The Nicotine Pouch Revolution: How Altria Struggles While Competitors Thrive in a Shifting Oral Tobacco Landscape

The Market Inflection Point

The oral tobacco market is undergoing a dramatic transformation. In Q3 2025, nicotine pouches captured 55.7% of the U.S. oral tobacco category—a striking 11.1-percentage-point jump year-over-year. This surge reflects consumers’ rapid shift toward white nicotine pouches and similar modern oral products, reshaping competitive dynamics across the entire segment.

This market realignment has created clear winners and losers. While the category expands aggressively, not all players are capitalizing equally on the opportunity.

Rivals Gaining Ground: PM and TPB’s Momentum

Philip Morris International Inc. (PM) is seizing the moment with impressive growth metrics. Its global pouch shipments climbed 16.9% during Q3 2025, while U.S. offtake for its ZYN brand surged 39% according to Nielsen data. The company is backing this momentum with substantial investments in production capacity and commercial support, positioning itself to capture demand as the nicotine pouch category continues expanding.

Turning Point Brands, Inc. (TPB) is delivering even more explosive results. Its modern oral segment revenues skyrocketed 627.6% year-over-year to $36.7 million in Q3 2025, now representing 30.8% of total company revenues. Sequential growth accelerated 22% quarter-over-quarter, prompting management to raise full-year modern oral guidance to $125-$130 million. The company is also making strategic infrastructure moves, progressing toward its first white nicotine pouch production lines in the United States for 2026—a critical competitive advantage.

Altria’s Defensive Position

Altria Group, Inc. (MO) faces mounting pressure in this evolving landscape. Its on! brand holds 8.7% of the total oral tobacco market but only commands 15.6% of the nicotine pouch segment specifically—down 4.1 points year-over-year amid aggressive competitor discounting.

The pricing environment illustrates Altria’s quandary. During Q3 2025, competitors reduced average retail prices for nicotine pouches by 7% nationally, with steeper markdowns exceeding 70% at major retailers. Remarkably, Altria moved in the opposite direction, raising on!'s retail price approximately 1.5% during the same period. Despite this contrarian pricing strategy, Altria reported “steady” retail takeaway for on!, suggesting underlying consumer loyalty despite competitive headwinds.

To regain footing, Altria launched on! PLUS, a next-generation pouch aimed at improving comfort, nicotine delivery, and flavor. Initial market testing in Florida, Texas, and North Carolina showed higher purchase intent versus competing brands—a potential inflection point for the company’s modern oral strategy.

The Valuation Disconnect

From an investment perspective, Altria’s stock has diverged sharply from its peers. Shares have declined 9.8% over the past month, underperforming the industry’s 1.8% dip.

Yet the valuation metrics suggest potential opportunity. Altria trades at a forward price-to-earnings ratio of 10.47X, well below the industry average of 14.12X. Zacks Consensus Estimates project 2025 and 2026 earnings growth of 6.1% and 2.5% respectively, though these figures trail broader industry expectations.

Currently rated a Zacks Rank #3 (Hold), Altria’s trajectory depends critically on whether on! PLUS can capture meaningful market share in the rapidly growing white nicotine pouch segment and whether the company can recalibrate its pricing strategy to remain competitive without eroding margins.

The Bottom Line

The nicotine pouch market is consolidating around innovation, scale, and aggressive commercialization. Philip Morris and Turning Point Brands are executing well-coordinated growth strategies, while Altria appears to be playing catch-up despite being the category’s incumbent leader. Success for MO hinges on execution: whether on! PLUS gains traction, whether pricing discipline holds, and whether the company can sustain consumer loyalty amid an intensifying competitive fight for market share in what has become the dominant oral tobacco format.