Nicotine pouches like Zyn and Velo revive tobacco industry as billions flow into US factories
Smoke-free nicotine pouches are projected to move more than US$40 billion worldwide by 2033, drawing over US$1 billion in new US factory investment from Philip Morris, British American Tobacco and Altria. Regulators are split: the US FDA has eased rules and cleared reduced-risk claims for Zyn, while France banned the products and the WHO wants tighter controls.
Nicotine pouches drive tobacco industry's shift away from cigarettes
The tobacco industry has found a new growth engine to offset falling cigarette sales, and investors are already backing the change. Nicotine pouches — small sachets placed between the gum and cheek — are expected to move more than US$40 billion worldwide by 2033, according to the Brazilian outlet Exame, citing a projection from consultancy Grand View Research and sources consulted by the New York Times. In 2025 alone, roughly US$6.9 billion changed hands.
To keep pace with that expansion, the leading manufacturers have announced more than US$1 billion in investment in new factories in the United States, concentrating production close to the world's largest market for the product.
Zyn leads a crowded field
The clear leader is Zyn, a brand owned by Swedish Match and controlled by Philip Morris International. According to CFRA senior analyst Garrett Nelson, the company held 61% of the US retail nicotine pouch market by value and about 56% by volume in the first quarter. "They are now seen as growth companies, and there is a lot of optimism around products like Zyn and IQOS, as well as other smoke-free products," Nelson said. Philip Morris has nearly doubled its share price over the past two years on the back of Zyn, even though most of its revenue still comes from cigarettes. Its stock is up 17.15% in 2026 and 5.67% over the past 12 months.
Rivals are expanding fast. Reynolds American, a British American Tobacco subsidiary and owner of Camel, has increased output of its Velo pouches at plants in North Carolina and Tennessee. Spokesperson Luis Pinto said the company has created about 1,000 US jobs over two years — most tied to this segment — and plans to invest US$3.2 billion by 2030 in new nicotine products, with pouches as its main bet. Altria, maker of Marlboro, entered with its on! and on! PLUS brands, produced in Richmond, Virginia, after US regulators authorized new products in December.
Billions in factory investment
Smaller players are joining too. Swisher, long known for cigars, announced a US$135 million expansion at its Florida plant, expected to create at least 240 jobs, while Sweden's WiJo is investing US$13 million to build its first North American factory. The deal-making behind the sector runs deeper: Altria bought Helix Sweden in 2019, and Philip Morris paid US$16 billion for Swedish Match in 2022.
Regulators split on the risks
US policy has turned favorable. In May, the Food and Drug Administration eased rules for nicotine pouches and e-cigarettes, and in late June it authorized Zyn products to be marketed with claims of lower cancer and disease risk than conventional cigarettes. Health Secretary Robert F. Kennedy Jr. has publicly called pouches one of the safest ways to consume nicotine.
Elsewhere the picture is different. The World Health Organization and the American Lung Association want tighter rules, citing dependency risk and appeal to younger users. In April, France banned the products, triggering trade friction with Sweden. Sven Jordt, a Duke University School of Medicine professor and member of the FDA's tobacco advisory committee, warned about rising nicotine concentrations in stronger versions such as Zyn Ultra, Grizzly and Velo Plus. Philip Morris rejects claims that it targets teenagers; spokesperson Sam Dashiell said the strategy is to reach the roughly 25 million American adults who still smoke.
