Oral tobacco and nicotine products providing a modern alternative to conventional cigarettes
Our modern and traditional oral tobacco and nicotine products, provide further reduced-risk*† product alternatives.
Oral tobacco and nicotine products are popular in countries such as Sweden, Norway and the U.S, where we have a number of brands.
Products include snus, moist snuff and tobacco-free nicotine pouches all of which are placed under the lip so that the nicotine can be absorbed by the body.
In recent years, a new category of modern oral products has emerged. These come in the form of nicotine pouches that are placed under the lip so that nicotine can be absorbed by the body.
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.
In a fast-moving world that continuously calls for improvement and variety, the demand for innovative oral products continues to grow. Responding to consumer demand, BAT has developed a line of products with different flavours and nicotine levels and has become market leader in this emerging category.
Originating in Scandinavia, Velo is now a leading global brand of nicotine pouches. These typically appeal to a broader audience than traditional oral tobacco, and because of their affordability and lack of batteries, they can be particularly popular in low to middle income countries. For example, our subsidiary in Indonesia has delivered great results from their expansion activities in Jakarta. Following a promising performance in June 2020, the test has been expanded to 5,000 consumers, which is being closely monitored to gain consumer insights.
In 2020, we consolidated our leadership position in Modern Oral outside the US, while strengthening our position in the US with an expanded portfolio. In 2020, total Group volume of 1.9 billion pouches was an increase of 62% on 2019, when volume was 1.2 billion pouches, itself an increase of 188% on 2018.
Our brand consolidation, which will see our modern oral products move to Velo, is set to be complete in 2021.
Today, BAT sells traditional oral products in various forms:
We have long sold snus in Sweden and Norway through our Fiedler & Lundgren business whose brands include Granit and Mocca.
With the acquisition of Reynolds American Inc. (RAI) in July 2017, we significantly increased the size of our oral tobacco and products range with the addition of leading snus and moist snuff brands in the U.S.
The R.J. Reynolds Tobacco Company introduced Camel snus, a premium pouched snus product in 2006 and now markets it nationwide.
Our Camel Snus product is currently undergoing a process with the US FDA to be classified as a modified-risk tobacco product, with the comment period reopening in December 2020 after our filing of additional information. If our application is accepted, we will be able to communicate the health benefits of switching from cigarettes to Camel Snus directly to consumers.
In 2020, volume was marginally lower (down 0.9%) on the prior year (at 8.4 billion stick equivalents), with 2019 0.6% lower than 2018. Total revenue grew by 7.2% to £1,160 million (2019: up 15% to £1,081 million), driven by pricing in both 2020 and 2019, particularly in the US which accounts for 97% of the Group’s revenue from the category
The RAI companies also include the second largest smokeless tobacco manufacturer in the U.S., American Snuff Company, LLC, which offers consumers a range of differentiated oral tobacco products, primarily moist snuff. Its range includes Grizzly, its flagship moist snuff brand and one of the best-selling brands in the category, and the premium moist snuff brand, Kodiak.
RAI companies Niconovum USA, Inc. and Niconovum AB market nicotine replacement therapy products in the United States and Sweden respectively, under the Zonnic brand. Zonnic nicotine replacement therapy gum is available in approximately 40,000 retail outlets across the U.S. In Sweden, Zonnic products include tobacco-free nicotine pouches.