BAT Acquires Modern Oral Nicotine Company

LONDON — British American Tobacco plc (BAT) has acquired the nicotine pouch product assets of Dryft Sciences LLC through the U.S. business of the BAT Group.

Dryft's products will be sold under BAT's global modern oral nicotine brand VELO.

The acquisition expands BAT's modern oral portfolio in the United States from four to 28 product variants. The enhanced portfolio will include a wider range of nicotine strengths and flavors, providing a greater degree of choice that covers all key consumer preferences.

"The modern oral category in the US is developing rapidly. We are excited to expand the portfolio of VELO products to meet the evolving preferences of adult consumers," said Guy Meldrum, CEO of BAT subsidiary and VELO manufacturer Reynolds American Inc. "We are confident that, leveraging our strong in-market execution capability, the new VELO portfolio will contribute to accelerated growth."

BAT expects to accelerate growth in the category through superior distribution, marketing and channel capabilities, according to the company.

The deal also follows the acceptance of Dryft's pre-market tobacco product application submission for filing by the Food & Drug Administration.

"We're proud of the tremendous momentum we've built with Dryft and thrilled that our strong product portfolio will now serve to enhance the VELO brand," said Jason Carignan, president of Dryft Sciences. "We remain confident that modern oral innovations like Dryft and VELO will continue to find an adult consumer base seeking alternatives to traditional products."

BAT noted that the acquisition further demonstrates its commitment to build A Better Tomorrow by reducing the health impact of its global business through means such as:

• Committing to providing adult consumers with a wide range of enjoyable and less risky products;
• Continuing to be clear that combustible cigarettes pose serious health risks, and the only way to avoid these risks is not to start or to quit;
• Encouraging those who otherwise continue to smoke to switch completely to scientifically-substantiated, reduced-risk alternatives; and
• Tracking and sharing progress of its transformation.

"Today's announcement underscores our societal commitment to accelerate our transformation and build A Better Tomorrow. Our multi-category strategy is key to our transformation," said Jack Bowles, CEO of BAT. "The addition of Dryft to our U.S. VELO brand is a major step forward, further enhancing our successful vaping and oral portfolio."

BAT currently has non-combustible products available in more than 50 countries. It seeks to reach 50 million consumers of non-combustibles worldwide by 2030.