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The cigarettes industry is a global sector that generates over a trillion dollars in revenue every year. But even in an industry that started with the introduction of the cigarette to Europe by Spain in 1558, save for the introduction of the filter, additives and mass advertising, not much in terms of the actual product, until the 21st Century, has changed.

Today, however, everything has changed. More succinctly, the cigarette itself has changed and that means a new era for the industry. The future shock of the tobacco industry is and will continue to be the introduction of the e-cigarette or e-cig.

Indeed a revolution in the industry has taken hold and is spreading worldwide.

Across the globe from Britain, where British American Tobacco is advertising its Vype e-cig on television, to Portugal, as a market leading country with e-cig sales projected for the year at over $350 million, to China, where the e-cig was first manufactured and marketed, the revolutionary product is on a roll.

Here in the U.S., Altria Group (MO), which produces Marlboro cigarettes, announced it will begin mass selling its MarkTen e-cigarette in the second quarter of this year. In what is currently a $1 billion market today, Altria with its $100 billion lead in U.S. market share of traditional cigarettes is not currently leading the e-cig revolution and could be considered a late comer in an industry that is currently driven by smaller players.

Like many revolutions in early stages, it is not clear that the big manufactures will lead. Both Reynolds America (RAI), producer of Camel cigarette, and Lorillard (LO) - parent company of Newport cigarettes, which acquired Blu e-cigarettes in 2012 - have thrown themselves into the struggle to capture market share of this emergent technology, which provides user with a nicotine hit in vapor form, but without tar and other additives.

In an attempt to lead the revolution Altria announced that it is paying $110 million to purchase e-cig producer Green Smoke, Inc. which makes most of its profit in Internet sales.

In fact, before it was announced that the company will be acquired, Green Smoke and other smaller manufactures drove and continue to drive most of their business through Internet sales, which for some time has been both the domain of smaller producers and the advertising driver of the new technology.

Investors should make no assumptions, however, with Reynolds having announced that it is taking its Vuse e-cigarette distribution national this year, and the MarkTen becoming more widely available in Q2, one should not count the big players out just yet.

Need proof of big player muscle? In just seven weeks MarkTen sales captured 48 percent of market share in Arizona, one of the company's test states.

And at this time, it is Njoy Inc., Blu and Logic Technology which are leading the distribution of e-cigs with approximately 75 percent of in store, U.S. market share.

So why are all the big players suddenly coming to the revolution? In contrast to a decline of just 3 percent to 4 percent of industry sales from traditional smokers-who have quit or are quitting-the e-cig market is just beginning to explode.

By 2015, the electronic cigarette market is anticipated to reach $5 billion to $6 billion in annual sales, while industry analysts anticipate sales of +$10 billion by 2017.

In 2013, e-cigs emerged as a +$1.7 billion sector, bringing in $700 million from convenience stores and over $600 million from online sales, or just one percent of the U.S. market.

And as sales of traditional cigarettes and tobacco products continue to decline in the U.S., e-cigs have the potential to reach 10 percent to 15 percent of industry sales volume by 2020, with some analysts predicting e-cig may well eclipse the traditional cigarette market in the next decade.

For market players who rightfully follow technology, distribution and timing, there are several relatively smaller market players that are on the move in what has emerged as a tightly competitive but burgeoning market.

As illustrative of e-cig growth potential, Vapor Corp. (OTCQB:VPCO) announced in late January that its CAGR jumped nearly 253 percent from 2008 to 2012 with revenue growth of 46 percent and 34 percent in 2011 and 2012 respectively.

Most recently, and further illustrative of the competitive power of smaller players, Victory Electronic Cigarettes Corporation (OTCQB:ECIG) and FIN Branding Group announced their recent merger just days ago.

Victory has also expanded overseas with its acquisition of VAPESTICK and has announced a partnership with Fields Texas, Ltd. with its further intent to drive global distribution.

FIN itself is an e-cig company with distribution in all 50 U.S. states that total 50,000 outlets. According to the company, "The FIN brand enjoys the number one market share position in Wal-Mart, and is a leading brand in other major retailers including Walgreens, Rite-Aid, Kroger, 7-11, Circle K, Sam's, Murphy USA, Stripes, Mapco and over 200 other major chains."

The merger is slated to reduce cost of up to $5 million through synergy, as the combined entities are set to employ a dual branding strategy going forward. Investors are warned, however, to pay wrap attention to the widespread in the company's share price.

To see real movement in consistent upward direction, investors will want to follow closely American Heritage (OTCQB:AHII) which incorporated in 2010 and is now selling its line of four distinct flavors.

What differentiates this up-and-comer are two things. First, the ingredients or contents are 100 percent produced in the U.S., and are not grown in China as are many of the Company's competitors.

In addition, the technology AHII employs is a step above the competition, because the product has both the look and feel of a traditional cigarette with a soft flexible filter and traditional shape.

Savvy investors will note that the e-cig subsector has imploded from over 450 companies in the U.S. market to just a few hundred today, with approximately 10 companies that take in 70 percent of market share, many which are smaller and more innovative players.

Investors in this groundbreaking sector who are searching for big moves will take note that AHII has moved faster in 52 weeks, compared to both the Company's much bigger and more closely aligned competitors.

Parent Company/SubsidiaryTicker52 Week Low52 Week High% Increase or Decrease
American Heritage, Inc.OTCQB:AHII.051.302199.99
Vapor Corp.OTCQB:VPCO1.7510.00471.73
Victory Electronic Cigarettes CorpOTCQB:ECIG.4460.0013536.00
Altria Group (Nu Mark, Green Smoke)MO33.1238.5816.49
Lorillard (Blu e-cigs)LO37.9553.2740.37

Driving the business plan for capturing market share, along with the Company's technological innovations and quality control, is distribution-which AHII has developed supply chain relationships for, supplemented by a state of the art inventory management system-with the Company's current vendors that includes: grocery stores, convenience stores, mass retailers, tobacco distributors, and hotel and casino operators.

In addition, the Company has recently established and secured a relationship with a major U.S. distribution company with reach in over 25,000 retail locations.

Management has also developed and begun to launch an aggressive online presence to increase brand awareness, while establishing a low-cost sponsorship program as part of a market channeling campaign.

While industry innovators and analysts debate when the e-cig market might surpass sales of traditional tobacco products, there is no debate that by 2047, the dominate technology driving the market will be these new product lines.

Further, industry analysts from Wells Fargo (WFC) to Bloomberg anticipate that the $697 billion traditional global cigarette market is likely to be surpassed worldwide within the next 10 years.

Even assuming zero growth in the worldwide market for the traditional product, again e-cig sales are anticipated to grow 40 percent year over year, or to be even more conservative, assuming e-cigs emerge as 25 percent of total traditional sales, that would mean a $20 billion market over the next decade with compound growth at 30 percent.

If history plays out, AHII might just be destined to be one of the next market breakthrough e-cig companies.

Source: Are Traditional Cigarettes Going Up In Smoke? E-Cigs' Vaporing Revolution