US Oral Nicotine Pouches: Decoding The Two-Billion-Dollar Profit Opportunity

Research evidence excerpt

US Oral Nicotine Pouches: Decoding The Two-Billion-Dollar Profit Opportunity

EUROPE | Tobacco EquityJuneResearch23, 2026

KEY STOCKS FEATURED INCLUDE:US Oral Nicotine Pouches: Decoding The Two-

TICKER RATING PRICE TARGETBillion-Dollar Profit Opportunity

BATS LN BUY 5,500.00p

US Nicotine Pouches could more than double volumes in the next five years BTI BUY $73.50

as incumbents unleash innovation, recruiting new users from other Nicotine PM HOLD $180.00

categories and growing per capita usage to W. European levels. We see MO UNPF $60.00

BAT as the potential category leader, thanks to its best-in class innovation 2914 JP HOLD ¥6,400

pipeline with proven share gain potential in Europe, and believe its US ONP

business could generate £1.3bn of profits by 2030E, significantly above

Street expectations.

KEY CHANGES INCLUDE:

Proprietary US Oral Nicotine Pouches Model: Growth Only Getting Started. ONPs have TICKER RATING PRICE TARGET

been a key Nicotine volume growth driver in the US, with category volumes expanding 8.9x BATS LN BUY 5,500.00p (5,200.00p)

since 2020. Our proprietary US Nicotine Pouch model suggests the category could grow a

BTI BUY $73.50 ($69.00)

further 2.2x in the next five years, underpinned by 1) total users increasing to 25.2m by 2030E

(vs 15.8m in 2025E) as Nicotine users switch to this next-gen alternative and 2) per capita 2914 JP HOLD ¥6,400 (¥6,200)

consumption increasing from 3.8 pouches/day to 5.3 pouches/day by 2030E, in line with

current Western European levels, as Occasional users' category loyalty gradually increases.

Exhibit 1 - We believe BAT could become the

Is Velo the New ZYN? BAT more than doubled its US ONP volume share, reaching 16.2% in US ONP volume share leader by 2030E, with

2025 (vs 6.7% in 2024).