British American Tobacco To Launch Synthetic Nicotine Pouches In The US

By: Trademagazin editor Date: 2024. 10. 22. 09:20

British American Tobacco (BAT) will launch a version of its Velo nicotine pouches using synthetic nicotine in the United States.

Smoking alternatives like vapes from big tobacco companies, including BAT, usually contain naturally occurring nicotine derived from the tobacco plant, whereas synthetic nicotine is made in a lab from chemicals.

BAT’s new Velo product, Velo Plus, due to launch in 2025 and offering more nicotine strengths, contained synthetic nicotine – one of the first clear examples of synthetic nicotine use by a big tobacco company.

“Nicotine derived from tobacco and synthetic nicotine, from a chemical point of view, they are the same,” Waterfield told investors at a capital markets event.

He added that BAT would look at other opportunities in synthetic nicotine going forward.

Synthetic Nicotine

Synthetic nicotine began being used more widely in the United States in recent years as a means to avoid a lengthy application process with the US Food and Drug Administration (FDA), which manufacturers were required to undergo in order to market new nicotine products.

It has so far been used mostly by smaller manufacturers of vapes or nicotine pouches, which users insert under the lip to get a buzz.

Initially, the FDA only had authority over naturally occurring nicotine, so manufacturers of synthetic nicotine products did not have to follow the FDA’s application process. The law was changed in April 2022.

Waterfield said that Velo Plus was a product it acquired. An FDA application for the product was submitted by its previous owner before a May 2022 deadline, meaning it can stay on the market while its application is pending, Waterfield said.

FDA Authorisation

The FDA subsequently told Reuters that a pending application is not sufficient for a synthetic nicotine product to be sold in the US, and products on the market without FDA authorisation may be subject to enforcement.

BAT estimates that the size of US industry-wide vape revenues will grow from around £9 billion ($11.7 billion) today to up to £14 billion by 2030, Waterfield said.

It expects US nicotine pouch industry revenues to grow from £1.7 billion to up to £7 billion over the same period.

BAT sees current US combustible tobacco revenue declines of around 9% as “abnormal”, Waterfield said, adding BAT expects US industry revenue growth to settle at around 1% for the rest of the decade.

ESM