The popular brand Zyn from Philip Morris is experiencing an unprecedented surge in demand, leading to supply shortages and empty shelves in the USA. The production capacities of the only US factory in Owensboro, Kentucky, are exhausted, and the company expects the shortages to persist until the end of the year.
Zyn has recorded a slowdown in revenue growth and a decline in market share in recent weeks. Many products on the brand's website are currently marked as back-ordered. Users are joking on social media about the "Zyndemic" or "The Great Zynpression" and posting photos of empty shelves and signs in stores indicating a sellout.
Zyn has been available in the U.S. since 2014, but sales have only exploded in the past year and a half, driven by a wave of "Zynfluencers" on social media. The small, tea bag-shaped nicotine pouches, available in flavors like mint, cinnamon, coffee, and citrus, offer a discreet alternative to cigarettes and do not require spitting. Health experts compare the risk of the pouches to that of nicotine gum or patches.
Philip Morris International, the tobacco giant behind Zyn, is working to increase production capacity at its US plant. "The measures that have already been implemented have begun to alleviate the bottlenecks," said company spokesperson Travis Parman. Philip Morris plans to open an additional production facility for Zyn in the US next year.
**Supply Chain Shortages Have Reduced Zyn's Market Share, Benefiting Competitors Such as On!, Rogue, and Velo. According to a Goldman Sachs Analysis Based on Nielsen Data, Zyn's Market Share in the US Smokeless Tobacco Market Dropped from 26.8% in the Two Weeks Ending April 6th to 25.4% in the Two Weeks Ending June 1st.**
Philip Morris expects to deliver 560 million Zyn doses in the U.S. this year, compared to 385 million last year. "It is clear that this very strong growth is causing some tensions in availability," said Emmanuel Babeau, CFO of Philip Morris, at a conference.
Hayley Richards, a 29-year-old insurance employee from Boston, noticed the shortages when her usual sales spot was sold out. She searched her car and home for forgotten cans and finally ordered from the Zyn website, where she now has to wait two weeks for delivery.
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"Brian Patterson, who works in the commercial real estate industry in San Diego, had 15 cans shipped from New Hampshire after he couldn't find any locally. 'I use the pouches to concentrate while golfing or filling out spreadsheets,' said the 27-year-old. He tried other brands but was dissatisfied with their quality.
Philip Morris' measures to increase production capacity and the planned opening of a new production facility aim to address delivery bottlenecks in the long term. Whether consumers will stay with the brand or switch to alternatives remains to be seen.
