According to a report from Reuters on October 16th, British American Tobacco (BAT) will be launching a nicotine pouch product called Velo Plus in the United States, which uses synthetic nicotine.
The CEO of BAT's US subsidiary Reynolds Tobacco (Reynolds American), David Waterfield, revealed that this new product is expected to be launched in 2025, offering multiple nicotine strengths and containing synthetic nicotine. The launch of Velo Plus marks the first time a major tobacco company has explicitly used synthetic nicotine.
Traditionally, large tobacco companies including BAT produce smoking alternatives such as e-cigarettes, which typically contain nicotine extracted from tobacco plants. Synthetic nicotine, on the other hand, is produced in a laboratory using chemical methods. According to David, from a chemical perspective, natural nicotine and synthetic nicotine are the same. In the future, BAT will explore other opportunities in the synthetic nicotine field.
In recent years, synthetic nicotine has been more widely used in the United States in order to circumvent the lengthy application process of the FDA. Previously, the FDA only had regulatory authority over natural nicotine, so small e-cigarette or nicotine pouch manufacturers did not need to follow the FDA's application process. This law was amended in April 2022.
David also mentioned that Velo Plus is a product acquired by BAT, with its previous owner submitting an FDA application before the deadline in May 2022. This means that the product can continue to be sold during the approval process.
BAT estimates that the revenue of the American e-cigarette market will increase from approximately 9 billion pounds currently to 14 billion pounds by 2030, while the revenue of the nicotine pouch industry will increase from 1.7 billion pounds to 7 billion pounds during the same period.
David stated that the current 9% decline in combustible tobacco revenue in the United States is "abnormal," and he expects that the industry's revenue growth will stabilize at around 1% in the American market over the next ten years.
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