Is on! the Bright Spot in Altria's Oral Tobacco Portfolio?

Altria Group, Inc.’s MO on! nicotine pouch brand continues to outperform in an increasingly competitive marketplace, serving as a rare growth engine within its oral tobacco segment. While traditional brands like Copenhagen and Skoal posted double-digit volume declines in the first quarter of 2025, on! defied the trend, growing shipments by 18% to 39.3 million cans. This performance highlights the accelerating consumer shift toward nicotine pouches, which now represent 49.1% of the total U.S. oral tobacco category, an increase of 8.7 share points compared with the prior year.

on!’s share of the total oral tobacco market rose to 8.8%, a gain of 1.8 share points year over year and increased its nicotine pouch segment share to 17.9%, up 0.5 share points despite intensifying competition. Notably, Helix, a leading manufacturer of oral nicotine pouches, which manages the on! brand. Helix achieved this growth while raising retail prices and optimizing promotional spending, a clear sign of strengthening brand equity and loyalty among consumers.

Backed by the “It’s On!” campaign, Helix increased consumer impressions of on! by nearly five times compared with the prior year. Brand awareness among current nicotine pouch users rose to more than 60%, marking a 9-percentage point gain from the previous year. Looking ahead, Helix aims to maintain this momentum by broadening the campaign’s reach and deepening brand equity investments across both new and existing retail channels.

In short, on! is not just a growth contributor, the brand is the centerpiece of Altria’s oral tobacco strategy, serving as its primary vehicle for navigating the industry’s shift toward modern nicotine products.

MO Faces Rising Competition in Nicotine Pouches

In the U.S. nicotine pouch category, Philip Morris International PM continues to lead with its flagship brand ZYN. In the first quarter of 2025, Philip Morris’ ZYN shipped more than 200 million cans, representing a 63% increase year over year, driven by robust consumer demand and expanded production capacity. Despite ongoing supply constraints and restocking efforts, Philip Morris maintained ZYN’s dominant retail share, holding more than 70% of category value. 

Turning Point Brands TPB is also expanding rapidly in the nicotine pouch space with its FRE and ALP brands. In the first quarter of 2025, Turning Point Brands reported $22.3 million in modern oral revenues, nearly a tenfold increase from the prior year. Turning Point Brands raised its full-year nicotine pouch sales forecast to $80-$95 million, indicating increased consumer adoption, broader market penetration and expanding commercial initiatives.

MO’s Price Performance, Valuation & Estimates

Shares of Altria have lost 2.6% in the past month compared with the industry’s decline of 0.8%.

From a valuation standpoint, MO trades at a forward price-to-earnings ratio of 10.8X, down from the industry’s average of 15.21X.

The Zacks Consensus Estimate for MO’s 2025 and 2026 earnings implies year-over-year growth of 4.9% and 3.1%, respectively.

Altria currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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