Philip Morris International said Tuesday it is planning to invest $600 million to open a manufacturing plant in Colorado to keep up with steep demand for Zyn nicotine pouches.
The tobacco giant said it expects plant operations to begin by 2025 and create 500 jobs for the state.
The cigarette manufacturer bought Zyn owner Swedish Match for $16 billion in late 2022.
The Zyn pouches have since become a trend among young adults and teens thanks largely to social media.
Though Philip Morris is best known for its cigarettes – including brands like Marlboro and Virginia Slims – it has been pushing a “smoke-free future” to help its image.
The Swedish Match acquisition is one of the company’s latest attempts to boost its tobacco-free business – and it seems to be working.
Zyn pouch shipments jumped nearly 80% in the first quarter compared to last year, according to Philip Morris International.
Adjusted net revenues increased by 11% and operating income increased by 22.2%, both of which the company attributed to high Zyn volume.
Though the company claims Zyn is tobacco-free, it suspended nationwide sales on the Zyn website in June after a District of Columbia subpoena requested information about its compliance with a state ban on flavored tobacco sales.
Health and children’s advocates have warned parents of the danger of Zyn pouches.
Philip Morris has been hit with a series of lawsuits this year claiming it does not properly warn consumers of the risks of nicotine addiction from using Zyn.
Zyn pouches look like small tea bags filled with nicotine that users tuck between their lip and gum, allowing the drug to absorb directly into the bloodstream.
They come in different flavors, including mint and bubblegum – reminiscent of vape products, which also found popularity among teens.
Nicotine pouch use has spiked since 2016, most commonly used between young adults aged 18 to 24, according to Tobacco Free Kids.
The pouches are discrete and easy for teens to hide, since they can be tucked into the upper lip and do not produce any smoke.
But users face the same risk of nicotine addiction as other products, as well as gumline recession.
Philip Morris has also faced pushback on its expected launch of IQOS, a flagship device that heats tobacco instead of burning it – thus keeping the product “smoke-free.”
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