British American Tobacco to launch synthetic nicotine pouches
British American Tobacco (BAT) announced plans to introduce a new version of its Velo nicotine pouches, named Velo Plus, in the United States, utilizing synthetic nicotine. David Waterfield, president of BAT’s U.S. subsidiary Reynolds American, revealed the news during a capital markets event on Wednesday, stating that the product is set to launch in 2025.
Traditionally, smoking alternatives like vapes have relied on naturally occurring nicotine derived from the tobacco plant. However, synthetic nicotine, which is produced in laboratories from chemicals, is gaining traction in the market. Waterfield emphasized that from a chemical standpoint, synthetic and tobacco-derived nicotine are identical.
This launch marks one of the first significant moves by a major tobacco company to incorporate synthetic nicotine, a trend that has been largely adopted by smaller manufacturers to bypass the lengthy FDA approval process that applies to naturally sourced nicotine products. Following regulatory changes in April 2022, the FDA now oversees synthetic nicotine, but Velo Plus benefits from a prior application submitted by its previous owner, allowing it to remain on the market while awaiting approval.
Waterfield noted that BAT is exploring further opportunities in synthetic nicotine, which has gained popularity among consumers for its versatility and ease of use. He projected substantial growth in the U.S. vape market, estimating revenues will rise from approximately £9 billion ($11.7 billion) today to £14 billion by 2030. Similarly, the nicotine pouch sector is anticipated to expand from £1.7 billion to £7 billion in the same timeframe.
Despite a current decline in U.S. combustible tobacco revenues—estimated at around 9%—Waterfield described this trend as “abnormal” and projected a more stable growth rate of approximately 1% for the industry throughout the rest of the decade.
