%20(1).jpg)
The market for cigarettes might be going up in smoke, but Big Tobacco has new products ready to take their place.
Driving the news: Tobacco giants Philip Morris and Altria both posted revenues last quarter that blew past analyst estimates thanks to booming demand for smoke-free cigarette alternatives like nicotine pouches and heated tobacco sticks.
- Philip Morris, in particular, had a massive Q1, shipping 33.1 billion IQOS heated tobacco sticks — a 20.9% increase from the quarter before.
- Meanwhile, shipments of its ZYN nicotine pouches skyrocketed nearly 80% year over year as usage exploded.
Catch-up: Nicotine pouches are tiny bags that release nicotine and flavourings (but not tobacco) when placed between a user's upper lips and gums. Heated tobacco sticks are exactly what they sound like: tobacco products that are heated, not burned, so as not to smoke.
- Both products have been positioned as tools to help people stop smoking, but have gained loyal fans who continue to use them after they quit, or even use them in addition to smoking.
Why it matters: As the cigarette dies a slow death, smoke-free products like IQOS and ZYN are shaping up to be the new crown jewels for Big Tobacco. But as adoption rapidly picks up, scientists and regulators are still unsure about the scope of potential adverse health effects.
In Canada: IQOS products are available, while Zonnic is the only brand of nicotine pouch approved for sale. The latter product is supposed to be used only to help quit smoking. Obviously, that has not been the case, with the Ministry of Health vowing to crack down on recreational use and use by minors.—QH