MONTVILLE COMPANY WANTS TO TRANSFORM E-CIGARETTE INDUSTRY
Sensory Solution, working out of a manufacturing facility in a Pine Brook office park, plans to start up its state-of-the-art formulation and bottling equipment on Monday . When they get up to full speed, company founder-president Marc Brucker says it will fill, seal and label up to 180,000 bottles of custom-formulated and branded e-Liquid — used to produce vapors instead of smoke — for its business-to-business customers.
“By the world’s term, we are still a small business,” he said. “And when a small company has the opportunity to play in Big Tobacco’s sandbox, that’s very interesting to me.”
Brucker, who describes himself as a “serial entrepreneur,” built a career first as a bulk-food seller and later in the nutritional supplement business as a supplier of more than 200 bulk raw materials to manufacturers in that lucrative industry.
“I was the largest supplier of chondroitin sulfate and glucosamine in the United States,” Brucker said. “We happened to catch the market at the right time.”
He sold that business in 2004, and transitioned into the e-cigarette market about 28 months ago.
“Because of my background in nutrition, a fellow walked in who is actually now a principal in this company,” Brucker said. “He introduced me to e-Liquids. We spent a number of months, probably the better part of a year doing due diligence on the industry. We really weren’t sure where our value proposition was.”
What he did see, however, was the potential to adapt his experience to the e-cigarette market, estimated to generate revenues of between $2 billion and $2.5 billion annually, and growing at a rate of about 20 percent a year, according to industry analysts.
“What I saw was very disruptive technology,” Brucker said. “The marketplace was very immature. It was a cottage industry, almost an exact parallel to the nutrition business in 1994. Even from standard testing methodologies to regulation to compliance, manufacturing environments, the lack of GMP (good manufacturing practices) that once existed in the nutrition business still existed here.”
While e-cigarettes have existed for decades, a new design of smoking devices has helped the industry build impressive growth over the past dozen years. Initially, smaller companies dominated the market, selling their wares online, via mail order and in boutique shops before the convenience store industry embraced it a few years ago.
Now, even the major tobacco manufacturers are aggressively entering the market, noting the growth of e-cigarettes while the conventional cigarette market erodes.
Sensory Solution, however, does not sell e-cigarette or e-Liquid products to the retail market. They either sell the raw materials — including liquid nicotine, the active ingredient in tobacco products — to other manufacturers, or contract with companies that want Sensory Solution to formulate, mix, bottle and package e-Liquid products they sell under their own brand names.
Brucker would not identify his customers, but said he’s got “a lot in the queue,” enough to quickly put his expected capacity of 180,000 bottles of e-Liquid a day to the test.
He’s also hoping that pending regulatory guidelines expected in June from the U.S. Food and Drug Administration are eagerly anticipated by the more reputable producers in the industry.
“That is really important, because for this industry to have sustainability and a long-term future, and for the people to get the benefit of having an alternative to smoking combustible cigarettes, it’s very important that they level the playing field so everybody is getting efficacious materials that are built to a specification,” he said. “And right now, there are a lot of brands that are doing a wonderful job — this business is being built on entrepreneurs — so you’ve got a lot of creative guys in this space who have done a wonderful job in implementing and building brands an down-line distribution.”
What they are missing, he believes, is the expertise he brings to the table with respect to good-manufacturing practices, just as he did in the nutrition business 20 years ago.
Brucker, though, is not merely relying on past success. He is working with longtime collaborator and Sensory Solution Chief Operating Officer William Lederman to improve the technology required to mass-produce the e-Liquid products, which come in a variety of flavors, and with different concentrations of the nicotine most customers want to “vape” through their e-smoking devices.
Under Lederman’s guidance, the company has built custom equipment — housed in clean rooms — where the formulas can be precisely mixed in bulk, then dispensed into small bottles for sale. Next to the mixing and bottling rooms in the 20,000-square-foot facility (which also includes a warehouse) is a research lab where new formulas can be developed and tested for quality control.
Brucker would not put a figure on his investment.
“More than I want to say,” he said.
But he’s eager to improve the industry and help win over the critics of e-cigarettes, most of whom point to the continued inclusion of highly-addictive nicotine to most formulas.
Winning over the critics
Some industry analysts believe the FDA might want to ban sales on a national level to people age 18 and younger.
“To date, FDA has not been able to fully assess the public health impacts of unregulated tobacco products,” the FDA told CBS News in a statement. “For example, some testing of e-cigarette cartridges has revealed significant variability in nicotine content and the presence of chemical constituents that raise concerns of toxicity.”
Forty-one states already have banned the sale of e-cigarettes, to people under 18. The New Jersey Legislature in 2010 passed the first state law regulating the use of e-cigarettes, banning use in 100 percent smoke-free venues, and limits use to people age 19 and older.
Brucker stresses the industry cannot make specific claims about e-cigarettes as a smoking-cessation device, but notes that nicotine patches and gum use similar product and follow a similar path to the goal of weaning smokers from their habit.
A 2014 study by British researchers, published in the journal Addiction, found that people trying to quit smoking were about 60 percent more likely to succeed if they used e-cigarettes compared to those who tried an anti-smoking nicotine patch or gum.
But another 2014 study published in JAMA Internal Medicine found that e-cigarettes do not help people curb or quit smoking.
Brucker says his company’s good-manufacturing practices and quality control will help improve the industry as it stands today.
“We weren’t interested in coming in just for a money-making opportunity,” he said. “We came in to try and set the standard, and work with industry leaders so we can actually propel the industry and preserve it.”
The company also hopes to revolutionize the industry with its new “CleanVape” technology, which he says will help mitigate the inherent lamination — known as “vape tongue” — experienced by e-cigarette users.