1. What’s happening in the tobacco, vape and next generation category?
2. Pouches are performing well
3. What innovation is taking place in tobacco, vapes and next-generation?
4. What do the next five years look like?
5. How can retailers prepare for future restrictions?
1. What’s happening in the tobacco, vape and next generation category?
The big news in the category is the changes to legislation that will be hitting retailers. From 29 October, the minimum age of 18 will apply to all vaping and nicotine products across the UK, including zero-nicotine vapes, e-liquids, and nicotine pouches, adults aged 18 or older will be legally prohibited from buying vapes or nicotine products on behalf of anyone under 18. There will also be a ban on free giveaways and samples as well as restrictions on substantial discounts.
Also coming down the line is the Generational Smoking Ban which means that from 1 January 2027, the UK’s Tobacco and Vapes Act makes it illegal to sell tobacco products to anyone born on or after 1 January 2009.
Leaving aside the legislation, what are the main trends shaping the category? Andrew Malm, UK Market Manager for Imperial Brands explains how it’s become a two-tier pricing category. “The most prominent trend, which shows no sign of slowing, is a market that is splitting into two distinct ends. One is a large and growing segment focused on value and economy brands, fuelled by the cost-of-living pressures customers are facing. The other is a smaller but highly resilient and loyal segment dedicated to premium products.
“In the cigarette sector, economy and value products account for 72.6% of cigarette sales. Meanwhile, the premium sector of the cigarette market continues to account for just over 10% of sales, showing that these products retain a loyal group of smokers.
“However, premium tobacco products have seen their market share increase to just over 37%, compared with 36% one year previously, reflecting the continued willingness of some smokers to pay more for a trusted, high-quality brand.”
On the vaping side, Angelo Yang, associate general manager, UK, ELFBAR and LOST MARY explains what’s hot. “Prefilled pod kits dominate the vaping category, with high puff count formats accounting for just over 60% of the market, while smaller-capacity devices remain popular for their lower upfront cost.
“Rising cigarette prices and cost-of-living pressures are shaping purchasing decisions, with high puff count products favoured for their larger e-liquid capacities, longer-lasting use and lower cost per puff. The value proposition of refills further supports adoption, offering a more economical alternative to device replacement in an increasingly cost-conscious market.”
“Office for National Statistics data shows that vape use has overtaken smoking in Great Britain, with cigarette use at an all-time low. An ELFBAR survey of 6,000 UK adults (Opinium, Aug 2026) found that among current regular smokers, 55% say they have tried vaping to quit – substantially more than those who have tried nicotine patches (21%) or nicotine gum (20%). This underscores the category’s importance and its role as a key driver of footfall and revenue for retailers.”
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2. Pouches are performing well
One area of the category that is showing growth is the pouch sector. Kilic stresses that pouches are an important part of the category mix for retailers. “Nicotine pouches are expected to be one of the most important growth drivers in the future nicotine market as they are convenient, discreet and easy to use. Demand is particularly strong in lower and medium nicotine strengths, reflecting growing interest from consumers as smokers and vapers seek a more straightforward introduction to the category.
“The global nicotine pouch market is projected to grow from £4 billion in 2025 to £11 billion by 2030, with around 47 million pouch users expected worldwide. In the UK, strong category growth has been driven by VELO and wider consumer interest in smokeless nicotine alternatives. Indeed, Sweden is on the brink of becoming the first European country to be officially smoke-free thanks to nicotine pouches.”
Adam Palmer, senior brand manager at STG UK explains the lay of the land when it comes to pouches. “The nicotine pouch category is becoming increasingly competitive with two significant players making up around 80% of sales, and the remaining 20% from a growing number of newer entrants. New brands, new flavours and new strengths are all helping the category evolve, but its mint flavours and higher strengths that are proving particularly popular.
“Nicotine pouch sales have now reached just over £253m and are growing by 43% YOY in volume terms. Sales in supermarkets are worth £114m of that total but convenience sales are catching fast and are currently worth just under £99m.
“Within nicotine pouches it’s interesting to note that female usage has grown significantly despite historical heavier male usage. We’re also increasingly seeing poly nicotine users, who are switching between categories such as pouches, vape or even conventional tobacco based on their usage occasion.”
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3. What innovation is taking place in tobacco, vapes and next-generation?
“Innovation is always important, but particularly in next gen nicotine. Following the brand re-fresh at the beginning of the year, we introduced an exciting new mint range into our XQS nicotine pouch portfolio,” says Palmer.
“More recently, in reaction to the latest market trends, all XQS 8mg sku’s are currently transitioning to 10mg, as consumer demand in the category is clearly demonstrating that medium to higher strengths are preferred by a growing number of pouch users.”
Yang highlights the innovation with vaping. “Refills represent a growing opportunity within the prefilled pod segment, including smaller-capacity devices, such as the LOST MARY BM600 and ELFBAR 600, which retain a loyal following due to their lower upfront cost. Across reusable devices, the role of refills in repeat sales is reflected in a recent ELFBAR survey (conducted by Opinium, August 2026), which found that 79% of users purchase separate refills, while just 6% buy a new kit each time.”
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4. What do the next five years look like?
There’s significant change going on in the tobacco, vape and next generation category, particularly when it comes to legislation but Palmer is adamant that pouches are here to stay. “Whilst traditional tobacco sales are likely to continue their steady decline, the nicotine pouch category will continue to grow and maintain its positive trajectory, especially in light of the upcoming vape duty resulting in price parity between the categories. But in general, we’re seeing more and more nicotine users discover what a great option pouches are for them, due to their discreet nature and range of flavours.”
Kilic believes that the future success of the category lies with diverse portfolios. “Innovation remains critical to attracting and retaining adult nicotine users. New flavours, product formats and a clearer understanding of nicotine strengths help consumers identify products that best suit their preferences while offering alternatives to combustible tobacco. No single reduced-risk product is expected to replace cigarettes entirely, meaning retailers and manufacturers need diverse portfolios that cater to different adult consumer preferences. As demand for smokeless nicotine continues to grow, successful brands are investing heavily in consumer understanding, responsible category development and new product innovation.
“Retailers can benefit from stocking a broad range of formats, including minis and slim pouches, to meet evolving consumer demand and maximise growth opportunities. However, future growth will depend on reduced-risk products remaining attractive and accessible to adult smokers and nicotine users. That is why government proposals to significantly restrict advertising around nicotine products risk undermining the UK’s smoke-free future. If adult smokers are less aware of the alternatives available to them, it stands to reason that fewer will make the switch.”
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5. How can retailers prepare for future restrictions?
With the consultation on legislation surrounding the vape category now closed, both suppliers and retailers will have to play the waiting game as the Government prepares its analysis of the evidence. That doesn’t mean they should do nothing though, says Kilic. “Retailers should begin preparing now by understanding implementation timelines and planning for potential stock availability issues as regulations take effect. Many stores may need to reconfigure displays, storage areas and operational processes to remain compliant.
“From a duty perspective, retailers can continue selling unstamped stock already in their possession until 31 March 2027, but any new duty-liable products purchased from 1 October 2026 onwards must carry the required stamp. In 2027 ‘Decline ‘09’ will begin, and the challenge 25 policy will be more strictly enforced.”
Yang explains what retailers need to do to remain compliant. “Retailers should have a clear plan to transition to fully stamped stock to meet the 31 March 2027 deadline, and keep staff informed so they can answer customer questions and explain price changes as the switch progresses.
“Ahead of 29 October, they should also review their own practices, from age verification and promotions to any vending machine sales, and brief staff on the new rules to ensure compliance.
“More broadly, retailers should stay engaged with regulatory developments under the Tobacco and Vapes Act, assess how proposed changes could affect their operations, and be prepared to adapt as new rules take effect.
“Equally important is maintaining close relationships with reputable, compliant suppliers and understanding where responsibility sits between retailer, wholesaler and manufacturer as requirements change. In practice, this means choosing partners who can provide clear assurance around product compliance, documentation and traceability.”
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