Nicotine Pouch Market Forecasted to Grow Through Expansions and Acquisitions

With growing consumer awareness of tobacco’s health risks, the shift toward nicotine replacement therapy (NRT) products has contributed to the rise of oral nicotine pouches.
© Josh Sorenson

With growing consumer awareness of tobacco’s health risks, the shift toward nicotine replacement therapy (NRT) products has contributed to the rise of oral nicotine pouches. Although the nicotine pouch market originated in Europe, Maximize Market Research notes that its regional scope now includes North America, Asia Pacific, the Middle East and Africa, and South America, amounting to an industry worth $2.04 billion in 2022.

But besides rising consumer interest and global presence, expanded offerings and recent acquisitions of nicotine pouch brands will propel continued growth in the coming years. Here’s a closer look at the market forecast for nicotine pouches alongside key growth drivers.

Nicotine pouch market outlook

Nicotine pouches are advertised as smokeless alternatives that can help smokers quit by delivering the same nicotine experience as cigarettes, cigars, and other tobacco products. As these products meet the demand for smoking cessation and tobacco harm reduction, the same report from Maximize Market Research projects the nicotine pouch market to grow to $17.35 billion in 2029 at a compounded annual growth rate (CAGR) of 35.8%.

Europe had the largest nicotine pouch market share in 2022, with the key players being Swedish Match AB (Sweden), British American Tobacco PLC (United Kingdom), and Imperial Brands PLC (United Kingdom). Additionally, North America is forecasted to have a significant CAGR during the forecast period, as American tobacco corporation Altria Group, Inc. has taken an interest in oral nicotine products in recent years.

Factors boosting nicotine pouch market growth

Expanded offerings

Market expansion can be viewed in terms of a wider range of product categories. Similar to how Rapid One, a milk tea brand in the food and beverage industry, grows its customer base by introducing more tea varieties, nicotine pouch brands are coming up with more flavored options to capture broader markets. The most common pouch flavors are mint and menthol, which offer a similar sensory experience to smokers. But there has also been a surge in sweet and fruity flavors to add variety and cater to users who prefer other tastes and aromas for pouch use.

On the other hand, expanded offerings in the nicotine pouch market can also refer to an increase in distribution channels. Currently, the offline segment of supermarkets and convenience stores accounts for the bigger portion of total unit sales. However, the market’s growing adoption of e-commerce gives consumers the other option of buying nicotine pouches online. Online retailer carries an assortment of top brands, including VELO, ZYN, Rogue, and ON!, with a full spectrum of flavors and strengths to choose from. Aside from a wide selection that allows consumers to adjust their pouch use depending on their smoking history, the website conveniently ships orders anywhere in the US.

Acquisitions by tobacco giants

Corporations rely on acquisitions with emerging brands to innovate and branch out into different markets. An example of this business move can be seen in the digital health industry through the recent acquisition of Proxy by health data company ŌURA for its advanced identification technology and smart ring patent portfolio. It is also becoming commonplace in the nicotine pouch market in light of the growing demand for smoke-free alternatives to tobacco.

For instance, ITG Brands, a subsidiary of tobacco company Imperial Brands PLC, recently acquired Canada-based nicotine pouch manufacturer TJP Labs. The $83.8 million deal includes 14 product variants that will help Imperial transition to a next-generation nicotine product portfolio and provide more options to adult consumers in the US. Other major acquisitions include Philip Morris’ takeover of Swedish Match AB to expand its range of smoke-free offerings.

Beyond this increasingly competitive landscape, nicotine pouch brands are also expected to prepare for a more stringent regulatory environment. The US Food and Drug Administration has recently updated its product regulations to include synthetic or non-tobacco nicotine. Should market players that manufacture pouches with synthetic nicotine remain compliant with FDA rules, it’s likely that the nicotine pouch segment will retain its growth.

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