Move over vapes, Americans appear to have a new addiction: Zyn, a tobacco-free nicotine pouch product, that has exploded in sales over the past year.
Philip Morris announced Thursday that it shipped about 350 million cans of Zyn in 2023, a whopping 62 per cent growth compared to the previous year. Shipments typically correlate to sales even if they represent a slightly different measure of demand.
Growth is expected to continue this year with the company looking to ship more than 520 million cans, bolstering the Marlboro maker鈥檚 full-year forecast.
Zyn has become a cultural sensation in the past year, attracting the attention of Gen-Z consumers who have become loyal buyers of the product. It is aimed at adults 21 and up who already use nicotine, according to Zyn鈥檚 .
鈥淲e follow the law and voluntarily do more than regulations require,鈥 a company spokesman said in a statement. 鈥淔or example, we age-gate our digital channels to 21-plus and do not use social media influencers in the US. Beyond that, we regularly request the removal of inappropriate content online.鈥
A can of Zyn costs about US$5 for about 15 pouches (in a variety of flavours) that contain various amounts of nicotine and are absorbed in a person鈥檚 gum and lip over an hour, then spit out. Nicotine is very addictive and can harm young people鈥檚 developing brains, according to the U.S. Centers for Disease Control and Prevention.
However, like Juul, the popularity and growth of Zyn might face difficulties, in particular from U.S. government.
By , anyone who makes or sells 鈥渘on-tobacco nicotine鈥 must comply with FDA regulations, which include not selling to people under 21, not giving away samples and not making claims that their products are less harmful than cigarettes without FDA authorization.
Last month, Senate Majority Leader Chuck Schumer urged the Federal Trade Commission and Food and Drug Administration to investigate Zyn on how it鈥檚 being marketing to young people.
鈥淚鈥檓 delivering a warning to parents, because these nicotine pouches seem to lock their sights on young kids鈥攖eenagers, and even lower鈥攁nd then use the social media to hook them,鈥 Schumer said in a press conference. 鈥淶yn is the next battle.鈥
In response, a Phillip Morris spokesperson said that Zyn鈥檚 鈥渕arketing and advertising are strictly directed鈥 to customers 21 years and older and those materials only include people aged 35 and over.
Despite the growth, shares of Phillip Morris declined 2 per cent in early trading because of lower demand for cigarettes. Big Tobacco has gradually shifted their focus away from cigarettes to smokeless alternatives, like vapes or 鈥渉eatsticks鈥, for people to get their nicotine fix.
In 2022, Phillip Morris bought Zyn-maker Swedish Match to help the company鈥檚 pivot to investing in more 鈥渟moke-free products.鈥
CEO Jacek Olczak said in the earnings release the newer products now encompass 40 per cent of total revenue, led by the growth of Iqos heated tobacco products that have surpassed the traditional Marlboro brand鈥檚 revenue.
鈥淭he fourth quarter also marked the first anniversary of our combination with Swedish Match, which delivered very strong results in 2023 driven by the stellar US performance of Zyn,鈥 Olczak said.
The company said it is spending about US$1 billion this year to invest in bolstering U.S. production of Zyn to meet demand.
CNN鈥檚 Carma Hassan contributed to this report.
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