Philip Morris International will invest $600 million in in a factory in Aurora, Colorado, USA, to help meet U.S. consumers’ ferocious appetite for the company’s Zyn nicotine pouches. The factory is poised to begin operations by the end of next year with regular production starting in 2026.
“PMI and its U.S. affiliates are accelerating their mission to move adults who smoke away from cigarettes in the U.S. by investing in new U.S. manufacturing capacity to meet the increasing demand for nicotine options that are scientifically substantiated as better alternatives,” said PMI Americas President and U.S. CEO Stacey Kennedy in a statement.
“We believe Colorado is likeminded in its commitment to innovation, economic opportunity and public health, and we’re eager to work with the state and its talented workforce as we expand our U.S. manufacturing presence.”
Sales of Zyn jumped 80 percent in the first quarter, leaving PMI struggling to keep up with demand. Retail stores have been experiencing Zyn shortages, with some even limiting the number of cans customers can buy each month.
Supply was further constrained after the company decided to halt online sales nationwide in June following a subpoena in the District of Columbia asking for information on the sale of flavored pouch products that are banned there.
PMI is also increasing production of Zyn at its factory in Owensboro, Kentucky. In addition to meeting U.S. demand, the investments will also help create capacity for exports, according to PMI.
Zyn accounted for more than 70 percent of the $8.6 billion nicotine pouch market in 2023, according to Vaping360. Given the relatively young age of the category, there is little brand loyalty, and analysts believe continued supply constraints may prompt some consumers to defect to other brands.