Step aside vapes; it seems that Americans have found a new obsession: Zyn, a nicotine pouch that contains no tobacco, which has seen a remarkable surge in sales over the last year.
On Thursday, Philip Morris International revealed that it delivered approximately 350 million cans of Zyn in 2023, marking an impressive 62% increase from the prior year. While shipments are not an exact reflection of sales, they generally indicate a similar trend in demand.
The company anticipates ongoing growth this year, planning to deliver over 520 million cans, which will enhance its full-year outlook for the Marlboro brand.
Over the past year, Zyn has emerged as a cultural phenomenon, capturing the interest of Gen-Z consumers who have embraced the product as dedicated fans. According to Zyn's official website, the product is specifically designed for adults aged 21 and older who are already users of nicotine.
A company representative stated, “We adhere to legal requirements and go beyond what is mandated by regulations. For instance, we restrict access to our digital platforms to individuals aged 21 and older and do not collaborate with social media influencers in the United States. Additionally, we consistently seek the removal of unsuitable content from the internet.”
A can of Zyn is priced at approximately $5 and includes around 15 pouches available in different flavors. Each pouch contains varying levels of nicotine, which is absorbed through the gums and lips over the course of an hour before being discarded. The US Centers for Disease Control and Prevention warns that nicotine is highly addictive and can negatively impact the development of young people's brains.
Nonetheless, similar to Juul, Zyn's rising popularity and expansion could encounter challenges, especially from the US government.
According to legal requirements, individuals or businesses involved in the production or sale of “non-tobacco nicotine” are obligated to adhere to FDA regulations. These rules stipulate that they cannot sell to anyone under the age of 21, are prohibited from distributing free samples, and are not permitted to assert that their products are less harmful than cigarettes unless they have received explicit authorization from the FDA.
In the previous month, Senate Majority Leader Chuck Schumer called on the Federal Trade Commission and the Food and Drug Administration to look into the marketing practices of Zyn, particularly concerning its appeal to younger audiences.
“At a press conference, Schumer stated, ‘I want to caution parents about the dangers of nicotine pouches, as they appear to target young children and teenagers, utilizing social media to reel them in. Zyn is the next challenge we face.’”
A spokesperson for Phillip Morris International stated that Zyn’s marketing and advertising efforts are exclusively aimed at customers aged 21 and above, and that all promotional materials feature individuals who are 35 years old or older.
Despite experiencing growth, Phillip Morris International's shares fell by 2% in early trading due to a decrease in cigarette demand. Major tobacco companies have been progressively redirecting their attention from traditional cigarettes to smokeless options, such as vapes and "heatsticks," to cater to consumers seeking nicotine alternatives.
In 2022, Phillip Morris International acquired Swedish Match, the producer of Zyn, to facilitate the company's shift towards investing in a greater range of "smoke-free products."
In the earnings announcement, CEO Jacek Olczak revealed that newer products now account for 40% of total revenue, with Iqos heated tobacco products leading the charge and even exceeding the revenue generated by the classic Marlboro brand.
