Beaverton, Ore.-based Plaid Pantry, with 107 convenience stores in the Pacific Northwest, was an early adopter in the nicotine pouch space, and today it dedicates a large amount of backbar space to the growing segment.
The chain is anticipating strong nicotine pouch growth year over year in 2025. Traditional smokeless sales, however, haven’t been driving the same level of success.
“In the Pacific Northwest, chewing tobacco and snuff continues its consistent decline year over year,” explained Jon Manuyag, director of marketing, Plaid Pantry. “Consumers in the smokeless categories are shifting more towards the modern oral nicotine pouches like ZYN, ON!, Rogue, Velo and Grizzly. That is the segment where we see the most consistent positive double-digit trends.”
Weigel’s, with 85 stores in Tennessee, is seeing similar trends in the smokeless category at its locations.
“Traditional smokeless is flat for us, and smokeless alternatives are up double digits,” said Jessica Starnes, director of loyalty and tobacco category manager, Weigel’s. “We are seeing the most growth in the nicotine pouches, and we are leaning into dedicating more space to nicotine pouches.”
Among its backbar display, Weigel’s is carrying six Black Buffalo items that have been successful for the chain. “They are performing well and fit that niche customer between traditional snuff and nicotine pouches,” Starnes added.
Overall, Starnes sees smokeless customers demanding variety, multican discounts and good in-stock consistency from the category.
Starnes and Manuyag’s observations are in line with industry trends.
Goldman Sachs’ Q1 Nicotine Nuggets survey representing approximately 48,000 retail locations across the U.S. concurred that smokeless nicotine volume growth continued in Q1, led by modern oral nicotine brands ZYN and Rogue. Respondents were positive about the category going forward, expecting strong sales increases in 2025.
“Oral nicotine pouches are seeing higher promotions as manufacturers rush to gain market share, given the category’s high growth,” according to the survey.
Furthermore, respondents expect to increase shelf space for nicotine products overall by 0.9%, up from 0.4% in January. “It’s important to note that the incremental lift to the broader category is driven by increasingly positive sentiment for nicotine pouches,” the survey noted.
Chicago-based research firm Circana found that the smokeless category overall grew 12.3% in dollar sales and 8% in unit sales in the convenience channel for the 52 weeks ending April 20. Snuff fell 5.6% in dollar sales and dropped 9.3% in unit sales, while chewing tobacco declined 6.9% in dollar sales and decreased 7.5% in unit sales. Meanwhile, spitless tobacco grew 48.9% in dollar sales and 33.6% in unit sales, while chewing tobacco alternatives were up 29.4% in dollar sales and 19.8% in unit sales for the same period.
As the popularity of nicotine pouches has grown, however, Manuyag noted there’s been additional pressure on the category. Over the past six months, Plaid Pantry has seen supply chain issues from large nicotine pouch manufactures due to the increase in demand.
“We continue to lose a little bit of market share as more retail outlets put more focus and attention on this segment,” Manuyag said. “But, we are still happy to capture a large share of our market in the nicotine pouch segment. Nicotine pouch consumers are also a very important customer to our business as these shoppers have high dual and poly usage with other nicotine products. This helps ensure our market baskets are maximized during the customer visit.”
That’s especially important in today’s economy, Manuyag said, given that customer confidence is lower and trips are down overall at retail.
Goldman Sachs noted in its Q1 Nicotine Nuggets survey that it is “incrementally cautious on the U.S. tobacco/nicotine industry in the near term given increased pressure on the tobacco consumer from persistent inflation, pressure on discretionary incomes and tighter regulations, all of which are driving lower usage of cigs and further downtrading.”
E-cigarettes and nicotine pouches, however, have benefitted the most from downtrading as competition “intensifies for value-seeking customers,” according to the survey.
Manuyag has seen the trend playing out in his stores, with cigarette customers trading down and “definitely open and looking for alternatives” when it comes to their nicotine fix. “Modern oral nicotine pouches and vape are all key contributors with consumers switching on preference,” he added.
Smokeless customers at Plaid Pantry are increasingly seeking promotional deals as well as flavor options in nicotine pouches and alternatives that help them quit smoking. Some of the customers are also seeking higher nicotine strength. In addition to the usual 3 milligram (mg)/4 mg and 6 mg/8 mg choices, Manuyag noted that other brands are offering “mg content north of 9, 12, 15 mg-plus as a point of difference.” The majority of sales are still coming from the 6 mg products at Plaid Pantry, he added.
Vape Sales
In the vape segment, Weigel’s is observing a continued decline for 2025.
At U.S. c-stores for the 52 weeks ending April 20, Circana found that dollar sales of electronic smoking devices fell 9.8% with units down 12%.
Plaid Pantry is noticing declines in vape this year at its locations, as well. “Economic pressures in consumer spend could be some contributing factors to this due to higher price points,” Manuyag said.
Starnes noted that this category is still the “wild wild west” due to the illicit vape market.
The illicit disposable e-cigarette market is an ongoing concern for the market “with retailers downbeat on their outlook,” according to Goldman Sachs’ Nicotine Nuggets survey.
“E-cigarette volumes decelerated, reflecting the rising popularity of illicit disposable flavored e-cigs, much of which is not reported, and a growing concern for the Food and Drug Administration (FDA) and category,” according to the survey. The survey further noted that only 10% of retailers report easing illicit e-cigarette headwinds, compared to 17% in January. While FDA enforcement is said to be underway, most retailers report that progress is slow and “not enough to make a meaningful impact.”
“While more retailers indicated no change, the baseline is that the illicit market continues to pressure business,” the survey said.
Legislative Watch
On the legislative front, Plaid Pantry is grappling with potential flavor bans.
“Currently, the state of Oregon is reviewing a full statewide ban on flavored tobacco products on this year’s Oregon legislative session,” Manuyag said. “We also continue to contest cases from our large county municipalities in Oregon trying to push efforts to ban flavored tobacco and nicotine products from the retail environment at a county level.”
David Spross, executive director of the National Association of Tobacco Outlets, noted about 10 states are currently considering banning flavors in all tobacco products including smokeless. “The biggest threat is Oregon, which is considering passing a flavor ban regulation similar to the California flavor ban,” he said.
When it comes to smokeless legislation, in addition to proposed flavor bans, excise taxation is the other big issue for retailers to have on their radar.
“In most states, nicotine pouches do not fit any of the tobacco product taxing definitions, therefore states are considering taxation,” Spross said. “The amount of the taxation proposals primarily are drafted either equalizing the tax to cigarettes or implementing a low and specific rate that recognizes the relative risk of these products compared to combustible products.”
On the vape front, Spross noted the biggest issue to watch is the Premarket Tobacco Product Application (PMTA) process at FDA’s Center for Tobacco Products (CTP) and whether more applications will be processed.
Following the Trump administration’s shakeup of the CTP in March with layoffs that included the ouster of CTP Director Brian King, the industry waits to see what lies ahead. That includes questions such as whether additional marketing granted orders will be added to the 34 vapor products currently authorized by the FDA. Many in the industry see an opportunity for a new path forward.
“The removal of Brian King from a position of leadership impacting millions of Americans is the first step in correcting the broken mindset that has crippled the FDA and the CTP over the past four years,” the Vapor Technology Association said in a statement. “The next step is fixing the broken regulation that allowed CTP, under King’s leadership, to make politically motivated decisions that have done nothing to save the 480,000 Americans who die from smoking every year.”
“With the changes at FDA, there is an opportunity for FDA/CTP to reset and streamline its operations,” Spross said. “Rather than focus on banning certain tobacco products, the agency should implement more effective tobacco harm reduction policies by authorizing more non-combusted nicotine products to provide adult smokers with expanded choices and by educating smokers about the continuum of risk.”
Since the changes at CTP, there have not been any significant developments on PMTA reviews, according to Spross.
“With hundreds of thousands of nicotine product PMTAs still pending before the agency, particularly in the vapor and nicotine pouch space, FDA has an opportunity to provide adult cigarette consumers with more authorized product choices that potentially present less risk,” Spross said.
Excise taxes and flavor regulation are also on the docket for vape.
“Around 40 states will have adjourned their legislative sessions by June 30; therefore, the industry will have a clearer picture on state excise taxes and regulation. Attention will shift to the local jurisdictions where the primary activity has been in many Massachusetts localities where they are considering implementing a nicotine-free generation, which would ban the sale of all tobacco products — including vapor — to individuals born after a certain date,” Spross said. “Additionally, some localities throughout the U.S. are looking to implement a nicotine cap on vapor products.”
Vape registries are another growing trend at the state level.
“Coming into 2025, there were 10 states that have passed state vapor registries,” Spross said. “In 2025, around an additional 20 states are considering similar legislation.”
So far, three more have been approved in Arkansas, Mississippi and Tennessee, while proposals failed in six states: Georgia, Idaho, Indiana, North Dakota, South Dakota and West Virginia, according to Spross.
Weigel’s is “watching for the vape registry in Tennessee and looking forward to it,” Starnes said.
Finally, as tariffs ramp up, particularly against China, it could potentially help curb the flood of illicit vape products into the market.
“There is a possibility that enforcement could increase if the tariffs result in more inspections at the ports,” Spross explained.
