In 2016, nicotine pouches entered the U.S. market and have taken over as the leading smoking alternative for tobacco-free nicotine in just a few years. According to research by JAMA, nicotine pouch sales were $709,635 in the first six months of 2016 and this skyrocketed to $216,886,819 by the same period in 2020. The data speaks for itself and reveals nicotine pouches to be an emerging market that has lots of potential for growth and development. From a business perspective, this provides an opportunity to examine some of the marketing decisions that help a new product become commercially successful. Read on to learn how to capitalize on such factors.
Nicotine pouch products resemble gum and mint products from a packaging standpoint and employ similar strategies. An article entitled “Gum, Mint Innovation Bubbling” discusses both bottle pack and large pack gum packaging as the new trend consumers want. This is due to the convenience, value, and longevity offered by resealable bulk packages. As a result, the brand name Extra Refreshers launched products in 2019 with 40-count bottles and 120-count standup pouches. Nicotine pouches have followed along with the trend and launched similar packaging styles. A nicotine pouch tin can have 20 or more pouches inside, following the similar bulk approach preferred by consumers.
A public affairs manager for National Confectioners Association said, “Growth is highly dependent on innovation in packaging and flavors.” Mars Inc.’s subsidiary company, Extra Refreshers, expanded its chewing gum product line in 2019 to include flavors like Spearmint, Polar Ice, and Tropical Mist to meet the changing market demands. In this facet, nicotine pouches too are way ahead, with a ton of interesting flavors to satisfy the expanding consumer market. Some of the most popular nicotine pouch flavors include Wintergreen, Cool Mint, and Spearmint – for mint lovers. For those who prefer zesty and fruity flavors, there is Citrus, Cherry, and Dragon Fruit. There are also Coffee and Cinnamon flavors, but there are also unflavored ones too. With such a wide range of flavors, there’s sure to be one for every type of customer.
Nicotine pouches are being made available at prices that compare favorably to other smoking and tobacco alternatives. According to a Prilla blog post on the price of nicotine pouches, it states that it depends on the level of nicotine strength chosen and bulk purchase, as one nicotine pouch can cost as low as $0.22 (some states charge excise taxes on pouches). When compared to smoked tobacco products, an average cigarette in the U.S. costs approximately $0.36. When you add the other inevitable costs associated with smoking, i.e., lighters, lighter fuel, car fresheners – nicotine pouches are clearly the lower costing product.
4. Health Angle
A senior VP from Altria Client Services said, “We believe the scientific evidence in these applications (for nicotine pouches) demonstrates that the marketing of On is appropriate for the protection of public health.” The statement refers to the FDA applications for nicotine pouches, and while these products are not yet FDA-approved, it’s clear the pouch industry is using language suggestive that these are healthy alternatives, calling them a “newer modern oral nicotine product.” Another health angle is by marketing the product by saying “transition of adult smokers to a non-combustible future.” With consumers more concerned about their health amidst the global health crisis, adding a health angle to products will help boost popularity and, eventually, sales.
Business professionals can gain many useful insights from existing products in a parallel market, like gum and mint, and apply the same marketing principles to gain an advantage over competitors. But the basics still apply, like prioritizing customer preferences, like flavors and packaging. The above points are a few things people can learn about marketing from the nicotine pouch market’s approach.
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