Zyn Fights to Stay Popular in US With Rival Nicotine Pouches Luring Customers

Zyn, made by Philip Morris International, and Velo, from British American Tobacco, are battling for market share in nicotine pouches. Photo by Bing Guan /Photographer: Bing Guan/Bloomber

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(Bloomberg) — Consumers like Abdul Jafarawi are threatening to upend Philip Morris International’s hold on the roughly $7 billion US market for nicotine pouches. 

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The 31-year-old started using the company’s Zyn brand a few years ago to boost his energy and focus while working at his family’s Connecticut convenience store.

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Eventually Jafarawi noticed side effects, including severe dry mouth, so he switched to Velo Plus, a competitor made by a unit of British American Tobacco. His symptoms subsided.

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“I was hooked on Zyn,” Jafarawi said, but Velo Plus has been a “godsend.”

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Zyn is crucial to Philip Morris’s pivot away from cigarettes, but its dominance in the fast-growing nicotine pouch category is being threatened by competitors that some consumers say offer a better experience. Moist nicotine pouches such as Velo Plus reduce dry mouth while delivering faster nicotine jolts and flavor. Zyn users need to wet the product first with saliva. 

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Philip Morris has been trying for several years to debut a moist version of Zyn in the US, but it’s been held up by regulators. That’s put the company’s market-leading share in smoke-free products at risk.

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Nicotine pouches are increasingly important for the US tobacco industry because they are driving growth and seen by some health officials as a better alternative to smoking and vaping. About $6.6 billion worth of them were sold in the 12 months through early March, a 20% jump from the previous period, according to NIQ data. Meanwhile, the overall tobacco market, worth roughly $74 billion, is shrinking. 

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Zyn debuted in the US in 2014 as a stripped down alternative to snuff, a finely ground tobacco sold in small round tins. Users place snuff between their gums and lip, and the nicotine is delivered as they spit out excess tobacco juice.

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There isn’t a need to spit when using Zyn because the small white pouches, also sold in a hockey-puck-shaped container, are filled with nicotine salt, flavoring and sweeteners. The mouth stays dry — for some, too dry — and that makes the experience cleaner and easier to do inconspicuously, a draw for younger, legal-age consumers.

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In 2022, Philip Morris acquired Zyn’s parent company, Swedish Match, for $16 billion to help cut its dependency on cigarettes. That acquisition and Zyn’s growth since have investors embracing the company’s move toward smoke-free products, which generate about $17 billion in annual sales that account for about 40% of its total. Aided by that push, Philip Morris’s stock has surged nearly 90% in the last two years.

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But Velo Plus has been gaining in the US since its arrival in 2024 and has captured about 10% of the smokeless category, according to Circana data analyzed by Bloomberg Intelligence. It’s already a formidable competitor in several foreign markets where it’s the top brand.

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Meanwhile, Zyn has experienced a decline in share in recent months, but still has roughly a third of the market, the Circana data shows. Philip Morris doesn’t disclose specific sales by brand, but said in the US last quarter Zyn purchases at retailers rose 10%.