BAT predicts fast growth in smoking alternatives for the next decade

British American Tobacco Expects Decade-Long Growth in Smoking Alternatives

BAT's Strategic Outlook and Financial Projections

By Emma Rumney

Revenue Growth Expectations for Smoking Alternatives

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. 

Investor Day and Long-Term Strategy

• 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

Updated Forecasts and Profitability Targets

• 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.

Expansion Beyond Traditional Cigarettes

Growth in Non-Combustible Nicotine Products

• 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

Performance of Velo and Other Brands

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

Financial Guidance for 2026

• 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)