Smokefree products in the US
Swedish Match delivered impressive growth in 2021, largely due to continued strong demand for ZYN, the market leading brand in the rapidly growing nicotine pouch category. Swedish Match maintained its leading position within chewing tobacco and demonstrated increased sales within moist snuff.
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In the US, Swedish Match sells ZYN, which is the country’s number one brand of nicotine pouches. Longhorn is Swedish Match’s largest moist snuff brand in the US. In the US chewing tobacco category, Swedish Match’s premium brand, America’s Best Chew (formerly Red Man), is the country’s number one selling brand, and Big Duke is the Company’s largest brand within the value price segment. The Company sells its snus products under its General brand. The primary channels of distribution include convenience stores, gas stations, and independent tobacconists. The products are also sold in food stores, through e-commerce, as well as certain other classes of trade.
|Key data||2021||2020||Change, %|
|Operating profit, MSEK||3,352||2,802||20|
|Operating margin, %||49.6||48.2|
|Moist snuff, million cans||129.6||133.3||-3|
|Nicotine pouches, million cans||173.9||114.1||52|
|Chewing tobacco, thousands of pounds (excluding contract manufacturing volumes)||5,244||5,687||-8|
|Market shares1), %||2021||2020||Change, %|
|Chewing tobacco (excluding contract manufacturing volumes)||40.5||40.9||-0.4|
1) Swedish Match volume shares based on MSA distributor shipments, full year 2021 and 2020. Figures for 2020 have been restated to reflect changes in MSA store measurements.
Market development and highlights
The nicotine pouch category in the US has demonstrated impressive growth since it was introduced six years ago, and Swedish Match estimates that the size of the category in 2021 approached 300 million cans, up from approximately 150 million cans in 2020. The growth potential for nicotine pouches is high, as these products appeal to a broad portion of the adult nicotine consuming population who desire a discrete alternative to either cigarettes, e-cigarettes, vape products or smokeless tobacco. Competition remained intense in 2021 as major cigarette manufacturers and others continued to expand their geographic and store footprint for their nicotine pouch portfolios, often accompanied by deep broad-based promotional discount activities. Swedish Match maintained its strong leading position in both the western part of the US as well as in geographical areas outside of the west in which the category is in earlier stages of its development.
- Shipments of ZYN in the US amounted to 173.9 million cans in 2021, up from 114.1 million cans in 2020. The volume growth was attributable to both increased store velocities and an increase in store count. By the end of 2021, ZYN was available in more than 120,000 stores in the US.
- Based on the measure of distributor shipments to retail, ZYN is by far the largest brand in the nicotine pouch category, representing nearly two-thirds of the category volume.1)
- During the year, the Company rolled out its ZYN Menthol and Chill varieties nationally.
Swedish Match estimates the moist snuff category to have declined by approximately 3 percent in volume terms, and amounted to approximately 1.5 billion cans in 2021. The volume decline for the category was impacted by both higher consumer prices and consumer shifts toward modern alternatives like ZYN nicotine pouches. Swedish Match primarily competes in the value priced segments with its Longhorn brand which, after the previous year’s volume growth, experienced a slight decline in 2021. Swedish Match estimates its share within the moist snuff category to be approximately 9 percent in volume terms in 2021.1)
- Swedish Match’s moist snuff shipment volumes measured in number of can equivalents declined by 3 percent in 2021 compared to the prior year. Shipment volumes and consumption for moist snuff products were likely boosted in 2020 when the COVID-19 pandemic brought on changes in consumption and purchasing patterns.
- Swedish Match’s volume share of the pouch segment further improved, reaching more than 9 percent in 2021.1)
- Swedish Match’s volume share of the growing tubs segment improved modestly and amounted to approximately 40 percent in 2021.1)
Following an unusual year of volume growth in 2020, driven by changes in consumer behavior likely impacted by COVID-19, the category declined more than 4 percent in 2021, broadly in-line with its long term historical volume trends. Swedish Match maintained its total category market share of approximately 40 percent in volume terms in 2021. In-line with prior years, the category experienced a shift away from premium products toward the value priced offerings, and in 2021 the value price segment accounted for more than 63 percent of total category volumes.1)
- In 2021, Swedish Match increased its volume share in both the premium and value segments.1)
- Swedish Match represents close to 70 percent of the premium segment in volume terms with its Red Man – America’s Best Chew product portfolio. During 2022, the brand family is transitioning to a new package design using America’s Best Chew branding.1)
- The Big Duke brand is Swedish Match’s best-selling value priced product, and the brand demonstrated a solid share growth within the growing value price segment in 2021.1)
The snus category in the US amounted to approximately 53 million cans in 2021.2) Swedish Match estimates its volume share to be approximately 8 percent, holding the number 3 position in the category.1)
1) Based on MSA distributor shipments, full year 2021.
2) Swedish Match and industry estimates, full year 2021.