British American Tobacco targets rapid growth in nicotine alternatives through 2030

British American Tobacco (BAT) has outlined a strategic growth plan through 2030, focusing heavily on smoking alternatives such as nicotine pouches and vapes. The company expects revenue from these products to grow at a mid-teens percentage rate annually. A primary driver for this growth is the nicotine pouch brand Velo, as the company anticipates the total market value for nicotine pouches could triple by the end of the decade.

BAT aims to significantly improve the profitability of its alternative nicotine segment, targeting a contribution margin of at least 30% by 2030, up from 13.3% in June 2026. While the company is pivoting toward these alternatives to offset long-term declines in traditional cigarette smoking, it does not plan to exit the traditional market entirely, instead concentrating investments on 20 key markets.

In the United Kingdom, BAT is also engaging with the government regarding proposed regulations. The company has expressed concerns that stricter rules, such as requiring neutral packaging for vapes and nicotine products, could inadvertently drive consumers toward illegal or non-compliant products and make it harder for adult smokers to identify legal alternatives.