If you haven't been paying attention to tobacco companies, you might not recognize the new landscape. On Tuesday, Philip Morris International announced it would invest $600 million to build a new production facility in Colorado for its popular Zyn oral nicotine pouch. The product went viral on social media earlier this year and is currently facing nationwide shortages due to capacity constraints.
The news came on the heels of the announcement earlier this month by Reynolds American, a subsidiary of British American Tobacco , of its new nicotine-free, flavored vapor product, Sensa. The products are just two of many aimed at capturing current and former smokers — and make up for lost cigarette revenue. The alternatives also include heated tobacco and nicotine vapor products, although with the latter, tobacco companies face big competition from vaping companies and the proliferation of illicit vapes.
"If you look broadly across the consumer, people are ...
changing how they consume things, changing the products they use," said Brett Cooper. "Product evolution tends to be a bit slower in tobacco, but it's part of the bigger mosaic of consumers changing what they want." Confronting declining cigarette usage is nothing new for Big Tobacco.
For instance, Philip Morris said cigarette shipment volume fell to 613 billion units in 2023 from 915 billion in 2011 — with an annual decline seen every year for the past decade. PM 1Y mountain Philip Morris' one-year performance Countries a.