Products that look like traditional tobacco products but contain no tobacco or nicotine are hardly new: Smokey Mountain Chew first launched its herbal smokeless line in 1985. But even as the backbar has evolved, nicotine-free products have sometimes been viewed as niche or novelty.

Today, nicotine-free options are now available in virtually every tobacco segment.

On July 1, 2024, Reynolds American Inc. announced the launch of SENSA, a fully nicotine-free line of vapor products. The SENSA brand initially launched with six flavors in 22 markets in the United States, with the tagline “all flavor, zero nicotine.”

“We felt that the stronger way to bring this forward was to be very clear that SENSA stands for zero nicotine,” said James Demopolis, senior director of vapor brand building at Reynolds. “It’s not just a new product: it’s a new brand and I think if we get it right, it can be a whole new segment.”

Several other manufacturers have joined Smokey Mountain and Reynolds in offering nicotine-free alternatives. Kretek International Inc. launched a line of nicotine-free little cigars under its Djarum brand in 2023, and herbal cigarettes like TAAT and Khoor can be shipped straight to consumers via Amazon.

While nicotine-free sales data is hard to come by, distributor shipment data tracked by the data firm Management Science Associates (MSA) has been promising. Though MSA currently only has shipment data for nicotine-free vapor products, senior vice president Don Burke pegged it as a segment to watch.

“The data shows that there is legitimate consumer interest in zero nicotine products,” Burke said.

Manufacturers in the nicotine-free space point to other CPG categories as evidence of a broader consumer trend towards products that honor a ritual or behavior while leaving out intoxicating elements or ones they deem less healthy, such as non-alcoholic beer, mocktails or sugar-free soda. There are now high-quality options in all of those spaces, both from craft players as well as major beverage companies.

“Zero nicotine has always been a very small part of the market, but we’re seeing growth from adult consumers demanding alternatives to traditional products,” said Matthew Hanson, chief growth officer at Black Buffalo, a manufacturer of nicotine pouches and chewing tobacco alternatives made without tobacco leaves that also carries nicotine-free versions of its products. “Even though it’s growing from a smaller baseline, it will become increasingly more important to have that choice for adult consumers.”

Here’s a look at the data behind nicotine-free products, the consumers interested in them and whether retailers should view them as a fad or a future growth-driver.

Nicotine-Free’s Numbers

Because zero nicotine is not a segment tracked by most major research firms, it’s tough—if not impossible—to get an idea of the true market. Vapor is probably easiest to estimate as there are nicotine-free vapor options that go through traditional wholesalers tracked by MSA.

Burke said zero-nicotine vape first started showing up in MSA data in early 2021, almost entirely in disposables. Since then, the number of nicotine-free disposable vapor shipments has experienced sustained triple digit growth. In the first quarter of 2024, zero-nicotine vapor shipments grew 160% vs. fourth quarter of 2023; and Q2 2024 saw that figure grow another 274%.

“That’s significant,” Burke said, adding, “this is probably an under-representation of what’s really happening. Many vapor items, particularly flavored and disposables items, are being directly supplied to many retailers.”

While triple-digit growth is impressive, it should be noted that it’s coming from a very small base—as of Q2 2024, nicotine-free represented just 1.01% of the disposable vapor shipments tracked by MSA.

It’s not just a new product: it’s a new brand and if we get it right, it can be a whole new segment.”

“It’s small today, but it’s growing quickly,” said Reynolds’ Demopolis. “We’ve seen in other markets like France and Germany, that nicotine-free vapor has grown rather quickly as well.”

There are fewer zero nicotine options in the non-vapor tobacco segments, and most do not go through the traditional distributors tracked by MSA. But manufacturers like Black Buffalo (which offers both nicotine and zero-nicotine smokeless alternative products) have been impressed by the growth.

“We just let the numbers do the talking: zero-nicotine is now about 20% of our retail sales,” Hanson said, adding that Black Buffalo’s nicotine-free line has been available for three years. “Its growth has exceeded our expectations.”

Why Nicotine-Free?

The growth of zero-nicotine products is even more impressive when compared to what’s happening elsewhere in the backbar. MSA data shows total nicotine sales are down so far in 2024. Cigarettes are leading the charge with a decline of eight to 10% this year.

“Menthol bans are likely accelerating those trends,” Burke noted.

Which brings to light a crucial difference between nicotine-free products and other products in the back bar: as products that do not contain tobacco or nicotine, they are not subject to state, local or federal regulations or flavor bans.

Burke said that when flavors like menthol are banned, many menthol smokers turn to the black market or switch to a non-flavored option, “but some might consider a nicotine-free option, continuing with a ritual they like without the nicotine.”

Kretek International and PT Djarum of Indonesia plan to launch Splash Menthol Smokes, a line of nicotine-free, non-tobacco cigarettes at the NACS Show and in trial markets in California and Massachusetts next January.

By being nicotine- and tobacco-free, the SENSA line from Reynolds can offer six flavors: Berry Fusion, Berry Watermelon Fusion, Blueberry Frost, Mint Frost, Watermelon Frost and Passionfruit Frost.

“It’s an insight-led innovation,” Demopolis said. “We see an opportunity for occasions where adult vapers would want flavor, but not necessarily nicotine.”

Aside from flavors, nicotine and tobacco-free products are not under the purview of the U.S. Food and Drug Administration’s Center for Tobacco Products, and so do not need to submit costly premarket tobacco product applications (PMTAs) and undergo review for a new product, flavor or technology to be introduced into the market.

The Zero-Nic Consumer

When asked what type of adult consumer might be drawn to a nicotine-free option like SENSA, Demopolis said, “it’s really across the board. We think it can extend into cigarette smokers as well. If you think about smokers, those same occasions exist across the tobacco and vaping spectrum.”

The desire for flavors is something most manufacturers understand as a major driver. John Geoghegan, a brand development consultant who is working Kretek’s Splash rollout, said the company’s research and trials showed just how important menthol taste is to the adult menthol smoker specifically.

“[There was] a surprising consensus that menthol taste is more than twice as important as nicotine,” he said. “When Splash trial smokers were surveyed, 51% said they missed [nicotine] a little, 18% were happy the nicotine was gone, and only 31% reported missing the nicotine a lot.”

The same is true for many adults in the vapor category, where the FDA is actively cracking down on illegal flavor sales.

“In the product research that we’ve done, it’s proven that there are adult vapers and tobacco consumers that enjoy vaping but see room for a product that offers them the chance to enjoy flavor, enjoy the vaping experience—but without necessarily wanting the nicotine,” said Demopolis.

There was a consensus that menthol taste is more than twice as important as nicotine.”

But it would be a mistake to assume flavor is the only driver—or even a driver at all for everyone. In fact, Burke said the data shows many consumers are more drawn to the nicotine-free nature of these products than the flavors.

“We’ve seen in the past that low-nicotine items are also growing in the vapor category,” he said. “[Consumers are] going to lower-nicotine vapor items, and then going to the zero product at the end.”

Hanson has also seen this phenomenon play out, both with adult dip users choosing nicotine free because of a desire to quit nicotine all-together or those who want to merely reduce their nicotine usage because of medical reasons or sensitivities.

“They want to avoid or reduce usage of traditional products—but they don’t necessarily want to stop the ritual associated with dipping,” said Hanson.

In many cases it’s the activity and the mouth feel that adult tobacco consumers are craving, Burke added. “The consumer trying to reduce their nicotine consumption grabs the zero percent nicotine items because they enjoyed the activity of smoking/vaping—I think that’s one of the reasons for growth.”

Novelty … Or Must-Have?

Clearly the manufacturers investing in nicotine-free products believe there’s opportunity for this once-niche segment to be a real player in the back bar. And Burke agrees based on the data.

“I would say there’s a definite trend here and that I think that a major manufacturer could have a reasonable amount of business in zero percent nicotine products,” Burke said.

But manufacturers are also managing expectations.

“We are getting a positive sense of anticipation from retailers and distributors to whom we have previewed Splash. They need this for the future,” Geoghegan said. “At the same time, we are being careful to keep expectations realistic. Nicotine-free won’t be for everyone.”

Demopolis estimated nicotine-free vapor would remain small, maybe 3% of all vapor sales—but an important segment for retailers to carry.

“Consumer preferences are evolving, and this is about having a portfolio of products to meet all of those needs,” said Demopolis. “In a lot of categories, consumers are looking for different products in different moments: and they don’t want to compromise on what they want.”

Hanson said Black Buffalo’s experience validates the market for nicotine-free: retailers often start with the brand’s traditional smokeless alternative products, but quickly expand to the nicotine-free line because adult consumers ask for it.

“It’s an essential part of the portfolio because the adult consumers are demanding it from their retailers,” he said. “Zero nicotine has become more than a curiosity—it’s become a part of the ritual.”