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BAT projects new nicotine pouches to contribute up to 25pc of revenues
BAT Group says it targets 50 million consumers of its smokeless products by 2030. As of the end of 2025, the firm had 34 million consumers of its smoke-free products, representing 68 percent of the target.
British American Tobacco (BAT) Kenya projects that its newly reintroduced nicotine pouches will contribute up to 25 percent of its total revenues in the medium-term, buoyed by strong sales in the six months ended December 2025.
BAT Kenya Finance Director, Philemon Kipkemboi, said that the resumption of nicotine pouch sales from July 2025 has opened a new revenue stream, which is set to cushion it from the impact of declining cigarette sales as it grapples with a proliferation of cheaper counterfeits in the market.
The cigarette manufacturer booked Sh232 million from sales of its nicotine pouch products known as Velo in the six months ended December 2025, helping it offset the knocks of the declining cigarette purchases.
“In the second half of 2025, we came back with our modern oral nicotine pouches, and this represents a new revenue stream. As at the end of 2025, the revenue that the oral nicotine pouches contributed in the six months was one percent of the total,” Mr Kipkemoi told the Business Daily in an interview.
“Going forward, as we plan to establish the category, we expect it to give more momentum to our revenue. In the medium-term for Kenya, our revenue from Velo should contribute anywhere between 15 percent and 25 percent of the total revenue.”
BAT Kenya debuted in the nicotine pouch business in July 2019 through a product known as Lyft, before it was halted in October 2020 following a fallout with the Ministry of Health over its licensing and the provision of the Tobacco Control Act.
The company returned to the market with Velo in July 2025, citing a favourable regulatory environment.
The company divested from the non-combustibles factory plant it had set up in Nairobi and now relies on importation from Pakistan to meet the demand in the regional market it serves.
“The sourcing strategy for Velo right now relies on an importation model because two years ago we divested from the factory plant that we had because of the regulatory headwinds that we had faced,” Mr Kipkemoi said.
“We had an idle asset for five years, and this wasn’t making sense for shareholders, so we decided to divest from it and pivot to an import model. Our strategy is always to source from the cheapest place, and we are currently importing from Pakistan.”
BAT Group says it targets 50 million consumers of its smokeless products by 2030. As of the end of 2025, the firm had 34 million consumers of its smoke-free products, representing 68 percent of the target.
The manufacturer says its target is to have revenue from non-combustible products be 50 percent of the total by 2035, up from the current 18 percent.
In the full year ended December 2025, BAT Kenya’s net earnings stood at Sh23.2 billion, a 10 percent decline from what was reported the previous year, signalling continued pressure on its sales.
The company, however, managed to register a 17 percent jump in profit after tax to Sh5.3 billion on the back of aggressive cost rationalisation.
