The other tobacco products (OTP) category has pulled away from the pack. It’s a $20 billion category for the c-store channel, per NielsenIQ (NIQ) data, and represented 8.5% of in-store sales in 2025, according to NACS State of the Industry Report® of 2025 Data.
For the first time, OTP surpassed cigarettes in gross profits per store, per month, likely due to a combination of factors including polyusage and consumers shopping both categories.
OTP posted the largest year-over-year sales increase among all inside merchandise categories in 2025 and contributed more in-store gross profits than cigarettes for the first time (6.7% vs 6.6%, respectively). This historic shift signals a consumer transition to alternative forms of nicotine and tobacco delivery versus combustibles.
Even with these gains, OTP was not immune to the effects of inflation and pricing, which led to year-over-year unit declines among smokeless (8.0% unit decline), vaping products (13.7% decline) and cigars (5.9% decline), while smaller subcategories saw unit growth, according to NIQ: smokeless alternatives papers (31.9% unit increase) and pipe/cigarette tobacco (0.6% increase).
Where There’s No Smoke
As tobacco manufacturers diversify their portfolios within the smokeless space, most c-store operators are experiencing backbar success with nicotine pouches.
Philip Morris International’s Zyn brand holds more than 70% market share of the modern oral nicotine category and was the first nicotine pouch to gain FDA marketing approval. PMI added Zyn to its portfolio in 2022 with the acquisition of Swedish Match. The top-selling Zyn flavors in c-stores are wintergreen, spearmint, peppermint and cool mint, according to NIQ data for 2025.
British American Tobacco’s Velo Plus nicotine pouch brand experienced triple-digit revenue growth in 2025, with Velo “reaching the number two position in volume and value share and achieving category contribution profitability within one year of launch,” said CEO Tadeu Marroco in a June 2026 earnings call.
Altria Group noted in its 2025 Annual Report that shipments of its On! brand of nicotine pouches grew to more than 177 million cans, and that On! captured an 8.2% retail share of the modern oral category. In December 2025, the company received FDA marketing authorization for On! Plus Mint, Wintergreen and Tobacco in six and nine milligram nicotine strengths.
ITG Brands launched its Zone nicotine pouch brand in the United States in 2024. Earlier this year, the company acquired Black Buffalo, a Chicago-based company, to strengthen its position in the U.S. within the oral nicotine category and complement its Zone brand.
Polyuse Keeps Climbing
Polyuse continues to shape tobacco and nicotine purchasing behavior. Data shared at the 2026 NACS State of the Industry Summit showed that more than half of cigarette smokers (52%) also use other nicotine products, while 87% of modern oral nicotine consumers use multiple nicotine products.
As the rate of cigarette smoking in the U.S. continues its decades-long decline, nicotine pouches have become a key growth driver within OTP as consumers seek smokeless alternatives.
That overlap gives retailers a reason to view cigarettes and OTP together rather than as separate categories. Many shoppers are not fully substituting one product for another; they are buying across categories.
NACS Convenience Voices research reinforces that connection, showing that cigarettes are among the items most commonly purchased alongside OTP.
FDA OKs Fruit Flavoring
In March 2026, the FDA authorized the marketing of four Glas electronic nicotine delivery systems (ENDS) through the premarket tobacco product application (PMTA) process—the first authorization by the agency for non-tobacco and non-menthol ENDS products.
Glas e-liquid pods contain 50 mg/ml (or 5%) of tobacco-derived nicotine in four flavors: Classic Menthol, Fresh Menthol, Gold (mango) and Sapphire (blueberry).
The FDA’s approval of the Glas products is significant. Certain flavors for vape devices that could be perceived as attractive to minors have historically had difficulty receiving approval through the PMTA process.
The FDA noted in a press release that Glas technology mitigates youth access by requiring users to verify their age and identity with a government-issued ID and pair the device with a smartphone via Bluetooth. The device will not operate if it is separated from the user’s smartphone.
As of May 5, 2026, the FDA has authorized 45 e-cigarette products from five companies that can be lawfully sold in the United States.
