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US health secretary Robert F Kennedy Jr is not the only fan of nicotine pouches, gum-sized parcels that — say users — pack a punch when nestled between gum and lip. Students, young professionals and sundry others claim it enhances concentration.

Investors are along for the ride. Smokers may be confined to huddles outside pubs, but Big Tobacco can deliver predictable and bountiful returns: British American Tobacco’s shares have outperformed artificial intelligence poster child Nvidia in the past year.

Zyn, with net revenue around $2bn, and fellow products deliver an added boost. The number of smokers has fallen from a third of the global population over the age of 15 at the turn of the century to under a fifth now, says the World Health Organization, so Zyn manufacturer Philip Morris and its peers need to find growth beyond cigarettes.

Like the latter in their Hollywood heyday, pouches have garnered celebrity magic. The Jonas Brothers, a US pop band, are investors in a start-up called @Sesh, and armies of “Zynfluencers” continue to populate social media. Since Philip Morris says it does not pay the latter, that amounts to free marketing.

All of which boosts volumes: Philip Morris aims for smoke-free products, including pouches, to make up two-thirds of revenue by 2030. In the first nine months of the year, they accounted for more than two-fifths of sales and, in 2024, boasted slightly higher gross margins than its traditional tobacco.

This might sound familiar: vapes enjoyed similar attributes, until they didn’t. Altria ended up writing down virtually its entire $12.8bn investment in vape maker Juul after being smoked out by regulatory bans and a flurry of lawsuits.

So far, regulators in the US, the dominant market, are relaxed: the US Food and Drug Administration has authorised marketed products. But European regulators are more jittery. Pouches are banned in Belgium and the Netherlands; France is due to follow suit in April.

More commercial matters weigh, too. Philip Morris wooed consumers with free cans in September, part of an exercise that cost about $100mn in marketing and forgone sales. Giveaways amounted to a single-digit share of its third-quarter shipments; at 9 per cent, say, that would imply 20mn or so cans while other promotions further dent operating margins.

That may be a one-off, prompted by a need to win back consumers after supply issues earlier in the year. But all the big tobacco companies have skin in the pouches game, as do a host of arrivistes. Barriers to entry are low, so the industry may end up stuck in continuing promotional wars. Pouches may be less toxic than cigarettes, but still merit a health warning for investors.

louise.lucas@ft.com

This story has been corrected to reflect that Philip Morris is targeting two-thirds of revenue from smoke-free products by 2030.