VELO's market share in the U.S. rose to 7.9%, while ZYN fell to 55%.

March 2025: VELO reached 10% share in the US, driven by the Velo Plus launch

According to the latest NielsenIQ report (for the week ending Feburary 22, 2025), 4-week rolling VELO volume grew +185.0% year-on-year basis in the USA to reach 7.9% national share. VELO’s implied share in the most recent week is around 10% – in line with the VELO-owner, Reynold American’s parent company, British American Tobacco (BAT)’s earlier statements. The growth is driven by the consumer uptake and retail expansion of VELO Plus whose national share reached 5.4% in the most recent week – only 12 weeks after launch. VELO Plus comes with a larger, softer and “wet” (i.e. higher moisture content) pouches as opposed to the “dry” ZYN and VELO (regular) pouches.

Meanwhile, according to NielsenIQ, the distant category-leader, ZYN continues to lose ground with only +13.2% growth year-on-year basis and its category share dipping towards the 55% level. ZYN-owner, Philip Morris International claims that its category volume is 10pp above the NielsenIQ read (i.e. around 65% based on the Circana data) and ZYN is growing faster than the overall nicotine pouch category in the U.S. (i.e. gaining category share).

Feburary 2025: BAT provides update on the VELO PLUS launch in the US

Launched in December 2024, VELO Plus expands the VELO portfolio to a broad range of flavors – including Mint, Spearmint, Peppermint, Wintergreen, Wild Berry, Citrus Chill – and nicotine levels (3mg, 6mg, 7mg) in the USA. VELO Plus pouches are larger, softer and “wet” (higher moisture content) as opposed to the “dry” ZYN and VELO (regular) pouches.

VELO-owner, Reynold American’s parent company, British American Tobacco (BAT) states that strong VELO PLUS off-take is an evidence of growing consumer demand & trial and VELO Plus is driving the VELO brand family growth; i.e. a volume increase of +233% in 2024 with total VELO volume share moving above 10% in the nicotine pouch category and Velo Plus accounting for ~70% of the VELO volume in the latest reading (- details of the reading not disclosed). Specifically, in New York (the first activation market), VELO’s share is getting close to 20%, according to BAT.

BAT also notes that the full consumer activation plan is live across retail, media, partnerships and digital platforms. BAT’s VELO Plus communication focuses on the concept of “Weird, but Wonderful”. Weird is used in the sense of “different” as VELO Plus is different than the dominant market-leader, ZYN (wet vs. dry pouch). Wonderful is used in the sense of “more pleasurable” as BAT aims to create a disposition among the American nicotine pouch users that European-style wet pouches are more pleasurable than the dry (ZYN USA) pouches. Meanwhile, ZYN-owner, Philip Morris International states that moist pouches are more appealing to the moist smokelees tobacco (MST, dipping tobacco) users (“dippers”), whereas dry pouches has more appeal among the smokers and vapers.

According to NielsenIQ retail scan data, VELO Plus reaches 3.3% share in the last 4 weeks to January 25, 2025 (i.e. within 8 weeks after launch). VELO Plus retails at US$2.99 for a can of 20 pouches, at a 46.5% disocunt to the Manufacturer Suggested Retail Price (MSRP) of US$5.59 and at a 60% discount to ZYN (US$5.59 for a can of 15 pouches) on price per pouch basis. At this stage, it is hard to judge the balance between the discount-driven product trials and underlying product adoption; thereby, the volume lock-in by VELO Plus when its Retail Selling Price (RSP) is restored back to the MSRP.

BAT aims to expand the VELO Plus distribution from 75k to 110k stores in the USA by April 2025. For reference, ZYN is available in more than 140k stores, on! in 120k stores, VELO is 95k stores and ZONE in 45k stores at the end of 2024.

December 2024: BAT launches VELO Plus in the US

On October 16, 2024, at the Capital Markets Day, British American Tobacco (BAT) announced its plan to launch VELO Plus in the USA by the end 2024. Claiming that VELO Plus is a more competitive product with a wide range of flavors and higher nicotine levels (i.e. 6mg & 9mg for VELO Plus versus 4mg & 7mg for VELO Original), BAT aims to capitalize on the nicotine pouch growth and ZYN-fatigue in the US market while awaiting for the outcome of the PMTA review for the European category leader VELO 2.0 product.

Subsequently, VELO Plus range is launched by Modoral Brands Inc., an operating company of Reynolds American Inc. (London-based British American Tobacco’s U.S. subsidiary), in the US in December 2024.

According to BAT, VELO Plus delivers a superior user experience with more consistent nicotine & flavor delivery, new & improved pouch design (slightly larger pouches made from a stronger, more durable material) and a hinged disposal lid for the easy storage & disposal of used pouches.

Manufacturer’s Suggested Retail Price for VELO Plus is US$5.59 for a can of 20 pouches (i.e. almost at parity to ZYN with 16-pouch can). However, VELO Plus costs US$3.99 a can at regular discount and US$3.35 a can at volume discount.

Unlike VELO Original, VELO Plus contains synthetic nicotine instead of the tobacco-derived nicotine. For further details on synthetic nicotine: Synthetic Nicotine Derivatives. VELO Plus comes in two nicotine strength levels (6mg & 9mg) and seven different flavors:

– Spearmint: A bright mint with a cooling, fresh twist

– Peppermint: A bold mint flavor with a creamy, menthol finish

– Wintergreen: A creamy, subtly sweet, full-bodied mint flavor

– Mint: A fresh, sweet, cooling mint flavor

– Citrus Chill: A blast of fresh citrus with a cooling twist

– Wild Berry: A bold blend of juicy berry flavor

– Dragon Fruit: Sweet and tropical flavor of dragon fruit.

Dragon Fruit is available exclusively at 7-Eleven stores. BAT will add a Smooth Tobacco (unflavored) option to the portfolio in Q1 2025. However, the flavor range for VELO Plus in the initial launch phase is still narrower than VELO Original (- in contradiction to BAT’s Capital Markets Day statement). Therefore, we expect BAT to expand the VELO Plus flavor range significantly in the coming months.

Below is a side-by-side comparison of VELO Original and VELO Plus:

	VELO Original	VELO Plus
Source of nicotine	Tobacco-derived nicotine	Synthetic nicotine
Nicotine strength	4mg & 7mg	6mg & 9mg
Flavor range	10 in total: Wintergreen, Spearmint, Mint, Citrus, Dragon Fruit, Citrus Burst, Peppermint, Cinnamon, Black Cherry, Coffee	7 in total: Spearmint, Peppermint, Wintergreen, Mint, Citrus Chill, Wild Berry, Dragon Fruit
Pouch design	Slim & compact	Slim, but slightly larger
Can design	Standard lid	Hinged disposal lid

source：https://tobaccoinsider.com/velo-plus-usa/

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