Nicotine Pouch Market Shifts: Which Tobacco Players Are Winning on Profitability?

The nicotine pouch category has become a defining profit driver for major oral tobacco players, reshaping how earnings are generated across the sector. While traditional oral products continue their decline, companies operating in this modern category are demonstrating that volume growth alone doesn’t tell the complete story—the profit volume ratio matters just as much.

Altria’s Helix Unit: Growing Volume, Steady Pricing Power

Altria Group, Inc. (MO) continues positioning Helix Innovations as its most dynamic growth engine within oral tobacco. Q3 2025 shipments of on! reached 42.2 million cans, contributing to a nine-month total of 133.6 million units—a 14.8% year-over-year increase that outpaced every other oral tobacco segment by a significant margin.

What makes Helix’s trajectory particularly noteworthy is how it balances volume expansion with pricing discipline. While average nicotine pouch prices nationally fell approximately 7%, on! managed to increase retail prices by 1.5% during the same quarter. This spread between category trends and brand performance underscores the profit volume ratio advantage Helix has built through brand strength and product differentiation.

On! retail share of total oral tobacco stood at 8.7% in Q3, essentially flat sequentially, indicating the product has stabilized its market position even as it expands absolute volumes. Beyond on!, Altria rolled out on! PLUS in select markets, introducing premium options across multiple flavor profiles and nicotine strengths to capture higher-margin segments.

The earnings quality contribution deserves emphasis: Helix’s performance helped support adjusted operating income stability and margin expansion despite declining overall segment volumes. This dynamic—growing earnings while total category shrinks—highlights why nicotine pouches have become essential to MO’s profitability narrative.

Philip Morris and Turning Point: Competing Trajectories in Modern Oral

Philip Morris International (PM) demonstrated accelerating momentum with ZYN cans, reporting 36% global shipment growth in Q3 2025. Within the U.S. market specifically, Nielsen data showed ZYN offtake climbing 39%, benefiting from normalized supply availability and expanded commercial support following earlier constraints.

Philip Morris International management emphasized sustained capacity investments and commercial execution to capture rising demand, positioning ZYN as a core franchise within its portfolio.

Turning Point Brands (TPB) delivered the quarter’s most dramatic results, with modern oral segment net sales surging 627.6% year over year to $36.7 million. This category now represents 30.8% of the company’s total revenue, alongside sequential growth of 22%. Management raised full-year modern oral guidance to $125-$130 million and signaled that first U.S. white-pouch production lines should qualify in 2026, indicating serious long-term capacity buildout.

Valuation Lens: Where Altria Trades Relative to Growth

Altria shares have declined 0.8% over the past month, underperforming its industry peer group which gained 1.6%. From a valuation perspective, MO trades at a forward price-to-earnings multiple of 10.36X, below the industry average of 14.47X—a discount that reflects both the traditional tobacco headwind and Helix’s offsetting contribution.

Consensus earnings estimates for 2025 and 2026 project year-over-year growth of 6.3% and 2.3%, respectively, suggesting the market views Helix’s expansion as partially offsetting structural industry pressures rather than as transformative upside.

Altria currently carries a Zacks Rank of #3 (Hold), reflecting the balanced view of analysts assessing legacy tobacco exposure against nicotine pouch opportunity.

The Bigger Picture

The competitive positioning across Altria, Philip Morris, and Turning Point reveals a sector in active transition. The profit volume ratio—how effectively companies convert rising unit sales into expanded margins—has become the critical differentiator. On! pricing power, ZYN’s market share acceleration, and TPB’s margin profile all point toward a category capable of supporting meaningful profitability gains even as older oral tobacco segments contract. Investors tracking this space should monitor which players successfully convert volume growth into durable earnings expansion.