Navigating market dynamics and brand battles in Sweden’s online nicotine market
In Q2 2024, the online nicotine product market in Sweden exhibited a diverse range of trends across multiple categories. As consumer preferences continue to evolve, the market landscape for traditional snus, nicotine pouches, and vapes reveals both challenges and opportunities for established brands and new entrants alike.
According to the findings in “Market Shift: New Retailers Rise in Sweden,” a notable increase in online sales has been observed, driven by consumers seeking alternatives in a market heavily regulated in terms of physical sales channels.
Meanwhile, other categories like nicotine-free snus, DIY snus, and heated tobacco have shown varied performance, highlighting unique growth drivers and market dynamics.
Traditional Scandinavian snus
The traditional Scandinavian snus category faced continued decline in Q2 2024, reflecting a broader shift among consumers toward alternative nicotine products such as nicotine pouches and heated tobacco.
Insights from the “Market Shift: New Retailers Rise in Sweden” report suggest that this trend is partially driven by the emergence of new online retailers and shifting consumer behaviors towards perceived healthier options.
Search volumes for snus have dropped by 4.1%, while the market share fell from 43.5% in Q4 2023 to 37.5% in Q2 2024. This trend indicates that traditional snus is gradually losing its dominant position in the smokeless nicotine market.
Top brands and market movements
Lundgrens remains the leading brand in the traditional snus market but saw its market share decline from 16.9% in Q1 to 15.1% in Q2. Despite being the top player, the brand faces intensified competition from both smaller and more agile brands.
Knox showed notable growth, increasing its market share from 8.2% in Q1 to 9.4% in Q2, suggesting a strong ability to attract consumers amidst declining overall interest in traditional snus. This growth aligns with observations in the “Market Shift: New Retailers Rise in Sweden” report, which highlights how newer brands are leveraging digital platforms to gain market traction.
Siberia also demonstrated growth, with its market share rising from 5.4% in Q1 to 6.8% in Q2. Known for its high-strength offerings, Siberia has appealed to a specific segment of snus users.
LD experienced the most significant decline, dropping from 5.2% in Q1 to 3.2% in Q2, reflecting challenges in maintaining its market position in an increasingly competitive environment.
Market trends
- Declining traditional market: The ongoing decline in traditional snus reflects a broader industry trend favoring newer alternatives, driven by health-conscious consumers and evolving regulatory landscapes.
- Brand fragmentation and loyalty shifts: A decrease in branded searches suggests weakening consumer loyalty to traditional snus brands, possibly due to the availability of a wider variety of products and alternatives, a phenomenon also documented in “Market Shift: New Retailers Rise in Sweden.”
Nicotine pouches
The nicotine pouch category continues to show steady growth, driven by rising consumer interest in smokeless nicotine alternatives perceived as healthier than traditional tobacco products. Market share for nicotine pouches increased slightly to 35.4% in Q2 2024, up from 34.8% in Q1 2024.
Dominant brands and market movements
Velo remains the dominant brand in this category, further solidifying its leadership position. Its market share rose from 36.1% in Q1 to 39.4% in Q2, highlighting effective strategies in consumer retention and brand positioning.
Xqs also showed strong performance, with its market share growing from 11.8% in Q1 to 13.3% in Q2. This growth reflects successful market strategies and product offerings that resonate with consumer preferences.
Loop, however, faced a slight decline in market share, dropping from 12.6% in Q1 to 11.8% in Q2, suggesting potential challenges in maintaining its competitive edge.
Lyft experienced a sharp decline from 7.8% in Q1 to 2.3% in Q2, indicating significant challenges, possibly due to shifting consumer preferences or competitive pressures from more innovative brands like Iceberg.
Market Trends
• High market consolidation: The nicotine pouch market remains highly consolidated, with the top brands holding over 87% of the total market share. This consolidation underscores strong brand loyalty but also presents barriers for new entrants, as noted in the “Market Shift: New Retailers Rise in Sweden” report.
• Opportunities for new entrants: Despite the intense competition, new entries like Iceberg have demonstrated potential for growth, suggesting opportunities for innovative or niche brands to gain market share.
Vape (Disposable vapes)
The vape category, particularly disposable vapes, showed signs of stabilization in Q2 2024 following a period of rapid growth. While search volumes remained flat at 0.71 million, the market share for disposable vapes increased slightly to 21.2%, driven by new entrants and changing consumer preferences.
The “Market Shift: New Retailers Rise in Sweden” report also notes a similar stabilization in online retail trends as more established players consolidate their positions while newer brands make strategic entries.
Top brands and market movements
Frunk Bar saw a significant decline in market share from 27.0% in Q1 to 21.6% in Q2, reflecting challenges in retaining market share amid increased competition.
N One emerged as a strong new player, with its market share rising sharply from 1.6% in Q1 to 14.4% in Q2. This growth indicates a successful market entry and suggests that its product offerings resonate well with consumers.
Panther Bar experienced a decrease in market share, dropping from 20.6% in Q1 to 12.6% in Q2, highlighting the volatility of the vape market.
Elfbar also saw a decline, with its market share reducing from 14.9% in Q1 to 10.5% in Q2, suggesting declining consumer interest or increased competitive pressures.
Market Trends
• Dynamic competition: The vape market remains highly competitive, characterized by frequent shifts in brand rankings. New brands such as N One and Aroma King have quickly gained market share, challenging more established players.
• Low brand loyalty: The low branded search rates (20.6% in Q2) suggest that consumers are not heavily committed to specific brands, indicating a willingness to explore new options and a dynamic market environment.
Overview of other categories
While the focus remains on snus, nicotine pouches, and vapes, other categories such as nicotine-free snus, DIY snus, and heated tobacco also reflect unique market dynamics.
The “Market Shift: New Retailers Rise in Sweden” report notes that these categories are gaining niche appeal due to product differentiation strategies and targeted marketing.
• Nicotine-free snus saw modest growth of 1.1% in Q2 2024, driven by new functional products that offer benefits like caffeine or vitamins. Brands like Velo Zero and X-Gamer are leading growth, while traditional brands like Onico and Qvitt continue to decline.
• DIY snus (make-your-own snus) remained stable but niche, with minimal change in market share. Swedsnus continues to dominate, with strong brand loyalty and little competition from other brands.
• Heated tobacco experienced the highest growth among all nicotine-related product categories, with an 8.4% increase in search volume in Q2 2024. Iqos remains the market leader, while new entrants like Terea show potential to disrupt the market.
Strategic implications and future outlook
Across all categories, brands must prioritize innovation and differentiation to stay relevant in a highly competitive market. For traditional snus brands, this could involve introducing new flavors, formats, or marketing strategies that appeal to younger, health-conscious demographics.
Nicotine pouch brands should continue to capitalize on their growing appeal by developing new products that align with consumer interests in healthier alternatives.
With potential regulatory changes on the horizon, brands need to remain agile in adapting their strategies to ensure compliance and leverage new market opportunities. Additionally, strengthening brand loyalty through targeted marketing, consumer education, and engagement strategies will be key to retaining and growing market share.
The future of the nicotine product market will be shaped by consumer preferences, regulatory landscapes, and the ability of brands to innovate and adapt. Those who can effectively navigate these dynamics, particularly within the core categories of snus, nicotine pouches, and vapes, will be best positioned for sustained success in this rapidly evolving market.
References:
“Market Shift: New Retailers Rise in Sweden,” Nictrack, August 26, 2024.