Turning Point Brands Targets 10% Modern Oral Nicotine Share by 2030

Key Points

• Turning Point Brands aims to double its modern oral nicotine market share to 10% by 2030, potentially creating a $1 billion business if the U.S. category reaches $10 billion.
• The company is expanding its FRĒ and ALP nicotine-pouch brands through convenience-store distribution, increased marketing and a larger sales force; it may need to roughly double its store count to meet its target.
• Modern oral sales are growing rapidly, but margins are currently pressured by overseas manufacturing, freight and tariffs. Turning Point expects margins could approach 70% with domestic production, while legacy Stoker’s tobacco continues providing strong cash flow.

Turning Point Brands NYSE: TPB is positioning its modern oral nicotine portfolio as its primary growth driver, with CEO Graham Purdy telling investors at the IDEAS Conference that the company aims to reach a double-digit share of the category by the end of the decade.

Purdy said the U.S. modern oral nicotine category was approximately $5 billion in 2025 and could grow to at least $10 billion over the next several years. He said Turning Point estimates its current combined online and brick-and-mortar share at roughly 5%, and views a 10% share of a $10 billion market as a potential $1 billion opportunity.

“We are well on our way to getting to double-digit market share by the end of the decade,” Purdy said, citing the company’s online performance and continued expansion into physical retail.

Two-Brand Strategy in Modern Oral

Turning Point’s modern oral business includes the FRĒ and ALP nicotine-pouch brands. FRĒ initially launched through direct-to-consumer channels before expanding into brick-and-mortar retail in the first quarter of 2024. The company later formed a 50/50 joint venture with Tucker Carlson and the Tucker Carlson Network for the ALP brand, which was initially focused primarily on direct-to-consumer sales.

Purdy said the company’s multi-brand approach is intended to appeal to different consumer groups. FRĒ is positioned as a high-performance brand and offers nicotine strengths ranging from 3 milligrams to 15 milligrams, while ALP launched in 3-, 6- and 9-milligram formats and is aimed at what Purdy described as a more independent, everyday consumer.

The company believes it holds about half of the direct-to-consumer modern oral market, which Purdy estimated represents less than 10% of total U.S. category sales. He said the online channel has provided proof of concept for its products before broader retail distribution.

“We are winning in the online environment,” Purdy said. “We think that we have got a great product that competes for the consumer, and we are now ramping that into bricks-and-mortar.”

Retail Expansion and Marketing Investment

Turning Point has increased spending to build brand awareness and expand convenience-store distribution. Purdy said the company entered relationships with UFC, Professional Bull Riders and NASCAR during the second quarter to support FRĒ’s high-performance brand identity.

The company also doubled the size of its sales force in 2025 and expects to increase it by another 50% in 2026. The added staffing is intended to support chain-store placements and ongoing account service, Purdy said.

Turning Point told investors it expected to increase chain-account distribution by about 70% during the year. The company has paid slotting fees to enter larger convenience-store chains, which Purdy characterized as an upfront investment that should become more leveraged as sales within those stores grow.

Responding to an analyst question, Purdy said the company may need to approximately double its store count from current levels to reach its 10% market-share objective, assuming performance in existing stores and online sales remains stable.

Legacy Brands Continue to Generate Cash Flow

While modern oral is the company’s focus, Purdy said Turning Point’s legacy Stoker’s tobacco business remains an important source of cash flow. Stoker’s sells moist snuff and chewing tobacco, and Purdy said the company holds about 60% of the large-format moist-snuff segment and roughly 30% of the chewing-tobacco category.

He said the company has used differentiated package sizes, including a 12-ounce tub, to compete in the moist-snuff market. Purdy also said Stoker’s has continued gaining share despite chewing tobacco being about one-third the size it was at its peak, adding that the business remains as profitable as it was at its peak.

Turning Point also owns Zig-Zag, its cannabis-adjacent accessories business. Purdy said Zig-Zag holds leading positions in premium rolling papers and make-your-own cigar products. However, he said the company has shifted more attention toward modern oral growth while continuing to develop Zig-Zag products such as natural-leaf wraps and cigars.

Financial Profile and Margin Outlook

Turning Point reported 2025 net sales of $463 million and adjusted EBITDA of $120 million, compared with net sales of $325 million in 2023. Purdy said gross margin has remained relatively stable at approximately 57%, while the company’s leverage declined from 2.7 times in 2023 to less than one turn.

Modern oral sales grew 128% year over year in the second quarter, according to Purdy, while the business recorded a 140% compound annual growth rate since the first quarter of 2025.

Purdy said current modern oral margins are pressured by outsourced manufacturing in India, air-freight costs and tariffs. He said the company expects gross-margin potential in the 70% range if it moves to domestic production after navigating the regulatory process.

“Everything that we do, we’re very mindful of what the return on that dollar is,” Purdy said, referring to the company’s investments in distribution, marketing and growth.

About Turning Point Brands (NYSE:TPB)

Turning Point Brands, Inc NYSE: TPB is a U.S.-based consumer products company focused on the manufacture, marketing and distribution of smokeless tobacco, vaping and cigar products. Headquartered in Old Hickory, Tennessee, the company serves retail outlets across all 50 states through a direct-store-delivery network and select third-party distributors. Turning Point Brands operates two reporting segments—Smokeless Products and Cigar—and leverages its logistics capabilities to offer a broad portfolio of brands and SKUs.

In its Smokeless Products segment, Turning Point Brands produces moist smokeless tobacco under leading brand names such as Grizzly, Kodiak and Stoker's.

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