Wall Street's new favorite stimulant, Zyn, is in short supply, and Philip Morris, which owns the brand, is still months away from meeting skyrocketing demand.
"We are gradually improving our capacity, and there are a number of steps that we are taking," Emmanuel Babeau, chief financial officer of Phillip Morris International, told investors and Wall Street stock analysts on Tuesday. "I'm not going to give a prediction on where we're going to be at the end of the year," he added, but said that he expects supply to be more in line with demand by the fourth quarter.
Over on Wall Street, the shortage — dubbed the "Zynpocalypse" — has not always been easy, according to finance-industry workers who spoke to BI about their love of Zyn on the condition of anonymity to protect their careers. Some have researched circumventing US Zyn shortages by ordering from European websites, while others said they have been using the lull to test other nicotine pouch brands. People who have strayed from the Phillip Morris brand often say they still long for their favorite Zyn flavors — a sentiment backed by a tobacco seller a stone's throw from investment banks like Barclays and Morgan Stanley.
Nihal, who declined to give his last name, works at a newspaper stand on 49th Street between Sixth and Seventh Avenues in Manhattan. The sidewalk kiosk sells everything from gum to magazines to the latest New York City tabloid newspapers and is frequented by Wall Street workers, he said.
Nihal is currently well stocked on Zyn but said the product was hard to come by earlier this summer. During the shortage, he said, some of his customers tried alternate brands, Velo being the most popular. But other people who came by looking for Zyn continued on when they couldn't find it, telling him that they would try their luck elsewhere.
Nihal spoke to BI while standing in front of a range of 3 mg and 6 mg Zyns of all flavors, from Citrus to Cinnamon. Peppermint, spearmint, and wintergreen are the most popular, he said.
Zyn, which he placed in the most visible spot for customers, is still the top-selling nicotine pouch at his stand, he said.
The "Zynpocalypse"
Zyn, a small pouch containing nicotine that users place in their mouths, has become ubiquitous among white-collar workers looking to boost performance and stay alert. Unlike cigarettes and chewing tobacco, there's no smoke, spit, or social stigma. You simply nudge it next to the gum for a dose of nicotine and toss it when done.
"You can have it in during a meeting, which makes it so easy to put one or two in and constantly feed this addiction," explained Mark Moran, a businessman who started on Zyn in 2019 when he was working at investment bank Lazard.
As Business Insider reported in January, the product has been hot across Wall Street, with sell-side traders ordering it in bulk, so it's always around.
"You get the nicotine without the need to step away from work," one trader told BI at the time. Zyn connects people in the workplace in other ways, he said. "Instead of going outside to have a cig and talk, there's the constant conversation around who has Zyn in their drawers and who is getting the next bulk order."
But Zyn's popularity has led to supply chain issues, which Philip Morris referenced in its first-quarter earnings call. Exacerbating matters, Philip Morris in June suspended online sales to North America after receiving a subpoena from the Attorney General of Washington, D.C. over the company's adherence to laws that ban the sales of flavored tobacco.
Even with supply constraints, Zyn is driving revenue growth for the company, and demand continues to beat projections.
The company sold 135.1 million cans of Zyn in the second quarter, representing a 50.3% increase from the same quarter in 2023 and up from 3.5 million cans in the first quarter.
Philip Morris on Tuesday said it aims to produce 900 million cans of Zyn in 2025, thanks in part to its expansion plans for an existing production facility in Kentucky. The firm also announced earlier this year that it will invest $600 million in a new Zyn production facility in Colorado which will come online by the end of next year.
Ex-"Zynfluencer"
During the call, some analysts asked how Phillip Morris plans to win back consumers who may have turned elsewhere during the shortage. According to Moran, the former Lazard banker, it's a real concern. He, for one, used the shortage to quit nicotine pouches — and thinks others will do the same.
"I would like to think I'm an early indicator of this," Moran told BI.
Moran said had already been thinking about health concerns, including his gums and addiction. When we spoke earlier this week, he had quit for 54 days, going cold turkey. He said he would never go back.
Moran quit Wall Street in 2021 and currently runs investor relations firm Equity Animal. After his first late-night pouch in 2019, offered by a Lazard vice president, his habit steadily grew over the years. Next thing Moran, a former reality TV star, knew, he had been dubbed a "Zynfluencer" by a Swedish newspaper, thanks to his social media posts about the product.
At first, the nicotine felt like a performance enhancer, but the benefits started to wane over the years. "I'd been doing it for five years, so I'm doing it more to create a baseline than I am to gain any cognitive enhancement from it," he explained.
In that short time, Zyn has become emblematic of Wall Street's hard-driving culture — the 21st Century version of frontline soldiers chain-smoking Lucky Stripes or the constantly lit cigarettes of noir-era private detectives.
"Some of these kids are just doing it because it's become a staple of Wall Street," Moran said of junior bankers in their early 20s. "It's almost like wearing a vest, except this is an addictive substance."
Do you have a story about Wall Street's Zyn habit? Contact reporter Alex Nicoll at anicoll@jkmperu.com or via encrypted messaging app Signal or phone at +1 (646) 768-4772.
