Key Nicotine Pouch Industry Players to Watch in 2024
RELEASE DATE: Feb 2024 Author: Spherical Insights Request Free Sample
In light of declining cigarette smoking rates, smokeless alternatives have emerged to help consumers transition away from traditional tobacco products. A notable example of such options is the nicotine pouch, which is an oral product originating in Sweden and sharing similarities with the Swedish snus in terms of packaging and nicotine delivery format.
While relatively new in the oral product category, a previous report entitled 'Global Nicotine Pouches Market' highlights significant growth for the industry, as it was valued at USD 3.45 Billion in 2022. Now that it continues to expand and is even projected to reach USD 11.82 Billion by 2032 at a growth rate of 13.1%, it is worth noting which industry players demonstrate exceptional performance and are worth keeping an eye on this year.
Nicotine pouch market growth drivers and trends
Before delving into the companies and brands dominating the industry, there needs to be a closer look at the growth drivers and trends enabling them to capture key market segments. For instance, increasing public awareness of tobacco’s health risks means tobacco-free properties can better appeal to consumers. Since secondhand smoke from traditional tobacco products can also compromise public health and safety, it matters for brands to ensure their pouches deliver nicotine in a discreet, convenient, and socially acceptable manner.
Meanwhile, an interesting trend has been the rise of a wide range of pouch flavors designed to cater to broad consumer tastes and preferences. As a result, the flavored segment gained 83.2% of the market share in 2022. In terms of regional segments, Europe dominated the market with almost half (47.2%) of the total revenue share. However, the Asia-Pacific region is expected to grow remarkably due to the increasing adoption of online retail and distribution channels.
As discussed below, nicotine pouch companies and manufacturers are able to increase their sales and shipment volumes by being attuned to these growth factors and trends.
Key industry players and brands
- ZYN (Swedish Match AB/Philip Morris International)
In 2022, tobacco giant Philip Morris International (PMI) acquired Swedish Match AB in an effort to expand its smoke-free product portfolio. With PMI being the new owner of the nicotine pouch brand ZYN, the oral products have seen tremendous growth in the US market. Since ZYN pouches are a high-quality, device-free tobacco alternative available in various flavors like mint, citrus, and coffee, their total shipment volume has increased by 65.7% since 2022, amounting to 104.5 million cans in 2023. It now leads the market by a large margin, sharing 77% of the category retail value.
- VELO (British American Tobacco)
Meanwhile, the multinational company British American Tobacco has also begun including nicotine products in its usual offerings. By introducing the modern oral nicotine brand VELO, BAT was able to penetrate Pakistan, one of the countries with the largest year-on-year growth rate, and ship a monthly volume of over 40 million pouches. Among the primary drivers of the growing adoption of VELO nicotine pouches is their tobacco-free and spitless properties, making them a convenient choice for both new and existing consumers of smokeless alternatives. Additionally, these pouches, which come in mint- and fruit-based flavors and range from 2mg to 7mg, are accessible via online retailers that ship directly from warehouses to most states in the US.
- On! (Altria)
Similar to the previous market players, Marlboro maker Altria also rolled out its smoke-free product platform, which includes the oral nicotine pouch brand On!. Beyond catering to consumers through a diverse range of strengths and unique flavors like coffee and cinnamon, Altria has also been investing in studies that explore the potential of pouches for harm reduction. By meeting this consumer demand for less harmful nicotine products, tobacco-free On! nicotine pouches have gained traction against their traditional tobacco counterparts, recording a 32.8% increase in shipment volume in the last quarter of 2023.
Besides taking into account consumer preferences and health implications, dominant players in the global nicotine pouch market can also benefit from adjusting their prices in line with traditional tobacco products and investing in tech-driven product development. Overall, continued growth is on the horizon for nicotine pouch brands in 2024.
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