British American Tobacco targets sustained growth in smoking alternatives through 2030
British American Tobacco is extending its growth expectations for vaping and nicotine pouch products as it lays out its strategy for the rest of the decade. The forecast signals a bigger role for newer nicotine categories in the group's revenue mix as cigarette consumption declines in some major markets.
Highlights
- British American Tobacco projects annual mid-teens percentage revenue growth from smoking alternatives like vapes and nicotine pouches through 2030.
- The company expects contribution margin from these products to reach at least 30% by 2030, rising from 13.3% in June 2026.
- BAT reiterates full-year 2026 revenue growth at the lower end of its 3% to 5% range and adjusted operating profit growth of 4% to 6%.
Investor day strategy and revenue targets
As reported by Reuters, British American Tobacco said on Tuesday it expects revenue from smoking alternatives such as vapes and nicotine pouches to grow in the mid-teens percentage range each year until 2030.The tobacco group, the world's second-largest by market value, is hosting an investor day later on Tuesday where it is outlining its growth strategy through the end of the decade. It had already forecast mid-teens revenue growth from smoking alternatives for 2026, and it now expects that pace to continue in the following years.
The company also expects the contribution margin of those products, a measure of profitability, to reach at least 30% by 2030, up from 13.3% in June 2026.
Shift away from cigarettes and profit outlook
BAT, which makes cigarette brands including Dunhill and Lucky Strike, is seeking to expand revenue from other nicotine products as smoking continues a long-term decline in some key markets.Its higher targets reflect strong growth in its Velo nicotine pouch brand after earlier difficulties in its vape and heated tobacco businesses. The company also says it remains on track to deliver revenue growth at the lower end of its 3% to 5% guidance range and adjusted profit from operations growth of 4% to 6% in its 2026 financial year.
Our earlier article on governance tensions at India’s Tata group explained how a boardroom rift has put the spotlight on succession planning and the possible future ownership structure of Tata Sons. We noted that any leadership transition or a potential Tata Sons listing was seen as unlikely to trigger immediate changes to group company credit ratings, with any financial-policy shifts expected to emerge gradually over time.
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