Philip Morris invests heavily to expand Zyn production amid rising popularity

In the United States, Zyn, a brand of nicotine pouches manufactured by Swedish Match, has gained significant traction in the market. The FDA recently authorized 20 Zyn products for marketing, determining that they contain substantially lower harmful constituents than traditional cigarettes and most smokeless tobacco products. This decision allowed Zyn to continue sales while awaiting FDA review, representing a shift towards a harm-reduction approach in nicotine consumption. Research scientist Meghan Morean acknowledged that while it's progress, nicotine itself still poses risks. Philip Morris International, which acquired Swedish Match in a major $16 billion deal in 2022, is capitalizing on this surge in demand. It is estimated that Zyn shipped 238 million cans in the U.S. in 2022, with projections indicating that numbers could more than double by 2024. The company aims to transition its business model, targeting that two-thirds of its revenue will come from smoke-free products by 2030, and ultimately a complete pivot to non-combustible offerings. To support this ambitious transformation, Philip Morris International announced substantial investments, including $600 million to construct a new Zyn production facility in Aurora, Colorado, and an additional $232 million to expand existing production capabilities in Owensboro, Kentucky. This strategic move is not only about increasing production capacity but also about enhancing profitability as demand for smokeless products rises. As nicotine consumption trends evolve, Philip Morris sees Zyn as a crucial component of its future business strategy, aligning with public health trends that favor reduced-risk products. Analysts and investors are watching closely as the company emphasizes its growing portfolio of smoke-free alternatives, indicating potential for stronger revenue growth and improved profit margins in the years ahead.