Nicotine Pouches Lead Tobacco Category Growth Amid Vape Slowdown
Convenience store retailers across the United States are rapidly restructuring their backbars as modern oral nicotine pouches experience double-digit growth, capitalizing on a significant slowdown in the vape segment. This massive market shift comes as the Food and Drug Administration (FDA) tightens enforcement on illicit disposables while slowly opening doors for age-gated alternatives.
As the c-store tobacco category continues its shift away from cigarettes and traditional smoking products, consumer demand is not leaving the channel—rather, it is migrating. While the vape segment previously captured this shifting demand, modern smokeless oral nicotine products have emerged as the clear winner in 2026.
The Numbers Behind the Category Shift
According to recent 52-week data from market research firm Circana, the smokeless tobacco segment saw a 13.1% increase in dollar sales in the c-store channel compared to last year, alongside an 11.3% increase in unit sales. Conversely, the vape segment faced notable headwinds, with unit sales dipping between 6.4% and 14% depending on the specific product sub-category.
Meanwhile, traditional cigarettes continue to hold the largest overall market share, accounting for $50.7 billion in sales. However, this represents a 0.6% decrease in dollar sales and a more pronounced 5.9% decline in unit sales compared to the previous year.
| Product Segment | Dollar Sales Performance | Unit Sales Performance |
|---|---|---|
| Modern Smokeless / Pouches | +13.1% | +11.3% |
| Traditional Cigarettes | -0.6% ($50.7B total) | -5.9% |
| Vapor Products | Declining / Stabilizing | -6.4% to -14.0% |
Retailers Report Boots-on-the-Ground Trends
Convenience store operators across various regions of the United States report that their in-store sales closely mirror these broader national trends. Consumers are increasingly gravitating toward alternative nicotine formats that offer convenience, variety, and discreet usage.
At Duchess convenience stores, which operates more than 100 locations across Ohio and West Virginia, tobacco category manager Cal Honabarger noted a distinct pivot. “We continue to see strong growth within the modern oral nicotine pouch segment,” Honabarger said. “Traditional smokeless tobacco continues to decline year over year, while the vape category appears to have stabilized compared to prior periods after several years of volatility.”
In East Tennessee, Weigel’s—operator of over 90 stores—is experiencing a similar pattern. Jessica Starnes, director of loyalty and tobacco category manager, confirmed that “vape continues to decline for us, traditional smokeless is flat, and nicotine pouches are continuing to grow at double digits.”
For US Market, which operates 53 stores across Oregon, Washington, Utah, Idaho, and Texas, flavor variety and product format are the primary consumer draws. Amar Sidhu, director of business development, explained that modern oral nicotine products, particularly pouch formats, have gained significant traction due to their convenience and broader flavor profiles compared to highly restricted traditional tobacco products.
The Regulatory Landscape: PMTAs and Age-Gating
Looming over the entire category is the constant threat of regulatory interference. The FDA continues to process a massive backlog of Premarket Tobacco Product Applications (PMTAs). Currently, only 45 vapor products are authorized for legal sale in the United States.
However, regulatory frameworks are evolving. In late 2025, the FDA streamlined the PMTA process by launching web-based submissions. This operational change paved the way for a major regulatory milestone in early May 2026: the authorization of the first non-tobacco, non-menthol flavored pods from Los Angeles-based manufacturer Glas.
The newly authorized Mango and Blueberry pods (marketed as Gold and Sapphire) succeeded due to their integration of device-access restriction technology. The FDA determined that Glas’s age-gating technology, combined with strict marketing restrictions, would effectively prevent underage youth from utilizing the products.
Despite this progress, the illicit vapor marketplace remains a critical challenge. Alison Ritchie, president of the New York Association for Convenience Stores (NYACS), noted that the vapor category continues to be dominated by illicit disposable products. In response, New York Governor Kathy Hochul has proposed strict vapor enforcement and directory-style legislation in her state budget to hold bad actors accountable.
Backbar Optimization: Navigating 2026
With regulations and consumer preferences shifting rapidly, c-store operators must remain highly agile to protect their margins. Retailers are adopting more disciplined, data-driven approaches to managing their backbar space.
“We closely monitor rate of sale, weeks of supply, productivity per facing, and overall category trends when making assortment decisions,” said Duchess’s Honabarger. The rapid pace of innovation has forced the chain to actively reset tobacco fixtures and develop new planograms to accommodate the growing footprint of modern oral nicotine pouches.
Similarly, US Market’s Sidhu emphasized that long-term business reputation and compliance are far more valuable than short-term profit margins. “We evaluate SKUs based on customer demand, compliance, brand reputation, supplier reliability, and category balance,” Sidhu said. “Protecting the integrity of our stores and our customer trust remains the priority.”
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