Nicotine Pouches Hit 55.7% of Oral Tobacco: Where Does Altria Stand?

Altria Group, Inc. (MO) is facing a pivotal moment as nicotine pouches surge to 55.7% of the U.S. oral tobacco market in the third quarter of 2025, an 11.1-point year-over-year expansion that is reshaping category dynamics. The company’s challenge is clear: keeping pace with the fast-growing oral segment. While on! held an 8.7% share of the total U.S. oral tobacco category, its position within the nicotine pouch segment slipped to 15.6%, down 4.1 points amid highly elevated competitor promotional activity.

During the third quarter, competitor promotions drove the nicotine pouch category’s average retail prices down 7% nationally, with declines of more than 70% in a major retail chain. Altria noted that on!’s retail price increased approximately 1.5% over the same period, reflecting a different pricing trend than the broader category. Despite these conditions, the company highlighted that retail takeaway for on! remained “steady,” indicating consistent consumer demand during a highly promotional environment.

To strengthen its position in the evolving segment, Altria is rolling out on! PLUS, its next-generation pouch designed to enhance comfort, nicotine delivery and flavor satisfaction. The product launched in Florida, Texas and North Carolina, and early research showed higher purchase intent versus several competing brands.

As nicotine pouches continue to expand within the oral tobacco market, on!’s performance and the rollout of on! PLUS will determine how Altria positions itself within this rapidly growing category. The company’s efforts in pricing, product innovation and distribution will shape its trajectory as the segment evolves.

Where PM and TPB Stand Next to Altria

Philip Morris International Inc. (PM) showed strong momentum in its modern oral portfolio in the third quarter of 2025, with global pouch shipments rising 16.9% and U.S. ZYN offtake growing 39%, according to Nielsen estimates. Including select short-term relaunch promotions following earlier supply constraints, ZYN was fully available to the trade and supported by a wide range of commercial activities, Philip Morris noted. Philip Morris also emphasized continued investments in capacity and commercialization to meet rising demand in the nicotine pouch segment.

Turning Point Brands, Inc. (TPB) delivered exceptionally strong modern oral growth in the third quarter of 2025, with segment net sales surging 627.6% year over year to $36.7 million. Now it represents nearly 30.8% of the company's revenues. Turning Point Brands highlighted sequential modern oral growth of 22% and raised its full-year modern oral sales outlook to $125-$130 million. Management also noted progress toward qualifying its first U.S. white-pouch production lines in 2026, underscoring Turning Point Brands’ growing presence in the nicotine pouch category.

Altria’s Price Performance, Valuation & Estimates

Shares of Altria have lost 9.8% in the past month compared with the industry’s decline of 1.8%.

From a valuation standpoint, MO trades at a forward price-to-earnings ratio of 10.47X, down from the industry’s average of 14.12X.

The Zacks Consensus Estimate for MO’s 2025 and 2026 earnings implies year-over-year growth of 6.1% and 2.5%, 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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