Nicotine Pouches Market Size, Share & Trends Analysis Report By Product, By Distribution Channel, By Flavor, By Strength, By Region, And Segment Forecasts, 2024 - 2030

Nicotine Pouches Market Size & Trends

The global nicotine pouches market size was estimated at USD 3,011.4 million in 2023 and is expected to grow at a CAGR of 34.0% from 2024 to 2030. The growing interest in nicotine pouches among younger consumers who are trying to quit smoking, coupled with the rising demand for alternative products that do not involve lung exposure, will drive market growth during the forecast period. Rutgers, one of America's leading public research universities, published a report in March 2022 that assesses consumer awareness and interest in nicotine pouches among U.S. smokers. About 1,018 smokers in the U.S. were surveyed about their knowledge of nicotine pouches and the study found that approximately 29% of smokers were aware of these products, 6% had tried the product, and 17% were interested in trying it.

The growing penetration of online retailers selling nicotine pouches has made it convenient for consumers who want to shift to safer alternatives to smoking. This factor contributed to the growth in the sales of nicotine pouches in 2023 and is expected to continue over the forecast period.  There is a growing consumer demand for nicotine products that are safer and free from the negative effects of smoke or inhalation. According to the Centers for Disease Control and Prevention (CDC), sales of nicotine pouches in the U.S. increased 300 times between 2016 and 2021.

Key players in the market-including British American Tobacco and Swedish Match-witnessed rapid growth in their modern oral segment in the U.S. in 2020-2021. For instance, in the first half of 2021, Swedish Match witnessed a 50% increase in sales of its ZYN products in the U.S. In addition, according to a company report, the shipment of ZYN nicotine pouches amounted to 173.9 million cans in 2021, up from 114.1 million cans in 2020.

According to a 2023 article published by Boltbe, a nicotine pouches manufacturer, nicotine pouches have become increasingly popular as a smokeless alternative for satisfying nicotine cravings. These small, flavored packets are easy to use, discreet, and are growing in popularity due to industry marketing strategies, product availability, and social trends. The demand for nicotine pouches has been fueled by their appeal on social media. Influencers and content creators play a major role in establishing trends and shaping perceptions around nicotine pouch usage. Social media platforms like Instagram have created a "digital echo chamber" that normalizes nicotine pouch use within certain social circles. For example, influencers such as D'vey, a DJ, and Billie-Jean Blackett, a model and reality TV star, have posted content featuring the Velo brand, portraying it as a "cool lifestyle product."

Industry Dynamics

Manufacturers in the nicotine pouches industry are actively engaged in various initiatives to meet evolving consumer demands and market trends.

The degree of innovation is high in the nicotine pouches industry. The introduction of a wide range of flavors has been a significant area of innovation. This not only attracts new users but also helps in retaining existing customers by offering a variety of sensory experiences. Innovations in the formulation of nicotine pouches have led to improvements in taste, mouthfeel, and reduced irritation. This includes the use of food-grade ingredients and optimizing the moisture content for better user experience.

The nicotine pouches industry has witnessed a significant level of merger and acquisition (M&A) activity in recent years. This trend is driven by several factors, including the rapid growth of the industry, the desire for established companies to diversify their portfolios, and the competitive advantage of acquiring innovative startups.

Regulations play a significant role in shaping the nicotine pouches industry, influencing product development, marketing, distribution, and consumer access. Many countries impose limits on the maximum nicotine content allowed in nicotine pouches. Regulations often specify the ingredients that can be used in nicotine pouches, impacting product formulation.

In the nicotine pouches industry, several product substitutes offer alternatives for consumers seeking nicotine or tobacco-like experiences. Various product substitutes such as cigarettes, cigars and cigarillos, e-cigarettes, nicotine gum, nicotine patches, CBD products, and others are present.

The nicotine pouches industry has seen a significant level of product launches in recent years. This trend is driven by growing consumer demand for smokeless and discreet nicotine products, as well as the competitive landscape where companies strive to differentiate their offerings.

The nicotine pouches industry is experiencing significant regional expansion as companies seek to tap into growing demand across different geographies. This expansion is driven by a combination of regulatory changes, evolving consumer preferences, and strategic business decisions aimed at capturing industry share in emerging and established markets.

Product Insights

The tobacco-derived nicotine pouches segment accounted for the largest revenue share of 96.7% in 2023. The preference for tobacco-derived nicotine pouches stems from various factors and trends within the industry. These pouches offer users a familiar taste and aroma akin to traditional tobacco products, appealing to those seeking a recognizable experience. With typically higher nicotine content compared to synthetic alternatives, tobacco-derived pouches attract individuals desiring a stronger nicotine hit. In addition, some consumers perceive these products as potentially less harmful than combustible tobacco, driving interest in harm reduction alternatives. Market trends indicate a growing demand for innovative nicotine products, with manufacturers focusing on developing tobacco-derived options to cater to consumer preferences.

The synthetic nicotine pouches segment is expected to grow at a CAGR of 55.1% from 2024 to 2030. Some consumers view synthetic nicotine pouches as a potentially safer alternative, as they do not contain tobacco leaves or combustion byproducts. This aligns with a broader trend of health-conscious consumer behavior, where individuals seek products perceived as less harmful.  Furthermore, the wide range of flavors available in synthetic nicotine pouches appeals to consumers looking for novel and enjoyable experiences, particularly younger demographics. The convenience and discretion offered by nicotine pouches, whether synthetic or traditional, also contribute to their popularity, as they can be used discreetly in various settings where smoking is prohibited.

Flavor Insights

The flavored nicotine pouches segment accounted for the largest revenue share of 89.7% in 2023. Nicotine pouches come in many varieties, from those with lower nicotine levels to those with higher levels. They also come in different flavors, including mint, coffee, lemon, and berry. In 2020, 82.9% of youth used flavored nicotine pouches, including 84.7% of high school users (2.53 million) and 73.9% of middle school users (400,000) in U.S. This variety allows users to explore different options, finding ones that they find enjoyable and satisfying. In addition, flavored pouches often mask the harshness or bitterness associated with tobacco, making the experience more pleasant, particularly for those new to nicotine products or seeking alternatives to traditional smoking.

The original/unflavored nicotine pouches segment is expected to grow at a CAGR of 36.2% from 2024 to 2030. 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. Unflavored pouches resonate with minimalist lifestyles, offering simplicity and authenticity. A high preference for pure nicotine among U.S. consumers is driving sales of unflavored nicotine pouches in North America. Unflavored pouches offer flexibility, allowing users to tailor their experience by mixing them with other flavors or additives according to their preferences. Some consumers find flavored pouches overwhelming and opt for unflavored options to avoid sensory overload.

Strength Insights

The strong (4-6 mg/pouch) strength nicotine pouches segment accounted for the largest revenue share of 43.9% in 2023. Higher levels of nicotine dependency often prompt individuals to opt for stronger doses, as they provide a more effective means of satisfying cravings and staving off withdrawal symptoms. Particularly for those endeavoring to quit smoking, the stronger nicotine content closely mirrors the intake experienced with cigarettes, facilitating the transition to nicotine pouches. Some users prefer the intensified sensation offered by these higher nicotine levels. Beyond personal preference, stronger pouches offer efficiency by delivering nicotine more promptly and effectively, appealing to individuals seeking a rapid onset of effects. Numerous factors can influence the effect of a nicotine pouch on individual users. Factors such as individual differences, moisture content, pH levels, and even flavoring can influence the strength of the product.

The normal (3 mg/pouch) strength nicotine pouches segment is expected to grow with a CAGR of 35.1% from 2024 to 2030. Moderate tobacco users and those with a lower tolerance to the effects of nicotine prefer tobacco pouches with a regular strength type. However, the availability of various flavors and strength levels that allow customers to choose products tailored to their individual needs will drive the industry's growth. For instance, Swedish Match AB brand ZYN offers a tobacco-flavored nicotine pouch that contains no tobacco in a normal strength range of 3mg. Such factors are likely to bode well for segment growth.

Distribution Channel Insights

Sales through offline channel accounted for the largest revenue share of 93.2% in 2023. The increasing availability of nicotine pouches in various flavors through offline stores such as pharmacies, drug stores, supermarkets/hypermarkets, and convenience stores is likely to drive the segment. Key players/brands in the market majorly opt for offline distribution channels to make products easily available and accessible at nearby stores. For instance, Walmart U.S. offers nicotine pouches in various strengths and flavors of brands-2ONE, NicoDerm CQ, Nicorette, Habitrol, Grinds, Baccoff, Jake’s Mint Chew, Ground Coffee, Smokey Mountain, TeaZa Energy, PrimeScreen, and Herbion.

Sales of nicotine pouches through online channels are expected to grow at the fastest CAGR of 44.0% from 2024 to 2030. Increasing third-party retailer platforms and availability of products directly from brands’ websites are some of the key factors determining segment growth. New entrants in the industry prefer online channels for product distribution. For instance, in March 2021, synthetic nicotine pouch brand NIIN launched the online retail store NIINPouches.com, which would provide consumers with a better user experience, educational information, and a convenient online platform to easily purchase high-quality, 100% tobacco-free products.

Regional Insights

North America accounted for a revenue share of 80.5% in 2023. The North American market is anticipated to grow at a significant rate during the forecast period due to increasing investments in the development of alternative products for tobacco, coupled with shifting consumer preference toward tobacco-free substitutes such as nicotine patches, gums, and lozenges. The rising consumption of nicotine pouches by adult smokers in the U.S. and Canada is a key factor driving the demand for nicotine pouches in the region. The use of nicotine pouches is also prevalent among lower annual income groups and younger populations. Consumers believe that nicotine patches are less harmful compared to other forms, which increases its demand in the region.  

U.S. Nicotine Pouches Market

The nicotine pouches market in the U.S. is expected to grow at a CAGR of 33.2% from 2024 to 2030. The market for nicotine pouches in the U.S. is expected to witness significant growth over the forecast period owing to the presence of large-scale companies including Altria Group, Inc., Reynolds American Inc., and Imperial Brands Plc, and their extensive strategic initiatives like product launches and innovation.

Scandinavia Nicotine Pouches Market

The Scandinavia nicotine pouches market is expected to grow at a CAGR of 35.7% from 2024 to 2030. Nicotine pouches have gained widespread popularity in the Scandinavian region among youth due to the large-scale production of flavored nicotine pouches in Sweden, Norway, Denmark, and Finland. Sweden is considered to be the biggest producer and consumer of nicotine pouches worldwide. Nicotine pouches like Snus have originated from Sweden and have gained immense popularity in the entire region further driving the market growth.

The nicotine pouches market in the UK is expected to grow at a CAGR of 38.9% from 2024 to 2030. Also, growing awareness among the UK population regarding tobacco-free products will stimulate the demand for nicotine pouches in the country. For example, buynicotinepouches.co.uk is a website based in the UK, that creates awareness regarding the ill effects of tobacco consumption and works directly with leading tobacco manufacturers to sell the best and fresh products available in the category of tobacco-free oral products.

Asia Pacific Nicotine Pouches Market Trends

The Asia Pacific nicotine pouches market is expected to grow with a CAGR of 46.1% from 2024 to 2030. Rapid urbanization, per capita income, and attractive marketing strategies adopted by global players are set to propel market growth in Asia Pacific. 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, a Japan-based brand, offers nicotine pouches in seven flavors, including Tingling Mint, Sour Red Berry, Fresh Mint, Cooling Mint, and more.

The nicotine pouches market in China is expected to grow at a CAGR of 48.0% from 2024 to 2030. The demand for nicotine pouches in China has surged in recent years, driven by a combination of factors. With the Chinese government’s tightening regulations on traditional tobacco products like cigarettes, consumers are seeking alternative options. In response to these regulatory measures, the sales volume of alternative tobacco products, including nicotine pouches, has been rising.

The nicotine pouches market in India is expected to grow at a CAGR of 46.9% from 2024 to 2030. Nicotine pouches are widely accepted by consumers, and retailers have predicted significant market expansion for the category of tobacco-free products in India, majorly due to growing health concerns in light of COVID-19 risk factors. There is an increasing demand among consumers for goods that are safer as well as free from the negative effects of smoke or inhalation.

Central & South America Nicotine Pouches Market Trends

The Central & South America nicotine pouches marketis anticipated to grow in the coming years. Smoking prevalence in Central & South America has reduced in the last few decades as a result of regional tobacco control efforts. Tobacco use and smoking prevalence of 15.6% has been observed among adults in Central or South America, which is expected to boost nicotine pouches usage. For now, people are quitting the smoking and using Tabaco derived products to reduce the tobacco usage.

Middle East & African Nicotine Pouches Market

The Nicotine pouches market in MEA is anticipated to grow in the coming years as it is popular in various MEA countries including Egypt, Nigeria, and Qatar and are consumed on a large scale in these countries. Egypt has the largest population of tobacco users in the region. Across the six Middle Eastern and African markets under review, a range of reduced-risk products are legal in most countries. Some products are legal in other countries, but there are notable restrictions. For instance, In Kenya, regulatory uncertainty led to British American Tobacco (BAT) launching and subsequently withdrawing its tobacco-free nicotine pouch brand Lyft from the market following a regulatory dispute in late 2020.

Key Nicotine Pouches Company Insights

The global nicotine pouches market is characterized by the presence of numerous well-established players such British American Tobacco PLCO, Altria Group, Inc., NIQO co.(Swedish Match AB), Nicopods ehf., SnusCentral, Japan Tobacco International, Swisher, GN Tobacco Sweden AB, Skruf Snus AB, and Tobacco Concept Factory, among others. The market players face intense competition from each other as some of them are among the top nicotine pouches manufacturers with diverse product portfolios for nicotine pouches. These companies have a large customer base due to the presence of established and vast distribution networks to reach out to both regional and international consumers.

Recent Developments

• In April 2024, Scandinavian Tobacco Group UK (STG) launched a new range of nicotine pouches called XQS in the UK. XQS pouches are made in Sweden, are available to retailers at a competitive price of £5.50. The XQS range includes four flavors: Blueberry Mint, Tropical, Cool Ice, and Arctic Freeze. These pouches are designed with a smaller size to fit comfortably under the lip and come in fully recyclable packaging.

• In March 2024, British American Tobacco unveiled a new center in Southampton, UK, featuring a pilot plant for nicotine pouches. This facility will enable the company's research team to rapidly transform ideas into test products in just an hour.

• In March 2023, Nordic Spirit introduced a more potent variation of its Spearmint-flavored nicotine pouches. The introduction of the product at a retail price of £6.50 aimed to cater to the high demand for extra-strong and strong variants, which collectively hold an 83.1% market share within the category.

Nicotine Pouches Market Report Scope

Global Nicotine Pouches Market Report Segmentation

This report forecasts revenue growth at the global, regional, and country levels and provides an analysis of the latest industry trends and opportunities in each of the sub-segments from 2018 to 2030. For this study, Grand View Research has segmented the global nicotine pouches market report on the basis of product type, flavor, strength, distribution channel, and region.

• Product Type Outlook (Revenue, USD Million, 2018 - 2030)

  • Tobacco-derived Nicotine

  • Synthetic Nicotine

• Flavor Outlook (Revenue, USD Million, 2018 - 2030)

  • Original/Unflavored

  • Flavored

• Strength Outlook (Revenue, USD Million, 2018 - 2030)

  • Light (2 mg/pouch)

  • Normal (3 mg/pouch)

  • Strong (4-6 mg/pouch)

  • Extra Strong (More than 8 mg/pouch)

• Distribution Channel Outlook (Revenue, USD Million, 2018 - 2030)

  • Offline

  • Online

• Regional Outlook (Revenue, USD Million, 2018 - 2030)

  • North America

    • U.S.

    • Canada

    • Mexico

  • Europe

    • UK

    • Germany

    • France

    • Scandinavia

    • Spain

  • Asia Pacific

    • China

    • Japan

    • India

    • Indonesia

  • Central & South America

    • Brazil

  • Middle East & Africa

    • Saudi Arabia