Zyn faces subpoenas and shortages in the US, Chinese brands quickly fill market demand

Zyn faces subpoenas and shortages in the US, Chinese brands quickly fill market demand

As PMI's Zyn brand faces supply shortages and legal issues, many emerging nicotine pouch brands have quickly entered the market, especially those from China, to fill the gap in the market.

 

According to a recent report by Bloomberg, a large number of competitors have entered the market to grab market share under the dual pressure of supply shortages and subpoenas that have led to the suspension of its online sales in the United States.

 

Song Jo, sales manager of California wholesaler Apex Distribution, said at the trade show (Alternative Products Expo) held in Houston last month,

"Since Zyn's current sales are declining and there are manufacturing problems, we hope to strike while the iron is hot."

 

He showcased the nicotine pouch brand named after former professional basketball player Dennis Rodman at the show.

 

According to market research firm Euromonitor International, the US nicotine pouch market reached $6 billion last year and is expected to reach $18 billion by 2027. Zyn sales increased 80% in the first quarter, the company said.

 

However, PMI's decision to suspend online sales nationwide after receiving a subpoena from the District of Columbia has exacerbated supply constraints.

 

This has opened up the market for a host of new nicotine pouch brands, many of which are from China, to fill the gap. Most of these manufacturers have adopted strategies to gain market share in the e-cigarette market.

 

Big tobacco companies are fighting an influx of flavored disposable e-cigarettes made in China and are beginning to take notice of nicotine pouch competitors.

 

Steven Callahan, executive director of Altria Group Inc., said,

 

"You're noticing the growth of illegal e-cigarette devices, and the same is true for nicotine pouches."

 

A PMI spokesman declined to comment on Zyn's competition or whether Zyn is protected by patents.

 

Chris Howard, executive vice president of Swisher International, said the FDA's slowness in authorizing products has led to a surge in illegal e-cigarette sales, and he hopes the same won't happen to nicotine pouches.

 

William Chaw, project manager at Chinese tobacco material maker Granch Biopack, said his company makes nicotine pouches for the "L Vape" brand and plans to launch brands such as "Zombie Nic" and "Pure Zyn" in the United States soon.