Sweden has long been a pioneer in smokeless nicotine products, and nicotine pouches are becoming the crown jewel of this innovative market. With an expanding consumer base, evolving preferences, and a competitive product landscape, nicotine pouches are reshaping how Swedes consume nicotine.

A transformative moment for oral nicotine

As Sweden ushers in the new year, nicotine pouches are on the brink of overtaking traditional snus in market share. This milestone is driven by innovation, shifting consumer preferences, and strong market leadership by brands like Zyn, Velo, and Loop; and online retailers like Snuset.se.

As Sweden ushers in the new year, all eyes are on nicotine pouches, poised to overtake traditional snus in market share. According to recent industry insights, the nicotine pouch category grew to 35.4% of the market in Q2 2024, and forecasts suggest it could surpass traditional snus by Q1 2024 (Nictrack 2024).

Carl Pilo Karth, CEO at Snuset.se, remarks, “Nicotine pouches have reached a pivotal moment. This milestone signals a broader shift in consumer behavior and the adoption of tobacco-free alternatives, even among traditional tobacco users. Nicotine pouches with traditional tobacco flavor and feel are gaining new users from traditional snus.”

An ever-evolving market landscape

The Swedish market for nicotine products has always been diverse, encompassing traditional snus, nicotine pouches, and vapes. Each product has its unique audience and usage context, but nicotine pouches have emerged as a transformative innovation. Unlike traditional snus, which contains tobacco, nicotine pouches are entirely tobacco-free and offer a discreet, flavorful, and convenient way to consume nicotine.

Key growth drivers behind nicotine pouches

The growth of nicotine pouches also highlights a significant decline in smoking rates across Sweden. According to the CAN (2022) report, cigarette consumption has fallen by over 60% in the last two decades, making Sweden one of the least smoking-intensive countries in Europe. This success can be attributed to Sweden’s proactive public health campaigns, strict tobacco regulations, and the widespread availability of innovative smokeless alternatives like nicotine pouches and white snus. The country’s focus on harm reduction rather than prohibition has set a global standard, demonstrating how accessible and less harmful alternatives can drive significant behavioral changes among smokers. This decline correlates strongly with the rise of smokeless alternatives, particularly nicotine pouches.

1. Health Consciousness: Consumers are becoming more aware of the health risks associated with traditional tobacco products. While nicotine pouches are not entirely risk-free, they offer a reduction in harm compared to smoking or even traditional snus. This has been key to their adoption.
2. Flavor Innovation: Nicotine pouches come in a wide variety of flavors, from classic mint to unique combinations like cola and berries. This diversity caters to both seasoned users and new consumers exploring smokeless nicotine options.
3. Convenience and Discretion: The discreet design of nicotine pouches makes them appealing for use in social and professional settings where smoking or using traditional snus might be frowned upon. This aligns with the preferences of younger, urban consumers.
4. Legislative Changes: Strict regulations around tobacco advertising and smoking in public places have also nudged consumers toward alternatives like nicotine pouches. Additionally, these products’ tobacco-free status allows for broader appeal and easier global distribution.

Carl Pilo Karth observes, “Nicotine pouches are redefining consumer expectations with their versatility and innovation. They represent a step forward in aligning consumer desires with modern product design and functionality.”

The competitive landscape: Big players and rising stars

The Swedish market for nicotine pouches is both competitive and rapidly evolving. Velo leads the pack, capturing over 35% of the online market in Sweden (Nictrack 2024). Its success can be attributed to consistent product innovation and a strong brand presence.

Other notable players include Xqs, which has climbed to second place, and Loop, which has faced challenges in retaining its earlier momentum. PMI’s Zyn places itself outside the top three in Sweden, despite being the unchallenged number one in the US(Nictrack 2024).

Consumer Preferences and Trends

The declining smoking rates in Sweden are a testament to the country’s successful shift toward smokeless nicotine options. As reported by CAN (2022), daily smokers now make up less than 5% of the adult population, the lowest rate in Europe. This dramatic decline has been driven by increased awareness of health risks and the availability of alternatives like nicotine pouches and white snus. Note that the high immigration numbers during 2000 and 2100 from countries with high numbers of smokers did not affect the daily smokers in Sweden. This indicates that the Swedish nicotine pouch (yes, it is a Swedish invention) ability to convert smokers into less harmful alternatives works on its own.

Nicotine pouches have found a strong foothold among younger demographics, with significant growth noted in the 18-24 age group. Data from CAN’s 2022 report indicates a sharp rise in usage among high school students, with 22% of surveyed students reporting usage compared to 18% the previous year.

Key consumer trends include:

• Focus on customization: Many users are drawn to the customizable experience offered by nicotine pouches. From flavor options to strength levels, consumers can tailor their choices to suit their preferences.
• Health and wellness considerations: With increasing awareness of health risks, consumers are prioritizing products that align with their wellness goals. While not entirely risk-free, nicotine pouches are often seen as a less harmful alternative to traditional tobacco.
• Accessibility: Online sales platforms, such as Snuset.se, have streamlined adult access to nicotine pouches through innovations in age verification. Their approach includes double age checks at checkout and delivery stages, setting an industry benchmark for compliance and consumer safety. This not only ensures adherence to strict regulations but also builds trust among consumers.

Challenges in the Industry

The effectiveness of age verification has been a significant focus in the industry. According to HSLF-FS 2024:4, stricter regulations were introduced in March 2024, requiring thorough age checks both at the point of sale and upon delivery. Snuset.se has been a pioneer in this area, using double age verification through digital tools such as Mobilt BankID, a secure and widely trusted electronic identification system in Sweden, ensuring compliance with laws and protecting minors from accessing nicotine products. These efforts underscore the industry’s commitment to balancing accessibility with responsibility.

While the growth of nicotine pouches is impressive, the industry faces several hurdles:

1. Regulatory scrutiny: The tobacco and nicotine industry in Sweden operates under strict regulations, including age verification and advertising restrictions. Nicotine pouches, despite being tobacco-free, are not exempt from scrutiny. However, Sweden’s proactive regulatory approach ensures consumer safety while fostering innovation in harm-reduction products.
2. Public Perception: There is ongoing debate about the long-term health impacts of nicotine pouches. Public health campaigns often include nicotine pouches in broader discussions about nicotine dependency, which may influence consumer attitudes.
3. Market Saturation: As more players enter the market, competition intensifies. Established brands must continue innovating to maintain their market share, while new entrants must find unique ways to stand out.

Carl Pilo Karth comments, “Innovation will be the key to sustaining growth in the nicotine pouch category. Brands, as well as retailers, must focus not only on product development but also on building trust and transparency with consumers.” He also highlighted that Snuset.se, as a leading retailer, plays a pivotal role in connecting consumers with these innovative products. Brands must focus not only on product development but also on building trust and transparency with consumers.”

Looking Ahead to 2025

Industry experts predict that the nicotine pouch market will see double-digit growth annually through 2025, driven by increasing global demand for harm-reduction products. Nictrack forecasts that by 2025, exports of Swedish nicotine pouches will grow by 25%, expanding significantly into North America and parts of Asia where smokeless alternatives are gaining traction.

This global demand reflects Sweden’s success in aligning innovation with harm-reduction strategies, providing a model for other countries. Additionally, Sweden’s domestic market could reach a tipping point, with nicotine pouches comprising over 50% of all smokeless nicotine sales. These trends highlight the potential for Swedish innovation to lead the global nicotine market revolution.

The future of nicotine pouches in Sweden appears bright. As the market matures, several trends are likely to shape its trajectory:

1. Global Expansion: Swedish brands, besides Zyn, have the opportunity to export their products to new markets where smokeless nicotine options are gaining interest.
2. Sustainability: Eco-friendly packaging and sustainable sourcing are becoming increasingly important to consumers. Brands that prioritize these aspects will likely gain a competitive edge.
3. Digital Integration: The rise of new e-commerce provides a valuable platform for brands to engage directly with consumers, offering tailored experiences and fostering loyalty.

Carl Pilo Karth sums it up: “The nicotine pouch revolution isn’t just about Sweden. It’s about reshaping how nicotine is consumed globally, with Sweden leading the way.”

Nicotine pouches have not only revolutionized nicotine consumption in Sweden but also set a benchmark for smokeless nicotine products worldwide. With their innovative design, diverse flavors, and alignment with modern consumer values, they are poised to remain a dominant force in the industry.

As Sweden enters 2025, the growth of nicotine pouches signals a broader transformation in the smokeless nicotine market, making it a story worth following closely.

References:

CAN (2022) ‘Den totala konsumtionen av cigaretter och snus i Sverige 2003–2022’.

Nictrack (2024) ‘Nictrack Q2 2024 report’. Available at: https://nictrack.com/.

Snuskuriren (2024) ‘Market insights and competitive analysis Q2 2024’. Available at: https://www.snuset.se/snuskuriren/.

New York Times (2024) ‘What’s That in Your Mouth, Bro?’. Available at: https://www.nytimes.com/2024/10/31/style/zyn-nicotine-pouch-masculinity.html