juul labs

Juul launches a pilot program that tracks how Juul devices get in the hands of minors

Posted by | Gadgets, Government, Health, juul, juul labs, Startups, TC | No Comments

Juul Labs is today launching a pilot for its new Track & Trace program, which is meant to use data to identify exactly how Juul devices wind up in the hands of minors.

Juul vaporizers all have a serial number down at the bottom, by the Juul logo. However, it wasn’t until recently that Juul had the capability to track those serial numbers through every step of the process, from manufacture to distribution to retail to sale.

With Track & Trace, Juul is calling upon parents, teachers and law enforcement officials to come to the Juul Report web portal when they confiscate a device from a minor and input the serial number. Each time a device is input in the Track & Trace system, Juul will open an investigation to understand how that minor wound up with that device.

In some cases, it may be an issue with a certain retail store knowingly selling to minors. In others, it may be a case of social sourcing, where someone over 21 years of age buys several devices and pods to then sell to minors.

Juul will then take next steps in investigating, such as talking to a store manager about the issue. It may also enhance its secret shopper program around a certain store or distributor where it sees there may be a spike in sale/distribution, to youth to identify the source of the problem. To be clear, Track & Trace only tracks and traces the devices themselves, and does not use personal data about customers.

Juul isn’t yet widely publicizing Track & Trace (thus, the “Pilot” status), but it is focusing on Houston as a testing ground with banner ads targeted at older individuals (parents, teachers, etc.) pointing them to the portal. Of note: The ad campaign is geofenced to never be shown in or around a school, hopefully keeping the program a secret from young people illegally using Juul.

The company wants to learn more about how people use the portal and test the program in action before widening the campaign around Track & Trace. That said, the Report portal is not limited to Houston residents — anyone who confiscates a Juul can report it through the portal and trigger an investigation.

“It’s important to note that the pilot is an opportunity for us to learn how the technology is working and optimize the technology,” said Chief Administrative Officer Ashley Gould. “It’s not just at the retailer level. It’s a whole process through the supply chain to track that device and find out if everyone who is supposed to be scanning it is scanning it, and the software that we’ve created to track that serial number through the supply chain to the retail store is working. The only way we’re going to know that is when someone puts in the serial number and we see if we have all the data we need to track it.”

According to Juul, every device in production will be trackable in the next few weeks. In other words, Juul vapes that are years old are likely not fully traceable in the program, but those purchased more recently should work with the system.

Juul has been under scrutiny from the FDA and a collection of Democratic Senators due to the device’s rise in popularity among young people. Outgoing FDA Commissioner Scott Gottlieb has called it “an epidemic” and enforced further restrictions on sales of e-cig products.

Juul has also made its own effort, removing non-tobacco and non-menthol flavored pods from all physical retail stores, enhancing their own purchasing system online to ensure online buyers are 21+ and not buying in bulk, going after counterfeits and copycats posing as Juul products and exiting its Facebook and Instagram accounts.

But Juul Labs also committed to build technology-based solutions to prevent youth use of the product. Co-founder and CPO James Monsees told TechCrunch at Disrupt SF that the company is working on Bluetooth products that would essentially make the Juul device as smart as an iPhone or Android device, which could certainly help lock out folks under 21.

However, the Track & Trace program is the first real technological step taken by the e-cig company. And it has been an expensive one. The company has spent more than $30 million to update its packaging, adjust printing standards, change manufacturing equipment and integrate the data and logistics software systems.

For now, Track & Trace is only applicable to Juul vaporizers, but it wouldn’t be shocking to learn that the company was working on a similar program for its Juul Pods.

Editor’s Note: This article mistakenly said that Republican senators were scrutinizing Juul. It has been edited for accuracy.

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Democratic senators question Juul about its Altria deal

Posted by | altria group, ecigarettes, Gadgets, Government, Health, juul labs, Startups, TC | No Comments

Eleven democratic senators, led by Sen. Dick Durbin (D-IL), have penned a letter to Juul Labs, asking a series of questions around the product’s marketing, its effectiveness as a tool to help people quit smoking combustible cigarettes, sales figures and, perhaps most importantly, more information on the deal that gave Altria a minority stake in Juul Labs.

“The corporate marriage between two companies that have been the most prolific at marketing highly addictive nicotine products to children is alarming from a public health standpoint and demonstrates, yet again, that JUUL is more interested in padding its profit margins than protecting our nation’s children,” writes Sen. Durbin in the letter.

Questions in the letter include records around advertising and marketing spend for Juul products, as well as any changes that might have been made to Juul’s Youth Prevention Plan following the deal with Altria.

In late 2018, Juul announced it had sold a 35 percent minority stake of the company to Altria Group, makers of Marlboro cigarettes, for $12.8 billion. The company said that a partnership with Altria would help Juul market and distribute to currently addicted adult cigarette smokers.

In the letter, the senators cite the American Heart Association, which called the Altria/Juul deal “a match made in tobacco heaven.” Juul was already in hot water over its product’s popularity among young people, so it’s only expected that a partnership with traditional Big Tobacco would further fuel concerns among critics.

More from the letter:

JUUL’s decision to team up with Altria, the parent company of Philip Morris USA, is also bad news for children considering that Altria has a long and sordid history of spending billions to entice children to smoke through targeted campaigns that intentionally lied about the science and health effects from cigarettes. And their efforts have clearly paid off. According to the CDC, Altria’s Marlboro cigarette continues to be the most popular cigarette brand among children in the United States, with 48.8 percent of high school smokers preferring Marlboro cigarettes. Further, the proportion of high school smokers who smoked Marlboro cigarettes increased dramatically between 2012 and 2016, by a whopping 27 percent. While JUUL has promised to address youth vaping through its modest voluntary efforts, by accepting $12.8 billion from Altria—a tobacco giant with such a disturbing record of deceptive marketing to hook children onto cigarettes—JUUL has lost what little remaining credibility the company had when it claimed to care about the public health.

A Juul Labs spokesperson had this to say in response to the letter:

We welcome the opportunity to share information regarding JUUL Labs’ commitment to curbing underage use of our products while fulfilling our mission to eliminate combustible cigarettes, the number one cause of preventable death in our country. We agree that companies such as ours must step up with meaningful measures to limit access and appeal of vapor products to young people. That’s exactly what we’ve done, and we will do more to combat teen use to save the harm-reduction opportunity for the 34 million adult smokers in the United States. Don’t take our word for it — look at our actions. As part of our action plan deployed in November 2018 to keep JUUL products out of the hands of youth, we stopped the sale of certain flavored JUULpods to traditional retail stores, strengthened our retail compliance and secret shopper program, enhanced our online age-verification, exited our Facebook and Instagram accounts and are continuously working to remove inappropriate third-party social media content. We support the FDA’s draft guidance restricting the sale of certain flavored products, including JUULpods, at retail outlets and online, and will continue to work with FDA, Congress, state Attorneys General, local municipalities, and community organizations as a transparent and responsible partner in combating underage use.

U.S. Senators Patty Murray (D-WA), Ron Wyden (D-OR), Sherrod Brown (D-OH), Richard Blumenthal (D-CT), Jack Reed (D-RI), Elizabeth Warren (D-MA), Tom Udall (D-NM), Ed Markey (D-MA), Jeff Merkley (D-OR) and Chris Van Hollen (D-MD) joined Sen. Durbin in sending the letter. It comes just a month after the FDA proposed further regulations to the sale of flavored e-cig products.

Juul has until April 25 to provide answers and information in response to the letter.

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Juul Labs hires former Apple employee to lead the fight against counterfeits

Posted by | adrian punderson, altria group, Gadgets, Health, juul, juul labs, Personnel, Startups, TC | No Comments

Juul Labs, the e-cig company under fire for its product’s popularity with young people, has brought on a new VP of Intellectual Property Protection with Adrian Punderson, formerly of PwC and Apple.

Punderson’s job is all about working alongside government agencies, as well as Juul Labs Intellectual Property VP Wayne Sobon, to combat the sale of counterfeit and infringing products. These can range from copycat vapes and pods that are actually marketed as Juul products all the way to products that are designed specifically to be Juul compatible without using the trademark.

These counterfeit and infringing products pose a serious threat to the company. Of course, no business wants its products infringed or its market share stolen.

With Juul, however, it’s far more complicated. Juul Labs is currently under heavy FDA scrutiny over the popularity of its products with minors.

“As you start to enforce generally on the sale of these types of products to youth, oftentimes they are going to look for another seller or distribution point of this product,” said Punderson. “The challenge is that oftentimes they’re going to platforms or places for this and you have no idea what the origin of the product is. A lot of it is counterfeit. So they get something they believe is Juul only to find out they have a counterfeit device or pod.”

He went on to say that, for Juul, a top priority is identifying counterfeit sellers and quickly putting that information into the hands of law enforcement. To the extent that they can’t take action, said Punderson, Juul will take civil action.

Part of the concern is that there is zero transparency into what ingredients are being used in infringing products, whereas Juul’s recipe at least meets the legal requirements for disclosure as it seeks full FDA approval.

Juul doesn’t currently have data around the scale of infringing products on the market, but counterfeit Juul products may inaccurately increase sales figures, intensifying scrutiny from the FDA.

Juul has already taken legal action against many infringing manufacturers and distributors, but Punderson aims to take Juul’s efforts against infringing products to a new level.

He sees the issue as threefold: Juul Labs must work to stop these products from being manufactured in the first place, ensure they aren’t allowed across borders into the country and take action against retailers who sell infringing products and remove them from the market.

“This isn’t a problem where there is only a production problem but there isn’t really a distribution or consumption problem,” said Punderson. “We don’t have the luxury of looking at the problem singly-faceted. From a global perspective, we want to stop the production and distribution of infringing products around the world, and we’ll work closely with government agencies attempting to stop illicit distribution of goods.”

Punderson previously served as managing director of IP Protection at PriceWaterhouse Coopers, VP of Global Anti-Counterfeiting/Anti-Diversion at Oakley and worked at Apple on the Intellectual Property Enforcement team.

Juul is currently viewed by many as a Facebook-ified, 2018 version of Marlboro. Notably, Juul Labs recently closed a $12.8 billion investment from Altria Group, the makers of Marlboro cigarettes. When asked why he chose to work for Juul, Punderson said his initial reaction was no. But after he did some research around the mission of the company, and thought of his own personal experience losing his father to emphysema, he came around quickly.

“I would do anything to get two or three more years with my dad, who was a lifelong smoker,” said Punderson. “[…] We’re trying to do good things here, move people away from tobacco and give them an alternative. To me, it’s a valuable, noble cause that’s worth being involved in and I’m proud to be here.”

It remains to be seen just how big of an issue infringing products are for Juul and other above-board e-cig makers, but Juul is ramping up its efforts to combat copycats from getting into the hands of consumers.

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Juul Labs gets $12.8 billion investment from Marlboro maker Altria Group

Posted by | funding, Gadgets, Health, juul, juul labs, Startups, TC | No Comments

After a long year fighting underage use of its products, Juul Labs has today struck a deal with Altria Group, the owners of Philip Morris USA and makers of Marlboro cigarettes.

The deal values Juul at $38 billion, according to Bloomberg, and injects the company with a fresh $12.8 billion in exchange for a 35 percent stake in Juul Labs.

Here’s what Juul Labs CEO Kevin Burns had to say in a prepared statement:

We understand the controversy and skepticism that comes with an affiliation and partnership with the largest tobacco company in the US. We were skeptical as well. But over the course of the last several months we were convinced by actions, not words, that in fact this partnership could help accelerate our success switching adult smokers. We understand the doubt. We doubted as well.

He goes on to explain the strict criteria Juul Labs had for a potential investor, particularly one from the Big Tobacco space. For one, Altria entered into a standstill agreement that limits to 35 percent the company’s ownership in Juul. Altria also must use its database and its distribution network to get out to current smokers the message of Juul.

For the past year, many have seen Juul as a dangerous toy for teenagers. In November, FDA Commissioner Scott Gottlieb announced new measures for the e-cig industry meant to keep the products out of the hands of teens. One of those measures includes restricting the sale of flavored non-combustible tobacco products beyond the usual cigarette flavors of tobacco and menthol.

But after nearly a year of playing defense, this new deal marks a bit of an offensive push from Juul Labs. The company has always stressed that its main goal is to give smokers a meaningful alternative to combustible cigarettes. Partnering with Big Tobacco may not seem like the best way to do that, optically speaking. But Altria has agreed to a few measures that would get into the hands of actual smokers information about Juul, including:

  • providing Juul with access to its retail shelf space, meaning that Juul’s tobacco and menthol products will be merchandized right alongside Altria combustible cigarettes
  • Altria will include direct communications about Juul to adult smokers through cigarette pack inserts and mailings via Altria companies’ databases
  • Altria will support Juul via its logistics and distribution networks, as well as its sales team, which works with more than 230,000 retail locations

In the release, Altria said that part of the reason for the investment is simply that the organization understands change is coming to the tobacco industry.

Howard Willard, Altria’s chairman and chief executive officer, had this to say in a prepared statement:

We are taking significant action to prepare for a future where adult smokers overwhelmingly choose non-combustible products over cigarettes by investing $12.8 billion in JUUL, a world leader in switching adult smokers. We have long said that providing adult smokers with superior, satisfying products with the potential to reduce harm is the best way to achieve tobacco harm reduction. Through JUUL, we are making the biggest investment in our history to achieve that goal. We strongly believe that working with JUUL to accelerate its mission will have long-term benefits for adult smokers and our shareholders.

Altria has made a few big moves lately, including acquiring a 45 percent stake in cannabis company Cronos earlier this month. The company also announced this month that it would discontinue its own e-cig products, including all MarkTen and Green Smoke e-vapor products, and VERVE oral nicotine products.

“This decision is based upon the current and expected financial performance of these products, coupled with regulatory restrictions that burden Altria’s ability to quickly improve these products,” read the press release. “The company will refocus its resources on more compelling reduced-risk tobacco product opportunities.”

Now we know that those opportunities look like an extra-long thumb drive called Juul.

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Juul tightens up social media to focus on former smokers switching to e-cigs

Posted by | Facebook, fda, Gadgets, instagram, juul, juul labs, social media, Startups, TC, Twitter | No Comments

Juul Labs, the company behind the ever-popular Juul e-cig, has today announced a new policy around social media.

This comes in the midst of Juul’s effort to get FDA approval, which has been made more arduous by the fact that the FDA has cracked down on Juul after learning how popular the device is with underage users.

As part of the new policy, Juul will no longer feature models in pictures posted on Instagram, Twitter, or Facebook. FWIW, Juul doesn’t even have a Snapchat. Instead of using models to market the e-cig, Juul Labs will now use real former smokers who switched from combustible cigarette to Juul.

Juul has always said that its product was meant to serve as an alternative to combustible cigarettes, which are considered far more harmful to your health.

Juul has also initiated an internal team focused on flagging and reporting social media content that is inappropriate or targeted to underage users.

The company mentioned that it has worked to report and remove more than 10,000 illegal online sales since February from various online marketplaces.

We reached out to Juul to see if any changes have been made to the way that Juul targets ads on social media and elsewhere. We’ll update the post if/when we hear back.

Here’s what Juul Labs CEO Kevin Burns had to say in a prepared statement:

While JUUL already has a strict marketing code, we want to take it one step further by implementing an industry-leading policy eliminating all social media posts featuring models and instead focus our social media on sharing stories about adult smokers who have successfully switched to JUUL. We also are having success in proactively working with social media platforms to remove posts, pages and unauthorized offers to sell product targeted at underage accounts. We believe we can both serve the 38 million smokers in the U.S. and work together to combat underage use – these are not mutually exclusive missions.

In April, the FDA sent a request for information to Juul Labs as part of a new Youth Tobacco Prevention Plan, which is aimed at keeping tobacco products of any kind out of the hands of minors. The information request was meant to help the FDA understand why teens are so interested in e-cigs (particularly Juul) and whether or not Juul Labs was marketing the product intentionally to minors.

In response, Juul announced a new strategy to combat underage use, with an investment of $30 million over the next three years going towards independent research, youth and parent education and community engagement efforts.

Since August 2017, Juul has required that people be 21+ to purchase products on its own website, but online and offline third-party retailers have not been so diligent.

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