British American Tobacco (BAT) announced that it has acquired the nicotine pouch product assets of Dryft Sciences LLC (Dryft), a U.S.-based Modern Oral nicotine product company.
BAT will rebrand Dryft’s U.S. portfolio under its global Modern Oral brand, VELO, and expects to accelerate growth through superior distribution, marketing and channel capabilities.
“We’re proud of the tremendous momentum we’ve built with Dryft and thrilled that our strong product portfolio will now serve to enhance the Velo brand,” said Jason Carignan, President of DRYFT Sciences LLC. “We remain confident that modern oral innovations like Dryft and VELO will continue to find an adult consumer base seeking alternatives to traditional products.”
The enhanced portfolio will include a wider range of nicotine strengths and flavours providing adult nicotine consumers with a greater degree of choice, covering all key consumer preferences. This will significantly strengthen BAT’s portfolio in a fast-growing nicotine category in the U.S.
“The modern oral category in the U.S. is developing rapidly. We are excited to expand the portfolio of Velo products to meet the evolving preferences of adult consumers,” said Guy Meldrum, CEO of Reynolds American Inc. “We are confident that, leveraging our strong in-market execution capability, the new VELO portfolio will contribute to accelerated growth.”
This acquisition follows the acceptance of Dryft’s recent Pre-Market Tobacco Product Application (PMTA) submission for filing by the Food and Drug Administration (FDA).
BAT’s ‘A Better Tomorrow’ Corporate Purpose
This acquisition is a further demonstration of BAT’s continued commitment to its purpose, to build ‘A Better Tomorrow’ by reducing the health impact of its global business, which entails:
- Committing to providing adult consumers with a wide range of enjoyable and less risky products
- Continuing to be clear that combustible cigarettes pose serious health risks, and the only way to avoid these risks is not to start or to quit
- Encouraging those who otherwise continue to smoke, to switch completely to scientifically substantiated, reduced-risk alternatives
- Tracking and sharing progress of its transformation
BAT aims to accelerate the growth of its New Category revenues at a faster rate than its total revenue, reaching £5 billion ($6.5 billion USD) in 2025. BAT has an ambition to reach 50 million consumers of non-combustibles worldwide by 2030. Today, BAT’s non-combustible products are already available in more than 50 countries across the globe.
“Today’s announcement underscores our societal commitment to accelerate our transformation and build A Better Tomorrow. Our multi-category strategy is key to our transformation,” said Jack Bowles, CEO of BAT. “The addition of Dryft to our U.S. Velo brand is a major step forward, further enhancing our successful vaping and oral portfolio.”
The acquisition has been made through Modoral Brands Inc., an indirect, wholly owned subsidiary of BAT’s U.S. subsidiary, Reynolds American Inc.
The expanded U.S. VELO portfolio will now include three nicotine strengths (two milligram, four milligram and seven milligram) in eight new flavours: Wintergreen, Spearmint, Cinnamon, Dragon Fruit, Citrus Burst, Black Cherry, Peppermint and Coffee. These variants complement the existing U.S. VELO portfolio, which is available in two- and four-milligram nicotine strengths in two flavours: Citrus and Mint. None of these products have received FDA clearance to make a claim of modified risk or modified exposure.