I understand the additional costs of phyisical retail. But in Germany we have the rule of same prices for cigarettes, cigarillos, pipe tobacco etc. everywhere. They cost the same at every gas station, convenience store etc. nationwide. A pack of a pack of Marlboro is the same everywhere. It s forbidden to sell Marlboro cigarettes cheaper…
I understand the additional costs of phyisical retail. But in Germany we have the rule of same prices for cigarettes, cigarillos, pipe tobacco etc. everywhere. They cost the same at every gas station, convenience store etc. nationwide. A pack of a pack of Marlboro is the same everywhere. It s forbidden to sell Marlboro cigarettes cheaper at the Internet.
Why should the government not do the same to nicotine pouches?
It s very likely that the government is going to rule for a fixed price for these products too.
As of right now, its online sales cannot be shipped from within Germany, so Haypp sells and ships from Sweden. I know they have also added express shipping options to speed up time to delivery within Germany. Certainly there are risks as specific parties within the EU have taken very different approaches to next-gen nicotine products. But Haypp has highlighted drafted legislation in Germany that would treat the pouch category favorably relative to other product categories. Within the EU, there will also be potential changes from TPD3 and the tobacco excise directive. We'll have to see exactly how that all shakes out.
Also, is the US market (most important) going to have fixed prices? I know they vary a ton here especially by state but also my intuition is that people still don’t order much online
There are no fixed prices in the US. Several brand owners have engaged in discounting and various promotional strategies to spur consumer trial and adoption. It remains to be seen exactly how NGP prices evolve, largely contingent on the extent the FDA authorizes new products. You are correct that online sales are a low % of total NP category sales in the country. Something interest to consider is that, if retail prices were to rise, whether from manufacturers taking prices or excise taxes increasing, consumers would become more price-conscious and would likely transition to online channels at a faster pace.
If I understand slide 9 of their latest presentation correctly, in the US they represent 55% of nicotine pouches online sales and 3% of all nicotine pouches sales. This would imply about 6% of nicotine pouches are sold online in the US.
For comparison, in Norway more than 20% of pouches are sold online, and in Sweden that’s more than 30%.
Correct! So you can have a view on the category growth rate country by country, as well as potential shift from physical to online to determine Haypp's NP trajectory. It only takes a small additional shift to online layered on top of the category growth rate to come up with some fairly radical numbers.
I understand the additional costs of phyisical retail. But in Germany we have the rule of same prices for cigarettes, cigarillos, pipe tobacco etc. everywhere. They cost the same at every gas station, convenience store etc. nationwide. A pack of a pack of Marlboro is the same everywhere. It s forbidden to sell Marlboro cigarettes cheaper at the Internet.
Why should the government not do the same to nicotine pouches?
It s very likely that the government is going to rule for a fixed price for these products too.
As of right now, its online sales cannot be shipped from within Germany, so Haypp sells and ships from Sweden. I know they have also added express shipping options to speed up time to delivery within Germany. Certainly there are risks as specific parties within the EU have taken very different approaches to next-gen nicotine products. But Haypp has highlighted drafted legislation in Germany that would treat the pouch category favorably relative to other product categories. Within the EU, there will also be potential changes from TPD3 and the tobacco excise directive. We'll have to see exactly how that all shakes out.
Also, is the US market (most important) going to have fixed prices? I know they vary a ton here especially by state but also my intuition is that people still don’t order much online
There are no fixed prices in the US. Several brand owners have engaged in discounting and various promotional strategies to spur consumer trial and adoption. It remains to be seen exactly how NGP prices evolve, largely contingent on the extent the FDA authorizes new products. You are correct that online sales are a low % of total NP category sales in the country. Something interest to consider is that, if retail prices were to rise, whether from manufacturers taking prices or excise taxes increasing, consumers would become more price-conscious and would likely transition to online channels at a faster pace.
If I understand slide 9 of their latest presentation correctly, in the US they represent 55% of nicotine pouches online sales and 3% of all nicotine pouches sales. This would imply about 6% of nicotine pouches are sold online in the US.
For comparison, in Norway more than 20% of pouches are sold online, and in Sweden that’s more than 30%.
https://hayppgroup.com/app/uploads/2024/04/Haypp-LD-Micro-FINAL.pdf
Correct! So you can have a view on the category growth rate country by country, as well as potential shift from physical to online to determine Haypp's NP trajectory. It only takes a small additional shift to online layered on top of the category growth rate to come up with some fairly radical numbers.