Nicotine Pouches Market Size, Share & Trends Analysis Report By Product (Tobacco-derived, Synthetic), By Flavor (Original/Unflavored, Flavored), By Strength, By Distribution Channel, By Region, And Segment Forecasts, 2022 - 2030

Report Overview

The global nicotine pouches market size was valued at USD 1.50 billion in 2021 and is expected to grow at a compound annual growth rate (CAGR) of 35.7% from 2022 to 2030. The 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 will drive the industry growth. 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 pandemic 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 the industry growth in sales for nicotine pouches in 2020 and are expected to maintain high growth during the forecast period. There is a growing demand among consumers for goods that are safer and free from the negative effects of smoke or inhalation.

In addition, 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 are leveraging growth trends, such as mergers & acquisitions, product portfolio expansions, and awareness campaigns, to promote new products.

For instance, in May 2022, Philip Morris International acquired Swedish Match AB 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. 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 synthetic nicotine segment accounted for the largest share of around 98.0% of the global revenue in 2021. 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 from 2022 to 2030. An increasing number of product launches in the synthetic segment is expected to drive industry growth. There are several brands including “NIIN” and “Rush” that are focusing on the expansion of their product portfolio with the launch of synthetic pouches. For instance, in February 2021, the “NIIN” brand launched its 100% tobacco-free synthetic pouches available in various flavors including, citrus chill, wintergreen, cool mint, spearmint, and cinnamon.

Flavor Insights

On the basis of flavor, the industry has been further categorized into flavored and original/unflavored. The flavored segment accounted for the largest share of more than 90.40% of the global revenue in 2021. 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 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 the 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 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 the fastest CAGR during the forecast period. Key players are focusing on introducing new products with unique, original flavors due to high demand. For instance, On! brands offer an original flavor that provides an alternative to traditional tobacco products. These original flavored products contain a special blend of nicotine bitartrate dihydrate, microcrystalline cellulose, flavor, sodium carbonates, and binders. Such product offerings are likely to boost the segment growth during the forecast period.

Strength Insights

On the basis of strength, the industry has been further segmented into light, normal, strong, and extra strong. The strong strength segment accounted for the largest share of more than 43.20% in 2021. There is a multitude of factors that can affect how strong a nicotine pouch effect is on a user. Factors, such as individual differences, moisture content, pH levels, and even flavoring, can influence the strength of the product. Key brands offer strong strength due to growing demand. Some of the products popular for strong strength 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 the fastest CAGR over the forecast period. Moderate tobacco users and those who have a lower tolerance to the effects of nicotine prefer tobacco pouches with a regular strength type. However, the availability of a variety of flavors and strength levels that allow customers to choose products tailored to their individual needs and expectations 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 the segment growth.

Distribution Channel Insights

On the basis of distribution channels, the industry has been further segmented into offline and online. The offline segment dominated the industry in 2021 and for a share of more than 94% of the global revenue. The increasing availability of nicotine pouches in various flavors through supermarkets/hypermarkets, pharmacy & drug stores, 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. offer 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.

The online distribution channel segment is anticipated to register the fastest CAGR over the forecast period. Increasing third-party retailer platforms, and availability of products directly from brands’ websites are some of the key factors determining the segment growth. New entrants in the industry are preferring 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

On the basis of geographies, the industry has been further divided into Europe, North America, Asia Pacific, Central & South America, and Middle East & Africa. In 2021, Europe dominated the overall industry and accounted for the maximum share of more than 49.70% of the global revenue. The regional market is driven by the increasing consumption of oral tobacco-free products over flammable cigarettes. The manufacturers 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 Asia Pacific is estimated to register the second-fastest growth rate during the forecast period. Rapid urbanization, per capita income, and attractive marketing strategies adopted by global players are set to propel market growth in the 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.

Key Companies & Market Share Insights

The industry is characterized by the presence of some large-scale multinational companies. Leading manufacturers hold a significant industry 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 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 decided 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 Segmentation

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

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

  • Tobacco-derived

  • Synthetic

• Flavor 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

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

  • Offline

  • Online

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

  • North America

    • U.S.

  • Europe

    • Germany

    • U.K.

    • France

    • Scandinavia

  • Asia Pacific

    • China

    • India

    • Indonesia

  • Central & South America

    • Brazil

  • Middle East & Africa

    • Saudi Arabia