Big Tobacco companies are increasingly relying on nicotine pouches to drive future growth as cigarette sales decline. Philip Morris International, through its Swedish Match subsidiary, has made significant investments, including a $16 billion acquisition and plans to sell up to 840 million cans of Zyn in the US this year, a 45% increase from the previous year. The company aims for two-thirds of its revenues to come from smoke-free products by 2030 and is expanding its Zyn manufacturing with a new $600 million plant in Aurora, Colorado, and a $232 million plant in Owensboro, Kentucky.
The nicotine pouch market is experiencing rapid expansion, with global value estimated at $6.9 billion in 2025 and projected to reach $42.4 billion by 2033, representing a compound annual growth rate of nearly 25%. The US is the largest market. Citibank analysts estimate that nicotine pouches offer a gross margin approximately 15 percentage points higher than cigarettes, making them an attractive product for manufacturers due to lower production costs.
Other major players are also investing heavily: Reynolds American (a British American Tobacco subsidiary) has expanded production for its Velo brand and committed $3.2 billion to nicotine product spending through 2030. Altria is producing its on! and on! PLUS pouches, and smaller companies like Swisher and WiJo are also investing in production facilities. However, the market faces challenges, including the ease of entry for new brands, some of which use aggressive marketing tactics and offer pouches with significantly higher nicotine content (up to 15 milligrams per pouch), raising concerns among public health experts about potential new addiction pathways for young people. Regulatory bodies like the WHO are pushing for tighter controls, and some countries, like France, have already banned them. Despite these concerns, major brands like Zyn (with about two-thirds of the US market) and Velo remain dominant.
