But is it too late?
Juul “developed a durable brand identity and style,” says Dr. Robert Jackler, a tobacco-marketing. The latter was set to be an in the North Carolina trial before the settlement. “No matter what Juul has done—and it’s done many things in the face of withering regulatory attention and public scrutiny,” he says, “it is too tarnished of a brand” to return from that.
Juul was conceived as a cigarette alternative for adult smokers. E-cigarettes deliver nicotine but are generally considered less dangerous than traditional cigarettes, making them a potentially helpful tool for adultssmoking. But by the time Juul took off, around 2017, it was popular with another demographic: teenagers. By 2019, 27.5% of U.S. high had vaped in the last 30 days. Many experts blamed Juul for its sleek, techy devices and appealing flavors like mango.
Stein—and many others—have argued that the company’s marketing targeted teenagers, an allegation Juul has repeatedly denied. Among other claims, Stein’s complaint noted that Juul launched in 2015 with a bright, colorful ad. He also argued that Juul downplayed the amount of nicotine in its pods, causing some consumers to become addicted accidentally.
Juul’s business has been more restrained inafter vocal criticism from lawmakers, regulators, and health groups. From 2018 to 2019, it discontinued popular flavors like mango and mint, shut down its U.S. pages, and halted most advertising. It also implemented new age-verification practices and, in 2020, moved its headquarters from to Washington, D.C., in an apparent effort to leave behind the “move fast and break things” culture of . Juul’s corporate website now looks “like an AARP website,” plastered with images of older customers, says Chris Alfieri, founder of the New York City-based public relations firm Mulberry & Astor, who previously worked with the anti-smoking Truth Initiative.
While Juul still reportedly controls about half of the e-cigarette market, the tobacco$12.8 billion for a 35% stake in Juul—has slashed the valuation of its stake to around $1.5 billion. The Federal Trade Commission law and is trying to unwind it. The North Carolina settlement codifies some policies Juul adopted voluntarily under pressure from regulators, like not or near schools.
The $40 million will help fund vaping cessation and prevention programs and e-cigarette-focused research. Under the agreement, Juul did not admit any wrongdoing—Juul is also forbidden from marketing to anyone in the state younger than 21, in keeping with recent legislation that raised the minimum age of tobacco purchase from 18 to 21. It can onlyits products behind the counter at North Carolina retailers that ID-scan shoppers and will pay secret shoppers to test these practices.
That’s a bargain for a successful company like Juul, Allieri argues. “This wasn’t a come across as a responsible company, Alfieri says. Juul was “operating very egregiously in terms of their marketing tactics,” he says. Still, it’s also paying for “the track record and mistakes and business practices of tobacco companies over the years.”for them,” Alfieri says. “This is all part of the business. Now they think they can turn the page with this” by appearing to take responsibility for their actions. Whether they actually can is another story. Juul’s early marketing missteps, popularity among teenagers, and relationship with Big Tobacco could make it difficult to ever
Traditional tobacco companies were harshly criticized for marketing to. In a 1990s settlement known as the Master Settlement Agreement, the country’s largest tobacco companies agreed to pay billions of dollars to U.S. states after downplaying cigarettes’ health risks and addictive properties. to stop marketing to teenagers. As of 2020, fewer than 5% of U.S. high school said they regularly smoked cigarettes, compared to 28.5% in 1999, the year after the Master Settlement Agreement.
There are echoes of that deal in Juul’s settlement, which could be the first of many. States including Massachusetts, New York, California, and Hawaii have also sued Juul, and a group of 39 statethe company’s marketing practices in 2020. Hundreds of complaints from customers and have also been consolidated before a judge in California; trials are set to begin in 2022.
But Juul’s most significant test may happen outside the courtroom. The U.S. Food and Drug Administration is reviewing applications that Juul and other e-cigarette makers filed to stay on the market, and decisions are expected by September. If Juul cannot prove that it provides a net benefit to public health—that its benefits for adult smokers outweigh issues like teen addiction and recreational use—it could be removed from the U.S. market entirely.
Then, of course, there’s the test of public opinion. The company’s revenue fell dramatically in 2020, fueled by public scrutiny, the discontinuation of flavored products, the, and the aftermath of a dramatic vaping-related lung disease outbreak (which was ultimately linked to THC, not nicotine, products). The third quarter of 2020 stood at around $360 million, compared to $745 million in the second quarter of 2019. Generally, Alfieri says, consumers are “quick to outrage and quick to forget.” But when asked to think of another company that has pulled off an image rehabilitation of the scale Juul is attempting, Alfieri says none immediately come to mind.