MO Strengthens on! Brand: Can it Sustain Momentum in Nicotine Pouches?

Altria Group, Inc. MO continues to lean heavily on its oral nicotine pouch brand on! to expand footprint in the growing smoke-free category. Despite mounting competitive pressure and rising retail prices, on! delivered a strong performance in the first quarter of 2025. Altria reported shipment growth of more than 18%, while the brand’s share of the oral tobacco market rose to 8.8%, up 1.8 percentage points year over year. Notably, on! increased its share within the nicotine pouch segment to 17.9%, a sign of brand strength even as pricing moved higher.

The company attributes this momentum to strategic brand investments, most notably the It’s On! marketing campaign, which lifted consumer impressions nearly fivefold. Awareness among nicotine pouch users now exceeds 60%, positioning on! for deeper penetration. Altria is also preparing to launch on! PLUS, a larger pouch variant targeting adult dipper and a key demographic for category expansion.

However, the path ahead presents a compelling opportunity. Altria is well-positioned to capitalize through focused execution and continued investment in on!. Competitors are active, but Altria’s disciplined pricing strategy, growing brand equity and planned innovations support further momentum. With on! now driving a significant share of oral category expansion, Altria’s deep retail relationships and marketing agility enhance its ability to sustain volume growth. Continued traction in awareness and product refinement could strengthen on!’s position as a leading nicotine pouch brand in a competitive but growing segment.

MO’s Peer Comparison: The Race in Nicotine Pouches

Philip Morris PM continues to dominate the nicotine pouch category through the exceptional growth of ZYN, its flagship oral product. In ZYN shipments, Philip Morris reported a 63% year-over-year increase, hitting more than 200 million cans in the first quarter of 2025. While out-of-stocks and limited retail availability persisted, Philip Morris is ramping up production, expanding its U.S. manufacturing base and preparing to restart commercial efforts as supply normalizes.

Turning Point Brands TPB is gaining traction with FRE and ALP, its modern oral offerings. On the last earnings call, Turning Point Brands raised its full-year nicotine pouch revenue forecast and saw nearly 10x year-over-year growth. Turning Point Brands noted strong trade receptivity, favorable consumer feedback and increasing reorder and repeat purchase rates. The company is expanding its sales force, investing in brand merchandising, and conducting billboard campaigns and retail trials, including with 7-Eleven.

MO’s Price Performance, Valuation & Estimates

Shares of Altria have gained 1.5% in the past month against the industry’s decline of 0.2%.

From a valuation standpoint, MO trades at a forward price-to-earnings ratio of 10.84X, below the industry’s average of 15.11X.

The Zacks Consensus Estimate for MO’s 2025 and 2026 earnings implies year-over-year growth of 4.9% and 3.3%, respectively.

Altria currently carries a Zacks Rank #2 (Buy). 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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