# British American Tobacco acquires Dryft Modern Oral business

- Link: https://www.directorstalkinterviews.com/british-american-tobacco-acquires-dryft-modern-oral-business/412934739
- Published: 2020-11-03T07:34:00+00:00
- Author: Amilia Stone

**[British American Tobacco plc](https://www.directorstalkinterviews.com/ftse-company/british-american-tobacco/bats.l)**(
[LON:BATS](https://www.directorstalkinterviews.com/company/british-american-tobacco/bats.l))
has announced that the US business of the BAT Group has acquired the nicotine pouch
product assets of Dryft Sciences, LLC, a US-based Modern Oral nicotine product company.

·    _This acquisition is a further step in BAT’s societal commitment to accelerate
its transformation journey to build A Better Tomorrow_

·    _This expands BAT’s US portfolio in Modern Oral nicotine, a fast-growing category
in the US_

·    _The products will be sold under BAT’s global Modern Oral nicotine brand, VELO,
creating further brand synergies_

·      _This acquisition has no impact on BAT’s commitment to previously stated 
deleverage targets_

**New Category Portfolio Expansion in the US:**

·    This acquisition expands BAT’s Modern Oral portfolio in the US, expanding from
4 to 28 product variants. It follows the acceptance of Dryft’s recent Pre-Market
Tobacco Product Application (PMTA) submission for filing by the US Food and Drug
Administration.

·    The enhanced portfolio will include a wider range of nicotine strengths and
flavours providing adult nicotine consumers with a greater degree of choice, covering
all key consumer preferences. This will significantly strengthen BAT’s portfolio
in a fast-growing nicotine category in the US.

·    BAT will rebrand Dryft’s US portfolio under its global Modern Oral brand, VELO,
and expects to accelerate growth through superior distribution, marketing and channel
capabilities.

**BAT’s ‘A Better Tomorrow’ Corporate Purpose:**

This acquisition is a further demonstration of BAT’s continued commitment to its
purpose, to** **build _A Better Tomorrow_ by reducing the health impact of its global
business, which entails:

·    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

·    Tracking and sharing progress of our transformation

BAT aims to accelerate the growth of its New Category revenues at a faster rate 
than its total revenue, reaching £5bn in 2025. BAT has an ambition to reach 50 million
consumers of non-combustibles worldwide by 2030. Today, BAT’s non-combustible products
are already available in more than 50 countries across the globe.

> **Guy Meldrum, CEO of Reynolds American Inc., said:**
> “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.
> “We are confident that, leveraging our strong in-market execution capability, 
> the new Velo portfolio will contribute to accelerated growth.”

> **Jason Carignan, President of DRYFT Sciences, LLC, said:“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. We remain confident that modern oral
> innovations like Dryft and Velo will continue to find an adult consumer base seeking
> alternatives to traditional products.”

> **Jack Bowles, CEO of British American Tobacco, said:“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.
> “The addition of Dryft to our US Velo brand is a major step forward, further enhancing
> our successful vaping and oral portfolio.” 

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