By Timothy S. Donahue
Key Takeaways:
- Partnership also targets U.S. wellness market through Korea Ginseng Corp. and operational efficiencies in tobacco.
- Altria and KT&G agree to explore joint growth in nicotine pouches, wellness products, and tobacco operations.
- Altria subsidiary to take stake in LOOP brand maker Another Snus Factory, acquired by KT&G.
Altria Group Inc. announced it has signed a non-binding memorandum of understanding (MOU) with South Korea’s KT&G Corp. to work together on modern oral nicotine products, non-nicotine wellness lines, and improving efficiencies in traditional tobacco operations.
The agreement could see the companies combine resources to boost global demand for nicotine pouches, with potential extensions of Altria’s on! and on! PLUS brands into new markets. As part of the initial steps, an Altria subsidiary will acquire a minority stake in Another Snus Factory, the Stockholm-based maker of LOOP, which KT&G recently purchased.
“We are excited to collaborate with KT&G and their strengths across innovative nicotine and non-nicotine products,” Altria CEO Billy Gifford said in a statement. “The complementary market experience and capabilities of our two companies can accelerate the pursuit of our long-term adjacent growth goals across international regions and adjacent product categories.”
KT&G CEO Kyung-man Bang said the partnership strengthens its strategy to move beyond cigarettes. “Through our collaboration, we secured a path to growth in next-generation tobacco products by expanding our business from cigarettes to nicotine pouches and other areas,” he said.
The deal also covers the U.S. wellness market, where Altria and KT&G’s Korea Ginseng Corp. will look into energy and functional food opportunities. Additionally, the companies aim to share best practices to boost competitiveness in traditional tobacco manufacturing and supply chains.
The memorandum is non-binding, and both companies stated that additional details about commercial agreements will be announced once they are finalized.
