Sales of cigarettes and e-cigarettes have declined in the last two weeks, while sales of oral nicotine pouches have seen significant growth, according to analysts at TD Cowen.
They write in a research note that cigarette volumes across multiple channels were down 10 percent in the two weeks ending Jan. 13, a steeper decline than the trailing four weeks and 12 weeks.
Bonnie Herzog, managing director at Goldman Sachs, remains cautious on the U.S. tobacco/nicotine industry in the near term as the tobacco consumer remains under substantial financial pressure.
She stated in an emailed outlook that many consumers are being more selective in their purchases and turning to more affordable alternatives, such as 4th tier/deep discount cigarettes, modern oral tobacco and, increasingly, illicit or gray market disposable vapor products.
“Shifts in category and consumer spending dynamics have been further exacerbated by flavor ban momentum at the state and federal level (with a final rule expected in March) and uncertainty with regard to the future of the e-cig category and category innovation (with FDA PMTA reviews still pending on big market brands such as JUUL and VUSE Alto, as well as menthol variants more broadly),” Herzog wrote.
E-cigarette sales fell 11.3 percent in the two-week period and 10.7 percent in the four-week period, according to Barron’s.
Sales of smokeless tobacco, including nicotine pouches, meanwhile grew 12.1 percent in the two-week period and 13 percent in the four-week period.
The smokeless category continues to show strong dollar sales growth driven by the Zyn brand, the analysts say.