concerns that the industry is playing a major role in getting an entirely new generation of young people addicted to nicotine. The argument goes that the combination of cool factor trumpeted in slick – often online – marketing and the fruity flavours sold at retail outlets are dangerously effective at pulling in younger consumers, who would have otherwise avoided cigarettes. This has led to calls to restrict vaping flavours, ban marketing and control how and where the products are sold.

"I understand the concerns," says Devery. "I don't want my young cousins getting their hands on vaping products either."

And the responsibility to ensure this doesn't happen rests with the organisations selling the product, says Devery.

"From what we've seen, they're taking a hardline approach in protecting against sales to youth," he says, pointing out that supermarkets, for instance, don't put vaping products in full view.

Asked whether he thinks it might be better for younger consumers if vaping products were removed from supermarkets altogether, Devery says this would create a double standard.

"If we're comfortable and confident in our ability to police alcohol sales, there's no reason why we can't take the same positive approach in the way we police these products," he says.

The production of vaping products at Alt. New Zealand Limited. Photo / File
The production of vaping products at Alt. New Zealand Limited. Photo / File

That said, he's also a realist, admitting that youth will always find ways of getting access to products that have an age rating – whether that's alcohol or tobacco. Some of the onus in ensuring this doesn't happen certainly does lie with the parents, but companies also have to make sure that they aren't actively pursuing customers on the younger side.

The problem is that the vaping industry hasn't always kept its hands clean when it comes to advertising to younger consumers. Earlier this year, vaping brand Vype – owned by British American Tobacco – faced criticism for using musician and medical student Annabel Liddell in an Instagram advertising campaign. The 24-year-old subsequently removed the posts, but some saw it as an example of how modern communications channels can be used to appeal to younger consumers.

Devery says that from the outset, he and Pryor made the decision not to market their products in ways that could appeal to youth.

"We don't need young people to use our products," he says. "We've got a great business model that works well selling our products to smokers. We've got a very sustainable business doing it."

Vapo does, however, sell a wide variety of flavours – which have also been at the centre of the debate about the appeal of vaping products to teenagers. But Devery doesn't think these should be banned, arguing that flavours play a major role in encouraging smokers to quit. Part of the reason smokers turn to vaping in the first place, he explains, is to replace the powerful tobacco odour with something that smells a bit better.

"Any talk about banning advertising and banning flavours won't help smokers to quit," he says.

The sleeping giant awakes

Impending regulation isn't the only existential threat to the Vapo business model. There's also the growing prominence of Big Tobacco, which is starting to invest heavily in what it sees as a future growth area.

"In recent months they've really been driving their vaping products hard, and even claiming to be supporters of Smoke-Free 2025, which is ironic in the least," says Devery.

Earlier this year, Philip Morris, the company which produces Marlboro cigarettes, launched a seemingly incongruent campaign called "The Year of Unsmoke", which is designed to get more smokers to put down their cigarettes by 2025.

While the move has been called a PR stunt, the underlying ambition for the company is to "ultimately replace cigarettes with smoke-free products". Philip Morris has already invested heavily in the electronic devices and clearly sees this space as part of its long-term business strategy.

Devery (left) says he would like to see Vapo double its store count by March 2020. Photo / File
Devery (left) says he would like to see Vapo double its store count by March 2020. Photo / File

Devery notes that the big tobacco companies have been really effective at separating their highly stigmatised names from the vaping products they sell.

"We know that people have people have bought products from a tobacco company not knowing that it was a tobacco company and feeling quite frustrated about it," he says.

"I think any consumer would appreciate knowing who they're actually purchasing their products from."

The tobacco companies have long been masters of branding and they'll continue to do what they can to ensure that their products fly off the shelves – and, in this case, that necessitates a bit of distance from the dire perception associated with the cigarette industry.

Vapo's first challenge may have come from a pair of masked men in the middle of the night. But this time the company knows exactly who its main threat is. The question now is whether Devery and his team will be able to continue resisting the onslaught in the coming years.

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