BAT predicts fast growth in smoking alternatives for the next decade

By Emma Rumney

LONDON, Sept 29 (Reuters) – British American Tobacco expects revenue growth from smoking alternatives like vapes and nicotine pouches in the mid-teens in percentage terms each year until 2030, it said on Tuesday. 

• The world’s second-largest tobacco maker by market value will host an investor day later on Tuesday, where it will outline its strategy for growth until the end of the decade

• It had already forecast mid-teens revenue growth from smoking alternatives for 2026 and now expects this to continue in the years ahead

• It also expects the “contribution margin” of these products — a measure of how profitable they are — to reach at least 30% by 2030, against 13.3% in June 2026.

• BAT, which makes cigarette brands like Dunhill and Lucky Strike, has been trying to grow revenues from other nicotine products amid long-term declines in smoking in some key markets

• Its rising ambitions reflect fast-growth in its nicotine pouch label Velo, after years of difficulties with its vape and heated tobacco brands

• The company also said it remains on track to deliver at the lower end of its guidance for revenue growth of between 3% and 5% and growth of 4% to 6% in adjusted profit from operations in its 2026 financial year

(Reporting by Emma Rumney; Editing by Jan Harvey)

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