Nicotine pouches have risen to extreme cultural popularity. And they’re also reshaping the future of Philip Morris as a publicly traded company.
What’s happening:
- Philip Morris (NYSE: PM) has seen their share price hit a new all time high driven largely by the breakout success of their Zyn nicotine pouch brand
By the numbers:
- Zyn is now for sale in 30 countries globally, following their most recent expansions into Greece and the Czech Republic
- Zyn shipments grew by 41% in Philip Morris’s most recent quarter, which is still far below the total demand for the product
- Previously, Philip Morris announced they would invest $600M into a new purpose built production facility for Zyn in Colorado to be able to scale up shipments and supply
Why it matters:
- The enormous popularity of Zyn may be a larger shift in behaviour towards smoke-free nicotine consumption and away from traditional cigarettes, as well as a new growing interest from individuals who want to use nicotine pouches to temporarily increase mental acuity and focus
Going deeper:
- Zyn is now widely considered the single most successful smoke-free brand to ever be launched globally
The intrigue:
- Philip Morris has also been making a push to diversify their business interests into new areas including cannabis, notably launching a CBD lozenge recently with Aurora Cannabis (NASDAQ: ACB) for medical patients in Canada
The fine print:
- Zyn nicotine pouches have come under serious regulatory scrutiny, with multiple lawmakers across the United States making a concentrated effort to restrict the product due to its highly addictive nature
- Many critics have also lobbied against Zyn for the perceived risks of making it easier for youth to become addicted to nicotine, despite the fact that you need to be of legal age to purchase Zyn from a retailer
