Philip Morris is saying “no” to cigarettes — and it’s paying off
With declining cigarette sales, Philip Morris is embracing a smoke-free future. The controversial tobacco brand saw an 8.3% sales increase in the first quarter, fueled by growing demand for its Zyn nicotine pouches — which saw shipments rise 80% compared to the same period last year — and its IQOS heated tobacco sticks, which experienced a ~21% sales boost in Q1.
- Philip Morris has big plans for diversification, aiming for over half of its revenue to come from non-cigarette products by 2025/2026 — and two-thirds by 2030.
- This contrasts with competitor Altria, which spent over $20B to acquire vape giant Juul, only to face a ban on its products, leading to revenue declines.
Zyn for the win? Philip Morris acquired the Swedish nicotine pouch brand behind Zyn two years ago for $16B — and an aggressive marketing campaign has turned the pouches into an unexpected “performance enhancer.” Now, some lawmakers are calling for a federal crackdown on Zyn, especially given its popularity among teens. But even as pouches become a social media craze, Zyn still lags behind other smoke-free alternatives — with only 1.5% of teens using them last year.
