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COVID Aftershocks in Grocery CBD

Like other categories, CBD sales moving online
Illustration: Shutterstock

It’s impossible to talk about trends of 2020 without referencing the effects of the global COVID-19 pandemic. CBD is no exception.

For better or worse, the shutdowns meant a lot of business moving from brick-and-mortar retailers to online, says Nancy Duitch, CEO of Los Angeles-based Sera Labs Inc. Her company’s online business more than quadrupled during the initial 60 days of the shutdown.

Data from Chicago-based research firm Brightfield Group shows as much: Brick-and-mortar CBD sales have declined 30% as of May 2020. Those sales likely moved online. A survey of CBD consumers conducted by Brightfield reported more than half the respondents said they would not decrease their CBD spends and 38% stated they would increase CBD usage during quarantine.

“We are seeing people are stressed out and nervous,” says Duitch. “Everyone wants anything they can do to give themselves some sense of calm and help them go to sleep.”

The increased interest in CBD during state and local lockdowns could benefit brick-and-mortar retailers as those restrictions start to ease.

“The awareness levels of CBD continue to go through the roof—there is a lot of interest in the category,” says Miguel Martin, president and CEO of Natick, Mass.-based Reliva CBD.  As far as retail, where Reliva has a major presence, “most retailers are really looking toward the summer for a big bounce. We’ve been playing for that too,” he says.

To best achieve a post-lockdown bounce in CBD sales, suppliers suggest grocery retailers focus on two things: offering the right product mix and making sure shoppers know CBD is available. In terms of the right product selection, Duitch references the discrepancy between what retailers are selling (mainly topicals) vs. forms consumers are more interested in (ingestibles).

“Most of the major retailers did not take any ingestibles. That’s why our online sales are so much higher,” she says, adding that certain major grocery retailers have brought in gummies from Sera Labs and have done very well with that business.

In terms of merchandising, the where is almost as important as the how. “Sixty percent of consumers still don’t expect to find CBD in a brick-and-mortar store,” says Martin. “So it has to be merchandised in a place where they’re going to organically come across it.”

A prime location with simple, unbranded “CBD Sold Here” signage that clearly communicates trial-friendly price points will go a long way, says Martin.

In short, the keys to CBD success in a post-COVID environment are not all that different than they were before the pandemic.

“Retailers who have had success in this space go where the customers ask them to go,” Duitch says. “Their goal is to keep the customer happy … otherwise they risk to losing that customer to the online world forever.”

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