Philip Morris International is investing $232 million to expand production capacity for ZYN nicotine pouches at its Owensboro, Kentucky plant in response to strong demand. This investment is part of PMI’s efforts to provide alternatives to traditional tobacco products, following their $16 billion acquisition of ZYN-parent Swedish Match in 2022. The expansion of the Kentucky facility is expected to be completed by the second quarter of 2025, with operations running 24/7 starting in the fourth quarter of this year.
Shipment growth of ZYN slowed to 54% in the second quarter due to supply chain constraints created by increased demand for the product. Concerns were raised about illicit sales of ZYN during a conference call in July, and PMI also temporarily suspended online sales in the U.S. following a subpoena from the District of Columbia regarding compliance with a flavored tobacco ban.
Despite these challenges, PMI remains committed to expanding the production capacity for ZYN to meet consumer demand. The company expects the expansion to provide around 900 million cans of capacity for ZYN by 2025. With the increasing popularity of nicotine pouches as an alternative to traditional tobacco products, PMI’s investments in ZYN production reflect their strategic focus on offering a diverse range of tobacco alternatives in response to changing consumer preferences and regulatory environments.
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