British American Tobacco - Modern oral products

Quick Navigation

Jump to content Logo
BAT 2594.15p

Modern oral products

Nicotine pouches placed under the lip so nicotine can be effectively absorbed

Our modern oral nicotine products provide further reduced-risk*† product alternatives.

Our Modern oral products are white in colour and contain high-purity nicotine, water and other high-quality food-grade ingredients, including eucalyptus and pine tree fibres, flavouring and sweeteners.

Originating in Scandinavia, our flagship modern oral brand Velo is now a leading global brand of nicotine pouches. These typically appeal to a broader audience than traditional oral tobacco because of their attractive price positioning.

We are also delivering a step change in modern oral manufacturing. Truly living our ethos, our modern oral factory in Pécs, Hungary, put together a bold plan to implement food industry standards for modern oral manufacturing. This has enabled us to ensure the availability of products that comply with regulations in different countries. With a cross-functional team across quality, production, engineering and EHS teams delivering technical changes and process improvements, Pécs became the first site in BAT’s history to obtain the ISO 22000 certification for food safety standard.

We have also built and recently commissioned a new facility in Trieste, Italy that will further enhance our capabilities and provide additional capacity (in modern oral and THP). In line with the Group's ESG ambitions, Velo plastic cans are being upgraded to use single polymer plastics, with the use of bio-based materials also being trialled achieving International Sustainability and Carbon Certification.

The scientific evidence

Modern oral nicotine pouches are a relatively new product category, which build upon the extensive scientific evidence available for snus. However, Modern oral products are designed to offer adult consumers an improved, tobacco-free reduced-risk*† alternative.

The weight of laboratory chemical studies for Velo, our flagship Modern oral brand, show the pouches produce substantially lower levels of toxicants than is contained in cigarette smoke and lower levels than in snus. The weight of evidence suggests Modern oral nicotine pouches have a profile that is comparable to nicotine replacement therapy products (NRT).

In 2022, results from an innovative cross-sectional clinical studyi of Veloii were published in Biomarkers Journal. The study shows Velo consumers had significantly better results for several indicators linked to smoking-related diseases compared with smokers. In the study, consumers exclusively using Velo for over six months had significant favourable differences in several biomarkers of exposure and biomarkers of potential harm relevant to smoking-related diseases compared to the adults who smoked.

These results are very important for Velo and the Modern oral nicotine product category. They build on the extensive scientific evidence, including epidemiological data, that already exists for snus. The results also add to the weight of evidence that supports our belief that Velo is a reduced-risk*† product for smokers who completely switch from cigarettes as compared to continued smoking.

2022 highlights

2022 was a year of further growth in volume (up 21.7% to 4.0 billion pouches) and value for modern oral with revenue up 45% to £398 million. Excluding the impact of foreign exchange, this was an increase of 46% in 2022.

Traditional oral products

The most common products in traditional oral are largely moist oral tobacco popular in the U.S., with the main brands being Grizzly and Kodiak. These products are less finely ground than another traditional oral product referred to as Swedish-style snus. Both of these traditional oral products are available in loose form, as well as in pre-packed pouches.

We have long sold snus in Sweden and Norway through our Fiedler & Lundgren business, whose brands include Granit and Mocca; and in the U.S. we market snus under the Camel brand. Our American moist snuff products include our flagship Grizzly brand, as well as the premium moist snuff brand Kodiak.

Total revenue increased in 2022 by 8.2% to £1,209 million, underpinned by pricing.

* Based on the weight of evidence and assuming a complete switch from cigarette smoking. These products are not risk free and are addictive.
† Our oral products Grizzly, Camel Snus, Kodiak and Velo, as sold in the US, are subject to FDA regulation and no reduced-risk claims will be made as to these products without agency clearance.
i Azzopardi, D. et al (2022). Assessment of biomarkers of exposure and potential harm, and physiological and subjective health measures in exclusive users of nicotine pouches and current, former and never smokers.
ii The study was conducted using Lyft, since re-branded as Velo.