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Marlboro maker Altria Group Inc said on Thursday e-cigarette maker Juul Labs Inc posted more than $1 billion in revenue in 2018, up from about $200 million a year earlier, the first official growth figures for the controversial vaping product.
Altria paid $12.8 billion to acquire a 35 percent stake in Juul in December 2018, getting a foothold in a segment that is quickly becoming an attractive alternative for smokers.
The cigarette maker risks cannibalizing some of its current customers but sees e-cigarettes as a path to growth.
E-cigarettes are a divisive topic in the public health community, offering a nicotine alternative to cigarettes without the same toxic and cancer-causing chemicals, but they have also become popular with teens, drawn to candy and dessert flavor varieties.
In November, the U.S. Food and Drug Administration announced curbs on sales of flavored e-cigarette products, including Juul’s mango and cool cucumber, responding to concerns of underage use reaching epidemic proportion.
After the regulatory crackdown, Juul halted all promotional use of U.S. social media platforms and continued to monitor and remove inappropriate material from third-party accounts.
“We know more must be done,” Altria Chief Executive Officer Howard Willard said on a post-earnings call.
Altria said removing some flavors would impact the overall growth rate of Juul this year.
Juul’s refill kit pod volumes grew nearly 600 percent in 2018 and also expects U.S. e-vapor volume to grow at a compounded annual rate of 15 percent to 20 percent through 2023, the company said.
Altria’s shares were up 1.5 percent at $48.56 as the company also posted fourth-quarter profit that matched analysts expectations.