The volume of Nicotine Pouches that are available on the market today is at the highest number it’s ever been, with approximately over 130 different brands that have been created by 62 different manufacturers. This is because the popularity and global usage of Nicotine Pouches has seen a sharp rise in the last few years, with more awareness of the benefits of using Nicotine Pouches being created, as well as more brands on offer with varying Nicotine strengths and flavours also being obtainable.
What is interesting though is that over the last few years, Big Tobacco companies have began becoming more involved with Nicotine Pouch production and manufacture, with four out of the five that make up the Big Tobacco moniker being behind specific brands of Nicotine Pouches such as Nordic Spirit Nicotine Pouches and VELO Nicotine Pouches. In this article, I’m going to take a deep dive into what brands that Big Tobacco companies are involved with, and why it is that they are getting involved with the Nicotine Pouch industry.
The Value of the Nicotine Pouch Market Is On The Rise
Nicotine Pouches have been around on the global market a lot longer than what people may realise, with the first inception of them being created nearly a decade ago. They were designed by taking inspiration from the design of Snus pouches, these are small white pouches but contain actual tobacco leaf, whereas Nicotine Pouches do not. Snus originates from Sweden, where the first form of it was created way back in the late 1800’s which is crazy when you think about it. It’s still hugely popular in Sweden and played a crucial role in Sweden being on course to reach “Smoke Free” status as a country this year, which means 5% or less of the countries adult population will be classed as smokers.
Snus however was banned from sale in all countries in the European Union in the early 1990s, due to aggressive marketing techniques from companies that were creating Snus, as well as a cause for concern on people’s health due to it containing tobacco which in turn contains carcinogens and could lead to adverse health effects.
Nicotine Pouches were created to give people the opportunity to use an “Oral Nicotine” product, just without having to consume tobacco and limit the risk factor involved which would normally be quite high if using Snus. It was around 2019 that Nicotine Pouches were really pushed out on to the European and USA market, and from there it took several years for global awareness and usage of Nicotine Pouches to start gaining traction, but once the hold was taken, it’s grown from strength to strength.
It’s reported that as of 2022, the Global Nicotine Pouch Market is worth over $1.5 Billion, and it has a projected rise from that to nearly 36% from 2023-2030, which is pretty impressive I think you’ll agree. This has been helped massively by the usage rates of Nicotine Pouches in Sweden, as well as a huge up rise in use in the United States of America, with sales of Nicotine Pouches shooting up from 126 million units in 2019, to 800 million by the end of 2022, an astronomical increase which has massively contributed to the Nicotine Pouch Market value being what it is today.
The other contributing factor within this somewhat rapid growth is the involvement of Big Tobacco companies, acquiring or forming brands of Nicotine Pouches and heavily promoting them by using their already established weight within the tobacco industry. Let’s take a look at this in more detail.
Big Tobacco and Nicotine Pouches
As I mentioned, it was around 2019 that saw the first big push of Nicotine Pouches onto the market both in Europe and the USA, and it was British American Tobacco that took the first stride out into the Nicotine Pouch market, with the introduction of Lyft (as it was known in the UK and VELO (as it was known in the USA) Nicotine Pouches. These were manufactured and marketed under their “Nicoventures” arm of the company, a company dedicated to creating a smoke free future for all by offering tobacco free alternatives for people wanting to move away from Tobacco.
It was then later that year that BAT/Nicoventures decided to rebrand Lyft to VELO so it would become a globally known brand rather than just in the USA. VELO is one of the leading brands of Nicotine Pouches sold on today’s market and the brand has been seen as a sponsor of the McLaren Formula 1 Racing team, which is a pretty big deal in my opinion.
Nordic Spirit Nicotine Pouches are also one of the leading brands of Nicotine Pouches here in the UK as well as in Europe. Nordic Spirit is a brand that was created by Japan Tobacco International, and is sold in 9 different countries in Europe and is responsible for 70% of the UK Nicotine Pouch Market sales. They pride themselves on offering a tobacco free alternative for Nicotine that is “sustainably produced”
Philip Morris International is the leading brand when it comes to the Big Tobacco moniker and are an absolute tycoon in the Tobacco industry. But until 2021, they had no involvement at all within the Nicotine Pouch industry but in a statement in February 2021, they acknowledged “attractive economics in this small yet growing industry” and that was a good enough indicator that it wouldn’t be long before they took a hold in the Nic Pouch industry.
Later that year, they acquired their first Nicotine Pouch manufacturer, a company based in Denmark named AG Snus. But it wasn’t until 2022 that we saw the big swing from Philip Morris International. They formulated a deal which saw them acquire Swedish Match, a company that specialises in Snus production in Sweden, but also Nicotine Pouch manufacture, and are the driving force behind Zyn Nicotine Pouches, a brand that is hugely popular in the United States. PMI admitting that they have belief in “Modern Oral Nicotine Products” there was a similar reference made by British American Tobacco along these lines also.
Why Are Big Tobacco Getting Involved?
The obvious reason which stands out for why Big Tobacco may be getting involved in the Nicotine Pouch industry may be due to the potential large gain in profit from these products. It’s an ever growing market now, with the market value being in the billions already and estimated to only increase within this decade, so why wouldn’t they want to get involved?
But the other driving factor that seems to be a common thing is that these Big Tobacco companies are committed to creating and promoting smoke free alternatives for people to use to get their Nicotine fix. Which in turn will reduce the amount of smokers worldwide, which in turns brings down the global mortality rate which smoking plays a huge role in.
And on top of this also, they are creating a product that is much more environmentally friendly and sustainable due to the fact they do not emit any form of smoke that contains toxic chemicals polluting the air like what cigarettes do. So their involvement within the Nicotine Pouch industry isn’t totally money driven and they are indeed committed to helping create a smoke free future around the globe.