Zyn sales surge for Philip Morris International as pouches’ rise resembles vapes’
#Zynning… You know your brand’s big when it becomes a verb. Philip Morris International bought nicotine-pouch brand Zyn in 2022 for $16B; this year PMI expects to sell up to 580M cans of the smokeless stuff. The Marlboro maker’s stock jumped 11% Tuesday to an all-time high after reporting an 8% sales spike for Q3 and raising its guidance. PMI said it’s catching up to sky-high demand from Zynners: it shipped 41% more cans last quarter after investing hundreds of millions into factories that’ll churn Zyn out 24/7.
Smoke’s clearing: Smokeless products, which include heated tobacco devices, now make up nearly 40% of PMI’s revenue, a share that’s grown annually as consumers skip cigs.
Leader: PMI said Zyn has 73% market share for nicotine pouches. At its peak, in 2019, Juul was said to have dominated 75% of the e-cigarettes market.
Do you get déjà vu… Both Juul and Zyn gained traction on social media and caught regulators’ attention as they grabbed market share in booming new categories. Zynfluencers on TikTok have been hyping the “lip pillows” in flavors like “espressino” and “bellini,” raising regulators’ eyebrows. The FDA this spring warned retailers to stop selling flavored Zyn products that could appeal to teens. DC’s attorney general later subpoenaed PMI, requesting info around the company’s compliance with the region’s flavored-tobacco ban.
Murky: PMI calls Zyn “a better alternative than continued smoking.” Nicotine pouches are not on the FDA’s list of recommended nicotine replacements.
No smoke doesn’t mean no fire… After a crackdown fueled by concerns over teens vaping culminated in the FDA issuing a ban on Juul, e-cig sales dropped and Juul lost its market dominance. The number of teens who vape dropped to a decade-low this year, but nicotine pouches — which 1.5% of teens use — are stoking familiar fears. If Zyn has trouble surviving the scrutiny, new competitors are cropping up that could take its place.