by John McCurry/contributing writer
During a recent webinar, Jessica Lukas, VP of consumer insights at BDS Analytics, and Larry Levin, EVP of market and shopper intelligence at IRI, gave their views on how the CBD market may develop in the coming years. In this third installment of the three-part series from the webinar, the two discuss how rapidly the CBD market is expanding its reach and how consumers are looking for more information about the CBD products they use.
Lukas says micro-dosing of edibles, or consuming less than 2.5mg of THC, is growing more than 100 percent year over year. Low dose, greater than 2.5mg and less than 10mg, is growing more than 70 percent.
“This marketplace is evolving and new and different product formats and delivery systems are emerging with that,” she says. “Further, more than 50 percent of consumers who consume edibles have chosen edible products based on the CBD content. Again, it is not fair to think about the CBD market as only as what is available in the general market. A lot of people are seeking products in the dispensary channel that are high CBD. And, it’s important to say of these people who have chosen products based on CBD content in the dispensary channel, almost 25 percent of them prefer a 10 to one ratio or higher. What that means is that ratio of CBD to THC.”
Consistency and trust are essential. Lukas says consumers are seeking a good experience. Consumers want manufacturers to do a better job of making product dosages reliable, and this is already happening at dispensaries. General market products will be held to this standard.
“You know, whether it’s a 15-mg CBD beverage or a 25-mg CBD beverage, those dosages need to be reliable and consumers need to have trust in what the brands are promising them,” Lukas says. “Even among non-consumers, again, it’s all about trust and wanting to understand the experience they are going to have. Among non-consumers specifically we see that people say that they don’t consume because it doesn’t fit their lifestyle or they don’t like how it makes them feel.”
Brands are positioning their products this way to make it easier for consumers to understand the functional benefits they are getting from products. Sales are being generated this way with “mood and effect-branded” products, Lukas says.
“The size of the cannabis consumer market continues to grow,” she says. “Even in states that have been legal for five-plus years. And when we break that down further and think about alcohol consumers and cannabis consumers separately and then determine the overlap, what you can see here in fully legal states again, Alaska, California, Colorado, Oregon, Washington, Nevada and Massachusetts, 45 percent of alcohol consumers 21 and older in those states are also cannabis consumers. When we look at cannabis consumers in those states, 65 percent of cannabis consumers in these states are also alcohol consumers. But when we start looking at the trends over time, this is where the risks start emerging. The percent of alcohol consumers consuming cannabis is increasing.”
But the percent of cannabis consumers consuming alcohol is decreasing over time. Lucas says that means as people convert to being a cannabis consumer, some are deciding to no longer drink alcohol.
Regarding future trends, Levin says it’s important to examine retailer adoption. A number of retailers have jumped in and seen the benefit. He cites Kroger, who plans to introduce CBD items in more than 1,300 stores in 22 states. A full-blown retail strategy is critical, he says.
“So, certainly Kroger is looking at the opportunities to satisfy its shoppers and their particular needs for products with this,” he says. “CVS is also jumping on the bandwagon here and having items that are sold in states from Alabama all the way to Tennessee, in eight states. So again, hemp-derived CBD products are answering the needs of individual shoppers…same thing with Walgreens selling CBD products. Whether of getting it in a grocery store, whether I’m getting it in a drugstore, whether I’m getting it in a gym, the opportunity for me to buy CBD products becomes really critical. And we are also seeing in Colorado where brands that have traditionally been sold in dispensaries are now making their way into stores like Walgreens. The opportunities are going to be ripe and rich across the whole of CPG where consumers can source these products.”