Nicotine sachets: a growth lever under pressure for Philip Morris

Philip Morris International announced on April 22, 2026, a downward revision of its annual profit forecast, despite quarterly results exceeding expectations.[1]. This announcement is primarily due to regulatory uncertainties surrounding Zyn nicotine sachets and increased competition in this strategic segment. While these difficulties illustrate the limitations of developing so-called "smoke-free" products, they do not, however, call into question a business model that remains largely supported by tobacco products.

The development of product diversification but a strategic slowdown on nicotine sachets

In the first quarter of 2026, Philip Morris posted revenues of $10.15 billion, exceeding analysts' expectations, driven in particular by the international growth of its "smoke-free" products. At the same time, the group lowered its annual earnings forecast, now anticipating earnings per share of between $8.36 and $8.51, compared to a slightly higher estimate previously.

This readjustment is largely explained by difficulties encountered in the US nicotine pouch market. Volumes of the Zyn brand have declined by more than 20%, due to both inventory adjustments and regulatory delays related to the Food and Drug Administration's approval of new variants. These delays stem in particular from authorities' concerns about the risk of initiation among young people and non-users, in a context where these products are experiencing rapid distribution.

These tensions only affect a specific segment of Philip Morris's portfolio, whose revenues continue to rely mainly on tobacco products, while "smoke-free" products are still largely dominated by heated tobacco (IQOS), and not by nicotine pouches.

A diversification whose objective is to consolidate the tobacco business model, but not to transform it

Putting this into perspective with the data from a recent report by Profundo[2] This leads to a significant reassessment of the industry's rhetoric about a "smoke-free future." In reality, combustible tobacco products remain central to Philip Morris International's business model, still representing over 60 million metric tons of its revenue in 2024, while non-heated tobacco nicotine products constitute only a residual segment, estimated at around 91 million metric tons. This revenue structure highlights a significant gap between the group's strategic communication and the reality of its operations.

Beyond the specific case of Philip Morris, the report highlights that the nicotine industry remains dominated by a small number of multinational tobacco companies, foremost among them Philip Morris and British American Tobacco, which concentrate the bulk of international investment flows and financing. This financial concentration and oligopolistic structure give these players the power to try to steer market developments according to their interests, by integrating new products into a comprehensive strategy of controlled diversification.

In this context, the development of nicotine sachets cannot be analyzed as a simple alternative to tobacco products, but rather as a tool for expanding the nicotine market. Their rapid spread, supported by intensive marketing strategies and a strong presence in digital environments, is part of a strategy to renew customer bases, aiming to compensate for the structural decline in smoking. Faced with these challenges, several European countries are considering or have already implemented bans on these products. This regulatory development comes at a time when manufacturers, foremost among them Philip Morris International, are intensifying their marketing strategies to support the growth of these new segments. Massive promotional campaigns, including free distribution and a strong presence on social media, explicitly aim to capture new audiences, particularly young adults and non-smokers, in order to offset the continued decline in smoking.

The observed "regulatory tensions," particularly in the United States, are therefore not an anomaly but rather a reflection of increasing public oversight of these market expansion strategies. They highlight the risks associated with these products in terms of initiating and normalizing nicotine consumption. They reveal the role of public health actors, who possess the capacity to resist the development of a commercial strategy whose health consequences already constitute major public health challenges.

©Generation Without Tobacco

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[1] Neil J Kanatt, Philip Morris trims annual profit forecast amid nicotine pouch uncertainty, Reuters, published on April 22, 2026, accessed the same day

[2] The nicotine market: massive financialization serving an industrial oligopoly, Tobacco-Free Generation, published on April 15, 2026, accessed on April 23, 2026