2FIRSTS | Alan Zhao: What the Rise of Nicotine Pouches Means for Tobacco Retailers

Alan Zhao's article, commissioned by *Retailers for the Future*, analyzes the significant rise of nicotine pouches within the global tobacco alternatives market. Recent results from PMI and BAT show substantial growth in nicotine pouch shipments – 36% for PMI’s ZYN and over 47% for BAT’s Velo – indicating a fundamental shift in industry focus away from traditional combustion. Nicotine pouches offer discreet consumption, expanding usage possibilities beyond restrictions on smoking and vaping. Unlike e-cigarettes, they are structurally simpler, requiring fewer brands for retailers to stock and prioritizing efficiency.

Regulation is a key factor, with debates around packaging, nicotine strength, and long-term health effects, and varying approaches between regions like Spain and Nordic countries. This regulatory uncertainty creates volatility and risk, favoring companies with long-term vision and operational discipline. The article stresses that tobacco companies must move beyond combustible products, and nicotine pouches provide a fast entry point into next-generation nicotine markets.

For retailers, embracing nicotine pouches doesn't require extensive changes; a focused range allows for learning and establishing authority. Consolidation is expected, and the greatest risk lies in inaction. Distributors will see increased channel leverage, and retailers should position themselves proactively before the market fully clarifies.

(Source：2Firsts)