Smoke-free products are “definitely” on the increase.
That’s according to Rich Rizzo, director, shopper insights and analytics for Philip Morris International Inc.’s U.S. businesses (PMI U.S.), who spoke at CSP’s Outlook Leadership event in August.
For a manufacturer or retailer, this is common knowledge, but PMI U.S. is putting numbers against it and looking at the growth over time, Rizzo said. Nicotine pouches are expected to continue as the fastest growing segment in tobacco and are estimated to become roughly 20% of the nicotine pool by 2028, he noted.
Understanding the smokeless consumer, and especially how they relate to nicotine pouches, is something PMI U.S. is exploring, Rizzo said.
“We all know cigarettes are on the decline, and that’s opening up a different conversation with retail than we’ve ever seen before,” he said.
Cigarettes remain the largest nicotine segment, but Rizzo said the question that needs to be answered is: what do legal-age nicotine users want?
“We believe that roughly 35 million legal-age nicotine users are ready for a multi-category nicotine offering,” he said. “Americans like variety and that’s how they’re looking at consuming their nicotine.”
As for people that are exclusive to cigarettes, Rizzo said they are starting to show a “heavy” interest in smoke-free products.
He said today’s dilemma is that not only is there a new world of choice but also of use. Current legal-age nicotine users consume an average of 1.7 categories of nicotine and it is increasing, he added.
Zeroing in on the tobacco company’s nicotine pouch Zyn, Rizzo noted that it is one of the fastest growing brands in convenience.
PMI bought Zyn maker Swedish Match North America in 2022. In January, the Food and Drug Administration issued marketing granted orders to 20 Zyn nicotine pouch products.
The announcement marked the first nicotine pouch product to be authorized by the FDA. The products, each with two nicotine strengths (3 milligram and 6 milligram), include Zyn Chill, Zyn Cinnamon, Zyn Citrus, Zyn Coffee, Zyn Cool Mint, Zyn Menthol, Zyn Peppermint, Zyn Smooth, Zyn Spearmint and Zyn Wintergreen.
The importance of the nicotine pouch trip has gained ground and is nearly as important of a driver as cigarettes and vape, he said.
“The dollar growth in pouches that we’re starting to see is making up for the cigarette dollar losses at retail,” he said.
Nicotine pouch buyers are almost three times as likely to switch retailers than cigarette buyers if out of stock.
When it comes to choice at shelf, legal-age nicotine users feel “bombarded,” Rizzo said.
Legal-age nicotine users are also feeling the pinch of macroeconomic pressures. They are more stretched personally, professionally and financially even at high income levels, Rizzo reported.
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