Navigating Innovation in the Modern Nicotine Market: Insights from my time Leading Dryft Sciences and working with Chemular to help other brand succeed in the market.
The landscape of tobacco products has evolved dramatically over the past decade, with a shift from traditional combustible products to innovative alternatives like nicotine pouches. These new products offer a more discreet, smoke-free, and potentially less harmful way to satisfy nicotine cravings. As someone deeply involved in the modern oral nicotine industry, from my time as founder and President of Dryft Sciences to working closely with dozens of nicotine pouch brands at Chemular, I’ve seen firsthand how this sector has transformed.
After successfully growing Dryft Sciences and establishing a strong presence in the market, I led the sale of the company to British American Tobacco (BAT) in late 2020. This sale marked an important milestone in my journey within the industry, and it provided a broader platform for Dryft’s innovations to thrive globally under the BAT umbrella. Here, I’ll share insights from my experience about what it takes to lead in this fast-changing market.
Understanding the Rapid Growth of the Modern Nicotine Market
When I helped found Dryft Sciences, a spinoff of tobacco distribution giant, Kretek International, I witnessed the market shift firsthand: consumers were increasingly looking for less harmful alternatives to combustible cigarettes and vaping. These evolving consumer preferences led to the advance of modern oral nicotine pouches, a discreet, smoke-free way to enjoy nicotine which was already gaining adoption in Scandinavian countries.
As one of the first five nicotine pouch brands on the U.S. market, Dryft focused on creating a product that would meet regulatory standards but also offered a superior user experience. Our nicotine pouches were available in a variety of unique flavors—like Dragonfruit and Black Cherry—and were packaged in a small, patented, three-part can design that featured a removable section for on-the-go storage. We initially manufactured Dryft in Sweden, but ultimately established our own manufacturing facility in Texas. That strategic move ultimately led to increased production capacity and enabled us to secure nationwide distribution through our partnership with Kretek.
By 2023, U.S. sales of nicotine pouches skyrocketed to an estimated $1.7 billion annually, reflecting growing consumer demand. Zyn, the market leader, currently controls about 65% of the U.S. market share, largely due to its first-mover advantage and smart marketing and distribution. Velo holds around 20%, and On! comes in with 10%. The growth of nicotine pouches continues to explode and a host of new brands have entered the market using synthetic nicotine with aspirations of stealing share from the market leaders.
Consumer Demographics and Market Dynamics
The 25-34 age group is the most significant consumer base for nicotine pouches, with many valuing the discreet, smoke-free experience. Initially, nicotine pouches were targeted mainly at former smokers looking for a healthier alternative to vaping and cigarettes. However, the market has expanded significantly, with nearly 15% of current pouch users having no history of cigarette or vape use.
Historically, the majority of nicotine pouch users have been men, with around 70% of the market. However, this is beginning to shift, with more women turning to nicotine pouches as the products become more mainstream and the marketing strategies evolve. At Dryft, we focused on making our products accessible to all by offering a variety of flavors and nicotine strengths, aiming to appeal to both men and women.
Navigating Complex Regulatory Environments
In my role at Dryft Sciences, one of the most challenging aspects was navigating the evolving regulatory landscape. The FDA has imposed stringent guidelines on the tobacco industry, and keeping up with these regulations requires both expertise and foresight—not to mention a hefty budget and plenty of patience. Any new brand seeking to succeed in the U.S. market must have a superior product and invest heavily in regulatory strategy, scientific research, and product safety.
Demonstrating that nicotine pouches are a less harmful alternative to traditional tobacco products is essential for FDA approval, and it’s an area where significant investment is required. Brands like Zyn, Velo, and On! have invested tens of millions in research to ensure their products meet the highest safety standards and offer potential harm reduction compared to combustible cigarettes and other smokeless products. At Chemular, we help companies navigate the regulatory maze and offer a range of strategic consulting services to help tobacco companies of all sizes.
The Future of Modern Oral Nicotine
Looking ahead, I believe the future of modern oral nicotine products is bright, though the regulatory landscape will continue to evolve globally. With a combination of innovative product development, deep regulatory knowledge, and a proactive approach to market changes, smart brands—and the modern oral nicotine industry as a whole—are poised for continued success.
The companies that strike this balance will not only survive but thrive in a rapidly changing market. I’m proud of the role Dryft Sciences played in shaping the early days of this industry.
