BAT Kenya is positioning itself to capitalize on the emerging market for smokeless nicotine products, aiming for nicotine pouches to contribute up to a fifth of its annual revenue by mid-2025. This shift follows regulatory changes allowing the company to reintroduce these products after a previous ban.
Strategic Shift to Smoke-Free Products
Sidney Wafula, CEO of BAT Kenya, highlighted the company’s medium-term goal for nicotine pouches to represent between 15 and 20 percent of total sales. Currently, this segment accounts for just about 1 percent of revenue, reflecting its early-stage development. The move aligns with BAT’s broader strategy to offer less harmful alternatives to traditional cigarettes amid growing health concerns and tighter tobacco regulations.
Regulatory Landscape and Market Potential
The company initially launched nicotine pouches under the Lyft brand in 2019 but withdrew them following government rulings classifying such products as tobacco. Wafula indicated that BAT may revive local production of nicotine pouches if regulatory clarity improves.
Financial Performance and Market Challenges
- In the first half of 2026, BAT Kenya reported a 4.6 percent increase in net revenue to KSh 12.2 billion, buoyed by export sales and growing demand for oral nicotine products.
- Net profit rose 3.1 percent to KSh 3.08 billion, supporting an interim dividend of KSh 10 per share.
- Despite challenges from illicit tobacco trade impacting domestic cigarette sales, nicotine pouches helped offset revenue declines.
- The company also remitted KSh 6.69 billion in excise duty and VAT during the period.
BAT Kenya’s focus on modern nicotine products reflects a global tobacco industry trend toward less harmful alternatives, aiming to retain consumers who do not quit nicotine use altogether.
