Nicotine is addictive, and smoking tobacco kills. It's more or less as simple as that. Some users of nicotine pouches praise their benefits for attention span, although these have only been partially proven. However, it can be said that nicotine sends a positive signal to the brain, which smokers who are quitting sometimes need.
While cigarette use has declined significantly in our societies, the tobacco industry plays a role in the resilience of this practice. Twenty-five years ago, one-third of the population smoked tobacco. Today, it is one-fifth.
Alternatives
Two trends are emerging today. First, the most mature market, heated tobacco. The market size is expected to reach $207bn in 2033 with a compound annual growth rate of 21.4%.
Then there are nicotine pouches, which are oral products that deliver nicotine. This is a socially acceptable practice as it is neither visible nor odorous. The market size is expected to reach $25.4bn in 2030, with a compound annual growth rate of 29.6%.
Young Americans have readily adopted this practice and represent the vast majority of the global market.
Both brands are owned by Philip Morris and are leaders in their respective segments. The group was ahead of its competitors. See also: Philip Morris remains one step ahead.
Philip Morris is the only cigarette manufacturer to have committed to converting all of its revenue to smoke-free products: currently 40% of them are smoke-free. In comparison, British American Tobacco is trailing, with 18%, driven by its rechargeable Vuse e-cigarette. While the latter suffers from competition from (illegal) disposable vapes, its nicotine pouches show real potential. The Velo brand, the European leader with a market share of over 60%, is also targeting the US market, with its share rising from 7% at the end of 2024 to over 15% before the summer, ahead of its competitor Zyn.
At Altria, owner of Marlboro, hopes are pinned on the On! brand. Its nicotine pouches hold nearly 10% of the US market. But the company lags behind its rivals, as does Imperial Brands, which still has a limited presence in the smokeless segment.
Regulatory challenges
While the future looks a little brighter for the tobacco industry, it is partly thanks to regulations that are changing, slowly but surely. In January, the FDA (Food and Drug Administration) officially listed Zyn products. This created a positive narrative that spread throughout the industry. Heated tobacco, which is easier to classify alongside traditional cigarettes, has been fairly warmly welcomed. Nicotine pouches, meanwhile, are more controversial. Seen by some as a risk reduction solution, they are viewed by others as a disguised health threat.
In Europe, the precautionary principle remains the norm. Nicotine is primarily perceived as a problem and rarely a solution. Brussels is preparing important legislation on these issues, with two opposing views. Some advocate a risk reduction model and encourage the transition from combustible cigarettes to less harmful alternatives. Others fear that nicotine will become commonplace, which could undermine decades of anti-smoking efforts.
Time will tell which of these visions prevails. In the future, all eyes will be on Japan, where heated tobacco now represents half of the country's tobacco consumption. Sweden will also be closely watched in Europe. Nicotine pouches are a long-standing cultural practice there, yet the smoking-related mortality rate is 44% lower than the EU average. But also towards the United States, for those who raise the risk that the normalization of these alternatives will attract young people.
