Nicotine Pouches Market Size, Share & Trend Analysis Report By Product (Tobacco-derived, Synthetic), By Flavor (Original/Unflavored, Flavored), By Strength, By Price Range, By Region, And Segment Forecasts, 2023 - 2030

Nicotine Pouches Market Size & Trends

The global nicotine pouches market size was valued at USD 1.99 billion in 2022 and is expected to grow at a compound annual growth rate (CAGR) of 35.7% from 2023 to 2030. Growing interest in nicotine pouches among the young people who are trying to quit, coupled with growing interest in alternative products that do not involve lung exposure. According to the Rutgers study report published in March 2022, 1,018 smokers were surveyed in the United States about their knowledge of nicotine pouches, approximately 29% of smokers were aware of these products, 6% have tried the product and 17% were interested in trying it.

The COVID-19 virus outbreak had a positive impact on the market. Nicotine pouches are widely accepted by consumers and retailers have predicted significant market expansion for the category of tobacco-free products, majorly due to growing health concerns in light of COVID-19 risk factors. Moreover, the growing penetration of online retailers for such products provided convenience to consumers who want to shift to safer alternatives to smoking. These factors contributed to overall positive growth in sales for nicotine pouches in 2020 and are expected to maintain high growth during the forecast period.

The nicotine pouches market has witnessed significant growth in recent years, driven by increasing consumer interest in smokeless and tobacco-free alternatives. This trend is partly influenced by growing awareness of the harmful effects of tobacco smoke and its link to various forms of cancer. Nicotine pouches offer consumers a smokeless option to satisfy their nicotine cravings, eliminating the risks associated with tobacco combustion and secondhand smoke. This shift in consumer preferences towards potentially less harmful nicotine delivery methods reflects a broader trend of individuals seeking alternatives to traditional tobacco products in their pursuit of reducing their exposure to known carcinogens.

There is a growing demand among consumers for goods that are safer and free from the negative effects of smoke or inhalation. Additionally, there is a rise in the demand for transparency and sustainability. According to the Centers for Disease Control and Prevention (CDC), sales of nicotine pouches in the United States have increased 300 times between 2016 to 2021. Key players in the market including British American Tobacco, and Swedish Match witnessed a rapid growth of their modern oral segment in the U.S. in 2020-2021. For instance, in the first half of 2021 Swedish Match witnessed increased sales by 50% of its ZYN products in the U.S.

The growing popularity of nicotine pouches among consumers is likely to push manufacturers to launch new products. Key players in the market are leveraging growth trends such as mergers & acquisitions, product portfolio expansions and awareness campaigns to promote new products in the market. For instance, in May 2022 Philip Morris International acquired Swedish Match AB, manufacturers of nicotine pouches, for USD 16 billion to expand its product offerings in the U.S. market. Swedish Match AB’s popular products include ZYN nicotine pouches, which are tobacco-free and rapidly growing in popularity in both the U.S. and Scandinavia.

The declining percentage of daily cigarette users also boosts the sales of tobacco-free alternative products. Furthermore, according to the report published by Swedish Match AB, shipment of its nicotine pouches brand “ZYN” amounted to 173.9 million cans in 2021, up from 114.1 million cans in 2020. This volume growth was attributed to both increased store velocities. In 2021, its were available in more than 120,000 stores in the U.S. In 2021, competition remained fierce as significant cigarette manufacturers and others expanded their geographic reach and store footprint in North America for their product portfolios, often accompanied by broad-based promotional discount activities.

Product Insights

The tobacco-free segment accounted for the largest share of 98.0% of the global revenue in 2022. The tobacco-free pouches are available in many flavors by key brands globally and are quickly gaining popularity in the global market. The manufacturers in the global market are focusing on merger & acquisition strategies to target a specific country. For instance, in November 2020, British American Tobacco plc. acquired the nicotine pouch product assets of Dryft Sciences, LLC (Dryft), a U.S.-based Modern Oral product company. This acquisition would expand British American Tobacco plc.’s modern oral portfolio in the U.S., expanding from 4 to 28 product variants. With the expanded portfolio, nicotine users would have access to a wider variety of doses and flavors, meeting all major customer trends and preferences.

The synthetic segment is anticipated to witness a prominent growth rate over the forecast period of 2023 to 2030. The increasing number of product launches in synthetic segment is expected to drive the growth of the global market. There are several brands including “NIIN” and “Rush” that are focusing on the expansion of their product portfolio with launch of synthetic pouches. For instance, in February 2021, “NIIN” brand launched its 100% tobacco-free synthetic pouches available in various flavors including, citrus chill, wintergreen, cool mint, spearmint, and cinnamon.

Flavor Insights

The flavored segment accounted for the largest share of more than 90.0% in the global market. Increased demand for reduced-risk alternatives that are both tobacco-free and smoke-free with a taste of tobacco is propelling the sales of unflavored/original products. The manufacturers operating in the global market are also focusing on the ongoing trend of consuming nicotine pouches with original taste. For instance, in April 2022 globally recognized brand Juice Head launched latest addition to its line of premium, fruit-flavored products: Juice Head Pouches, featured in 6mg and 12mg tobacco-free nicotine strengths and are available in in 5 flavors including Blueberry Lemon Mint, Watermelon Strawberry Mint, Mango Strawberry Mint, Peach Pineapple Mint, and Raspberry Lemonade Mint.

The unflavored segment is anticipated to grow at a higher CAGR of 38.4% over the forecast period. Increased preference for unflavored/original flavors by the consumers, the key players operating in the global market are focusing on introducing new products with unique original flavors. For instance, On! brands offer original flavor designed to offer an alternative to traditional tobacco products. These original flavored products contain special blend of nicotine bitartrate digydrate, microcrystalline cellulose, flavor, sodium carbonates, binders. Such product offerings are likely to offer segment growth during the forecast period.

Strength Insights

The strong strength segment accounted for the largest share of 43.4% in 2022. There are a multitude of factors that can affect how strong a nicotine pouch effect on a user, factors such as individual differences, moisture content, pH levels, and even flavoring, can influence the strength of the product. Key brands in the market offer strong strength due to its growing demand in the market. Some of the products popular for its strong strength in European market include LYFT X-Strong Series (16mg/g), Skruf Super White Fresh (26mg/g) and Ace X Cool Mint Slim (20mg/g).

The normal segment is anticipated to grow at a higher CAGR of 37.0% over the forecast period. Moderate tobacco users and those who have a lower tolerance to the effects of nicotine prefer tobacco pouches with regular strength type However, increasing product launched in the market, are available in a variety of flavors and strength levels which allows customers to choose products tailored to their individual needs and expectations. For instance, Swedish Match AB brand ZYN offers tobacco-flavored nicotine pouch that contains no tobacco in normal strength range of 3mg. Such factors are likely to bode well with the future segment growth.

Regional Insights

In 2022, Europe held a majority of the regional market share of over 50.10%. The regional market is driven by the increasing consumption of oral tobacco-free products over flammable cigarettes. The manufacturers operating in the global market are also investing in European countries to cater to the emerging demand for nicotine pouches. According to Swedish Match, the Sweden consumer base for such products continues to grow and is estimated to amount to approximately 1.3 million consumers (combined daily/occasional users) of which approximately 25% are women.

The U.K. nicotine pouches market has experienced significant growth in recent years, driven by factors such as increasing awareness of alternative nicotine products, shifting consumer preferences, and the desire to quit or reduce smoking.

Many consumers in Germany are turning to nicotine pouches as a potentially less harmful alternative to traditional tobacco products. The market has seen a growing emphasis on health and wellness aspects, including products labeled as "nicotine-free" or with reduced levels of harmful substances.

The U.S. nicotine pouches market also has experienced significant growth in recent years, driven by factors such as increasing consumer interest in smokeless and tobacco-free alternatives, the rise of vaping culture, and the desire to quit or reduce smoking traditional tobacco products.

Asia Pacific is forecasted to register the second fastest CAGR during the forecasted period. Rising urbanization, per capita income, and attractive marketing strategies adopted by global players are set to propel the market in the Asia Pacific region. Key manufacturers present in the region continued to expand their geographic and store footprint for their oral smokeless product portfolios, often accompanied by promotional discount activities. For instance, SHIRO-Japan based brand offers nicotine pouches in seven flavors including Tingling Mint, Sour Red Berry, Fresh Mint, Cooling Mint, and more.

Nicotine pouches face varying levels of regulation across different countries globally. In some instances, certain countries have less strict regulations concerning nicotine pouches compared to traditional tobacco products. For example, in Australia, where most tobacco products are heavily regulated or restricted, nicotine pouches classified as unregistered nicotine products have been available for purchase. In the United Arab Emirates (UAE), while many tobacco products are banned or heavily regulated, nicotine pouches have remained relatively unregulated, allowing their availability for consumers.

Key Companies & Market Share Insights

The nicotine pouches market is characterized by the presence of some large multinational companies with strong presence across the globe. Leading manufacturers hold a significant market share in Europe, North America, and major parts of Asia. Companies have been implementing various expansion strategies such as mergers & acquisitions, capacity expansions, strengthening of online presence, and new product launches to gain a competitive advantage.

These manufacturers are adopting various strategies, including new product launches, expansion of product portfolios, and mergers & acquisitions. For instance:

• In August 2022, Swedish Match introduced a new addition to its ZYN nicotine pouch line, known as ZYN Tobacco Gold. This product offers a tobacco-flavored experience without the inclusion of actual tobacco. The introduction of ZYN Tobacco Gold demonstrates Swedish Match's commitment to expanding their range of nicotine pouch offerings to cater to different consumer preferences.

• In April 2023, String Free, a brand of modern oral nicotine pouches, made its debut in the Swedish market. This launch represents the introduction of a new product option for consumers seeking a convenient and discreet nicotine experience. String Free's entry into the market highlights the ongoing expansion and innovation within the oral nicotine pouch category.

• In 2020, British American Tobacco expanded its production line of nicotine pouches at its factory in Pecs, Hungary. Increasing the production of such products, which contain no tobacco fits well with BAT’s strategy to offer the consumer a broader selection of potentially less harmful products.

• In February 2022, Philip Morris International made the decision to go smoke-free. It believes smoke-free tobacco is a far better option than smoking tobacco products. It aims to replace all cigarettes with non-smoking tobacco products.

• Japan Tobacco International has extended its technology partnership agreement with Sauber Engineering AG (SEN), a leading player in technology and prototype development and part of the Sauber Group of Companies. Through this partnership, both companies will continue to collaborate on the development of precision engineering projects aimed at increasing the performance of the next generation of JT Group products.

Some of the key players operating in the global nicotine pouches market include:

• Swedish Match AB

• Altria Group, Inc.,

• Nicopods ehf.

• British American Tobacco PLC

• Triumph Tobacco Alternatives LLC

• Japan Tobacco International

• Swisher

• Next Generation Labs LLC

• Philip Morris International

• Skruf

Nicotine Pouches Market Report Scope

Global Nicotine Pouches Market Report Segmentation

This report forecasts revenue growth at global, regional & country levels and provides an analysis on the latest trends and opportunities in each of the sub-segment from 2017 to 2030. For the purpose of this study, Grand View Research has segmented the global nicotine pouches market on the basis of product type, flavor, strength, price range, distribution channel, and region.

• Product Type Outlook (Revenue, USD Million; 2017 - 2030)

  • Tobacco-derived

  • Synthetic Nicotine

• Flavor Type Outlook (Revenue, USD Million; 2017 - 2030)

  • Original/Unflavored

  • Flavored

    • Mint

    • Fruit

    • Coffee

    • Cinnamon

    • Others

• Strength Outlook (Revenue, USD Million; 2017 - 2030)

  • Light

  • Normal

  • Strong

  • Extra strong

• Price Range Outlook (Revenue, USD Million; 2017 - 2030)

  • Economy (Less than USD 3)

  • Mid-range (USD 3 - 5)

  • Premium (More than USD 5)

• Distribution Channel Outlook (Revenue, USD Million; 2017 - 2030)

  • Offline

    • Hypermarkets & Supermarkets

    • Convenience Stores

    • Specialty Stores

    • Others

  • Online

• Regional Outlook (Revenue, USD Million; 2017 - 2030)

  • North America

    • U.S.

    • Canada

    • Mexico

  • Europe

    • Germany

    • U.K.

    • France

    • Scandinavia

    • Italy

    • Spain

  • Asia Pacific

    • China

    • India

    • Indonesia

  • Central & South America

    • Brazil

  • Middle East & Africa

    • Saudi Arabia

    • UAE