“Nicotine itself does not cause cancer; there’s no evidence that it’s carcinogenic. It may, in fact, have some health benefits. It’s clearly addictive, but it may have other health benefits. We have an NIH study that shows it reduces the onset of Alzheimer’s and dementia. It’s infinitely preferable to smoking. I think nicotine pouches are probably the safest way to consume nicotine. Vapes are second. But the thing we really want to get away from is cigarettes.” - Robert F. Kennedy Jr.
The hype surrounding nicotine pouches continues to grow just as quickly as units fly off the shelves. When the United States Secretary of Health and Human Services sings praise for the product category, it becomes easier to imagine the regulatory landscape changing in incredibly favorable ways. Further fueling the fire are comments made by Philip Morris International’s CEO, Jacek Olczak, during the Barclays 18th Annual Global Consumer Staples Conference (emphasis added in bold):
I just want to remind everyone that all smoke-free is extremely exciting and oral, which is oral category, especially pouches, right, nicotine pouches are extremely exciting because this is like a new thing on the block. But U.S., which is the most developed nicotine pouch market, I mean, the total nicotine pouches market in the U.S., it's say, 6%, maybe 7%, depends what statistics you start using. I think a big question is what is happening to the 94% of the market, okay?
And if you remember from one of our presentations before, we said from a data we had on ZYN and is taking from oral, the classical oral, which is relatively logical and obvious, but it's taking from a vape, it's taking from a cigarette. So I'm trying -- also at PMI, obviously, you need to focus on what you have with the 6% category today. But the big question is, can category be 12%, 24% or 48% because that's the prospect. I think direction which this category is showing that people consider oral vis-a-vis inhalables, including combustibles inhalables, is extremely highly encouraged. I mean, we have a few markets in international. I'm not talking Nordics, which was the whole tradition, which also have a very promising, exciting development. But if I take the U.K., which is presumably in Europe other than Nordics, Sweden, the most developed market, I mean, the barrel has been scratched up to, I don't know, 1.5% of the total market.
But if we see now the insights from the consumers, the level of attractions, the growing awareness, trial and so on, I think more exciting is what is left, what is not still in the category, what is in the category. I understand you need to build your base and hold you -- build your positions from what you have today. But I think the smoke-free in general is the phenomenal opportunity which happened in front of this industry. And you can put, obviously, Philip Morris as the leader into this whole thing. But I think the industry is on the path for growth as long as you really start following the consumer, which is a smoke-free product and also understand one thing that the products that we have today, whether IQOS heat-not-burn or e-vape, which has its own problems, challenges or pouches, 5, 10 years from now may look completely different.
“5, 10 years from now may look completely different.” I couldn’t agree more. Looking out a decade, no one can know what’s in store. Yet, when it comes to nicotine pouches, the smallest yet fastest growing of next-gen nicotine product categories, there are compelling signals to consider for what may unfold near-term in the US.