Can Big Tobacco’s Future Be Driven by Nicotine Pouches Instead of Cigarets?

With their quick growth, alluring profit margins, and, for the time being, less regulation than many competing smoking alternatives, fast-growing nicotine pouches have become one of Big Tobacco’s most significant wagers on a future beyond cigarets.

As cigaret sales decline, investors are increasingly concerned about whether companies like British American Tobacco’s (BATS.L.) opens new tab Velo and Philip Morris International’s (PM.N.) opens new tab Zyn can become a new profit engine and gain wider acceptance outside of Scandinavia and the United States, where oral nicotine products are already common.

However, the industry faces two significant challenges: convincing smokers in markets without an oral nicotine heritage to convert, and maintaining growth as authorities become increasingly worried about marketing strategies and adolescent usage.

According to BAT, demand for pouches is rising in regions like Poland and Britain, and in the first half of 2026, volumes in Asia, the Middle East, and Africa increased by 27.5% to almost 700 million pouches. That is still a small portion of the over 3 billion sold by its businesses in the United States and Europe.

In an interview, BAT CEO Tadeu Marroco stated, “I do believe that this is an engine of growth… that has the potential to replace cigarets in the long run.” He described pouches as less expensive and simpler to use than many smoking alternatives.

At a time when demand for many consumer goods is still muted, pouches—small packets placed under the lip that contain nicotine but no tobacco—are rising faster than vapes and heated tobacco products, attracting investor attention.

According to BAT, industry pouch income will surpass vapes and reach £11 billion ($15 billion) by 2030, from £4 billion in 2025. By then, it anticipates 47 million pouch users, which is slightly more than half of all vape users.