Spotlight on OTP

Uncharacteristic of traditional cigarettes, the other tobacco products (OTP) category reflects a willingness among today’s nicotine consumers to try a variety of products and brands.  

This outside of the box behavior has helped to accelerate OTP growth across U.S. convenience stores, where the category posts solid margins and sales.  

The NACS State of the Industry (SOI) Report® of 2023 Data showed the OTP category averaged monthly gross profit dollars of $5,007 per store.   

Excluding foodservice, OTP was the third-largest driver of total in-store sales (7.5%) and the fourth-largest driver of total in-store gross margins (5.9%). 

OTP performance in U.S. convenience stores is not showing signs of slowing down: NACS CSX Benchmarking Database for the first half of 2024 showed that OTP sales were up compared to the first half of 2023. 

One growth area within the OTP category is being driven by repeat purchases: nicotine pouches. 

In January 2025, the FDA  authorized the marketing of 20 Zyn nicotine pouch products—“an important step to protect the public health by providing better alternatives to cigarettes and other traditional tobacco products for adults 21+,” noted a Philip Morris International press release. 

We’ve definitely seen the pouch business grow and in a really big way,” said Robert Wade, category and supply chain manager for ExtraMile Stores, in “Bright Spots on the Backbar” in the January 2025 issue of NACS Magazine.  

“We expect the segment will continue to grow, eventually reaching the same size as all other smokeless products,” said Cory McDade, senior director of trade marketing development at Reynolds American.  

During the NACS State of the Industry Summit in Dallas, be on the lookout for insights on the growth of nicotine pouches during the “In-Store Performance Lessons From 2024” session with Andrew Baill, senior manager of customer insights and strategy at Wawa.