Just a year after he became chief executive officer of Philip Morris International Inc., Jacek Olczak swooped on rival nicotine pouch maker Swedish Match in a $16 billion deal. Olczak wanted the company’s vast U.S. distribution network and popular Zyn nicotine pouches, which are about the size of a chiclet and meant to be placed between a user’s gum and upper lip.
Hailed by some as a product that can give users “unstoppable force,” demand for Zyn is now so great that the company is on track to sell 580 million tins in the U.S. this year, up from 385 million a year earlier. It’s all part of Olczak’s plan as he charts a way for the world’s largest tobacco company to generate two-thirds of its revenue from smoke-free alternatives to cigarettes by 2030. The problem? It’s becoming increasingly clear that the huge wave in popularity for Zyn is also sweeping up kids. There are already an estimated half million underage users in the U.S. who are developing a taste for nicotine — a highly addictive, toxic chemical. Philip Morris was fined $1.2 million this month for sales in Washington, D.C., of pouches made with banned flavors, which are seen as more attractive to children. Olczak is clear that the tobacco company may never be able to stop kids from trying its products. “The unfortunate thing is that with young people, there is an element of experimentation,” he said in an interview with Bloomberg at the company’s headquarters in Switzerland. “It doesn’t matter which country. This age is about experimentation, and they will experiment with the things the adults are doing.” His own 16-year-old son is curious about nicotine, he said. “You have to understand that ‘zero’ will not exist.” For Philip Morris, which reported $3