The Big Interview: VPZ director Doug Mutter

Mutter says the firm's strong trading enables it to be 'very ambitious'. Picture: Lisa Ferguson.

Newhart demonstrates this with an imagined telephone conversation about a shipment of tobacco between Sir Walter Raleigh and the head of the West Indies Company in England, and the latter is baffled as to why anyone would take the leaves, roll them in paper and put them in their mouth.

“Then what do you do, Walt,” the company boss asks, laughing, to be told that you set fire to them and inhale the smoke. “Walt, we’ve been a little worried about you, you know, ever since you put your cape down over that mud.”

Decades on from the sketch’s debut and smoking is no longer allowed in comedy clubs, restaurants and planes as governments have cracked down on the habit, mindful of its ruinous impact on health – and if you’re still a smoker, the joke’s now on you.

What better time then for a new Sir Walter Raleigh to step forward in the shape of Doug Mutter, director of Edinburgh-based vaping specialist VPZ, which seeks to capitalise on smokers looking for a healthier alternative?

Vaping Awareness Month – or “VApril” – is upon us, encouraging the UK’s 7 million smokers to switch to vaping “and learn about how this can be a life-changing decision for the good of their health”.

VApril cites Public Health England’s finding that vaping may be helping at least 20,000 smokers to quit tobacco a year, and official VApril partner, VPZ, highlights data from the same body estimating that the activity is 95 per cent less harmful than smoking traditional cigarettes. “Vaping is emerging as a key weapon in the NHS’s stop smoking strategy,” says the firm.

VPZ was established after former two-packets-a-day smoker Callum Henderson was offered an e-cigarette in the pub by a friend, helping him to quit. Henderson and his brother, fellow ex-smoker Connor, started the business in 2012 in Leith.

Previously known as Vaporized, it unveiled its rebrand at the start of this year with its logo projected on to landmarks including the Forth Bridge, the Scottish Parliament and above pub Deacon Brodies on the Royal Mile.

That was to really spread the message that the firm is growing across the country, according to Mutter.

It now has its headquarters and a manufacturing operation at Edinburgh’s Terston House at Newbridge, describing itself as the UK’s top vaping specialist.

It has grown to about 500 staff and roughly 130 stores and counting, as it targets 300 sites by 2021, doubling headcount to support the strategy.

Mutter deems the store-opening programme “very aggressive”, with “an awful lot of sites in the works”, while VPZ is able to snap up prime locations vacated by recent retail casualties.

The director also noted that it has pursued organic growth on profits having always been invested back into the business. “And as the company continues to have huge success in its trading side of things, it enables us to be very ambitious,” he says.

In January VPZ expected to see revenues jump 17 per cent in 2018 to around £26.5 million.

Its pedal-to-the-metal progress has not gone unnoticed, with the firm last year ranked Scotland’s fastest-growing private business and 24th across the UK in the Sunday Times Virgin Atlantic Top 100, having experienced 97 per cent growth over the previous three years.

“BrewDog finished second in Scotland, so it’s no mean feat,” says Mutter, with the Ellon-based brewer sitting at 71st place after notching up 56 per cent growth. VPZ’s success is “down to the company’s vision and strategy of having the leap of faith to firstly get involved in the industry back in 2012 and take that risk to open a store and see what the challenges were,” he says.

The business anticipates that the vaping market will flourish as increasing numbers of smokers recognise its effectiveness in helping people to quit smoking.

It says about 2 million people in the UK have already kicked the habit by switching to vaping, while Cancer Research UK estimates that 9.4 million could soon make the move.

Mutter came to the business about three years ago, having studied business management and marketing, but on entering the corporate world realised that practical experience proved a far faster way to learn than its theoretical equivalent.

He worked at Scottish-based Acorn Pets, which in 2011 went into administration for the second time in less than two years. Mutter then entered the vaping fray via blu eCigs, with his duties at the global brand including innovation and manufacturing which necessitated travel between Edinburgh, China and the US.

Blu is now part of tobacco giant Imperial Brands, and has strong positions in the US and UK, the world’s two largest vaping markets. That company estimates global sales of vaping products could rise above £30 billion by 2020, from £8bn currently.

Mutter says that as well as VPZ looking to grow its presence in the UK, it has one eye on Europe.

Domestic success has springboarded off its level of people looking to move out of smoking and switch to a healthier alternative, in his view, and it can be mirrored in the likes of Germany, France, Scandinavian countries, the Netherlands and Belgium – where it could open satellite hubs.

He adds that “vaporised” has different meanings in different languages, with many players in the market opting for various takes on the word vaping in their name. “We felt that the time was right to distance ourselves from that and give us a name that could resonate across all territories.”

The business in November announced a £2m investment in new manufacturing infrastructure, providing an end-to-end operation, spanning product development, distribution and retail – and adding about 20 specialist jobs.

Mutter at the time said that investing in manufacturing and product development expertise – including chemists and flavour mixologists – gave the firm a major competitive edge as it sought to “forge ahead with confidence and truly cement its position as the UK’s leading vaping specialist”.

Additionally, he revealed that the firm had inked deals to develop and manufacture products on behalf of major US brands such as Arc Distro, Bad Drip and Charlies Chalkdust, helping them grow outside their native markets. Large American players “have got big popular brands that people want to see, and for them to be able to grow them outside of the US, they look for partners to work with,” Mutter explains.

VPZ has also teamed up with organisations closer to home – such as Hibernian Football Club, becoming its official vaping partner in a deal announced in February, followed by a tie-up with Livingston Football Club unveiled earlier this month.

But the deals have attracted criticism from anti-smoking campaigners, who claim such sponsorship can be seen as marketing to young people and non-smokers, rather than as a way to help smokers to quit.

That said, a study published in the journal Tobacco Control this month found that growth in the use of e-cigarettes had not sparked a boom in teenagers taking up tobacco smoking in the belief that it was “cool”.

Furthermore, the percentage of young people who said trying a cigarette was “OK” fell from 70 per cent in 1999 to 27 per cent in 2015, with the rate dropping faster from 2011 onwards.

Mutter points out that Hibs is already sponsored by an alcohol and a betting company – Eden Mill and Marathonbet. Drink and gambling “have ruined many more lives than vaping ever will,” he states, adding that VPZ needs to find a forum to present its offering given that its sector is subject to such tight advertising restriction as it is lumped in with tobacco.

But he stresses that vaping products contain none of the chemicals and carcinogens found in a tobacco cigarette.

And while the debate continues over the long-term safety of e-cigarettes, including fears over heart damage, they have nonetheless been recognised as less harmful than lighting up.

VPZ in January ran a National Cigarette Amnesty Day, achieving record sales in the month – for example, selling 10,300 starter kits, a year-on-year jump of a fifth from January 2018.

Mutter, who in January said the business was pondering a stock market flotation and dismisses any major threat to VPZ from Brexit, highlights the rewarding nature of helping people stop smoking after decades to be able to play with their grandchildren.

And he must be hoping that Newhart’s line – warning Raleigh that he might “have rather a tough time selling people on sticking burning leaves in their mouths” – does indeed prove prophetic.