Euromonitor and Nicotine Pouches: Market Trends Moving Forwards

The Nicotine Pouch Market Dec 23, 2020

Hi Nicotine Freaks,

Merry Christmas!

We're covering a recent interview featuring Euromonitor's Alexandre Loeur during which important considerations for the nicotine pouch industry were discussed. Alexandre manages a lot of the research into beverages and tobacco/nicotine markets for Euromonitor International.

'Next Generation' Product

There is little doubt.

Despite this, there is still a continued lack of public awareness as to what nicotine pouches are - small pouches, comprised of microcrystalline cellulose (wood pulp), flavourings and added nicotine. When placed between the lip and the gum, the pouch delivers nicotine into the bloodstream through the gums. It's as simple as that.

The education aspect around the immense potential for nicotine pouches to positively impact human health in terms of smoking cessation and reducing rates of cardiovascular and respiratory disease need to be emphasised.

A primary USP of nicotine pouches is that they are fundamentally tobacco-free, forming a booming new category of smoking cessation product.

Fresh Air

Market Value

Estimated worldwide sales of nicotine pouches amounted to approximately $800m USD by end of 2020 - many in the industry are now fully in the belief that nicotine pouches are the future growth area.

The growing interest in oral nicotine delivery has strengthened in light of some regulatory pressure facing the vaping industry in the USA. A proportion of that business has naturally shifted toward pouches.

The Impact of COVID-19 on Driving Sales

One of Covid-19's key symptoms appears to be its impact on lungs and respiratory system. This has impacted awareness over protecting the lungs where possible, further driving the public towards non-combustibles and inhalants.

Living situations during lockdowns are changing too. People living with other housemates, family - perhaps in tight surroundings where vaping/smoking is not socially acceptable - is further driving the growth of the oral nicotine pouch market.


Growth Markets

With its size and history of oral tobacco consumption, the US nicotine pouch markets looms above all, at a total of around $500m for 2020.

Scandinavia clearly is the home of this product and has a strong history of oral tobacco use. Further afield there is increasing popularity and growth in the USA, UK, the EU, Pakistan and as far away as Indonesia.

For now, nicotine pouches fall into somewhat of a regulatory grey area. Pouches don't fall into either tobacco or vaping product categories. Advertising has been permitted, with the key focus being that pouches are "tobacco free" allowing some leeway.

Sky's the Limit

How Regulators are Responding - a Look at America

The US Food and Drug Agency - received many PTMAs (Pre-Market-Tobacco Product-Applications) earlier this year, 2020, including from brands and manufacturers seeking trade approval. This expensive and slow process is a considerable hurdle for brands starting out. Until permission is formally granted, firms may continue trading and a decision will be made in due course.

In the EU efforts are largely led by Sweden/Denmark in terms of supporting pouch manufacturing standards and guiding any future regulation. An important point made in this interview was made that overall EU policy may well reflect the outcomes of local regulators in Scandinavia as they make the case in Brussels.

Public Opinion is Key

Transparency with regulators is important towards bringing the public toward a "harm reduction" view of the nicotine pouches. This must be emphasized and appreciated among the public, whose opinion certainly impacts regulatory decision-making.

Brands might consider  exercising some due care in terms of marketing or product branding which could be deemed to being aimed at the young. The interview goes on to suggest this is exactly how vaping received a hit to its reputation due to its perceived association with adolescents.

After Nicotine Where Next?

CBD and cannabis are of course natural growth avenues for the pouch industry as a whole. There are enormous prospects for pouch delivery systems to work for CBD, and I am sure we will be seeing much more of that as time goes on.

A link to the full Euromonitor International interview piece can be found here.

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Timotheos (Tim) Hatzis

China Expert and Business Consultant

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