Personal well-being has been brought to the forefront in the past year, and as consumers look for products to keep them healthy, products fortified with CBD are gaining traction.
CBD, or cannabidiol, is derived from the hemp plant; it is said to have many health-boosting properties but is not psychoactive like marijuana. The benefits of consuming, or using, CBD products include pain relief and reduced anxiety.
However, its use in food and beverage has still not been approved by the U.S. Food and Drug Administration (FDA), despite it appearing in products such as gummies, beverages and pet food. The latest data shows CBD products approved in 11 states, according to the National Conference of State Legislatures, but still not for food and beverage.
Nevertheless, the CBD market is exploding, and Chicago data company Nielsen expects a bright future, predicting the market could reach $2.5 billion this year.
But many products are still not available in grocery stores. “Retailers are very interested in CBD overall but there’s apprehension of having a full CBD selection until it’s approved by the FDA,” says Rick Maturo, associate client director at NielsenIQ.
“Retailers are very interested in CBD overall but there’s apprehension of having a full CBD selection until it’s approved by the FDA.”
Because of this, he expects topical products such as beauty products, analgesic pain relievers and body lotion to take off first in supermarkets. Following that, he thinks gummies, beverages and powdered CBD (which can be added to foods and beverages) will be popular.
Add to this that many consumers don’t understand what CBD is, or how it’s different from hemp, marijuana or THC (tetrahydrocannabinol), and retailers and manufacturers not only have a regulatory hurdle on their hands but also an education gap.
Beverages Break Ahead
While products with CBD are launching in diverse categories, two are doing exceptionally well in conventional and natural retail channels, according to data from SPINS. Sales of refrigerated ready-to-drink tea were up 2,300% and sales of shelf-stable ready-to-drink coffee were up 154,000% for the week ending Jan. 24, 2021, compared to the previous year.
And according to Mintel, consumers are most interested in trying beverage products with CBD in tea (57% of respondents), juice (53%), smoothies (50%) and coffee (48%). For food, the top categories are candy (53%), baked goods (48%) and snack bars (47%).
Beverages, says Maturo, “do a great job of fitting into someone’s existing regimen. If you have [CBD] in a format that doesn’t cause you to change your habits, that’s really appealing. Beverages are also pretty approachable for a new consumer.” He expects their popularity to come just behind topical products and gummies by 2025 and they may even become more popular than topicals, which have more limited applications, he says.
Sparkling waters containing CBD are also doing well and according to SPINS, sales were up 806% in January, compared to January 2020.
Beverage innovation is coming from large and small companies. In January, Molson Coors launched Verywell, a CBD seltzer, in Colorado; and this March, Canopy Growth in Smiths Falls, Ontario, Canada, launched Quatreau, a line of four sparkling waters, in the U.S. “We’re disrupting wellness beverages,” says Tara Rozalowsky, VP of beverages and edibles for Canopy Growth.
Quatreau will initially be available through Canopy Growth’s website and some e-commerce sites. In conventional grocery stores, she envisions it being in the cooler and on the shelf with other enhanced waters, though says a wellness section also works well because it’s a destination.
Beyond Quatreau, Canopy Growth also offers pet products—two new ones, SurityPro in Calm and Active varieties launched in February—a line of gummies, cannabis-infused chocolates, vaping products, oils and concentrates, and softgel capsules.
JustCBD launched in 2017 offering gummies, health and beauty care (HBC) items, pet products, oils and vaping products. These are aimed at the everyday consumer who is “looking for a CBD lifestyle brand that doesn't have an incredibly high price point,” says Melissa Acosta, spokesperson.
The company was e-commerce-ready when the pandemic hit last year, she points out, but it also began working with distributors in 2020 to move into brick-and-mortar stores, including supermarkets.
Last April, Nielsen reported that more than 50% of grocery stores were carrying at least one CBD product. That meant a 123% increase in retailers offering CBD since the first quarter of 2019. But while an increasing number of grocers are introducing CBD products, they are doing so in different ways.
Last June, Gelson’s Markets, Encino, Calif., introduced topical CBD products in three stores, with plans to roll out to more locations based on customer interest. And in August, Balls Foods’ Price Chopper in Kansas City, Mo., opened a CBD store-within-a-store with CBD manufacturer American Shaman, due to customer demand, with the potential of opening more. In 2019, Kroger introduced topical CBD products such as creams and balms to nearly 1,000 stores.
In June 2017, PCC Community Markets in Seattle introduced products such as salves, balms, lotions, body oils and bath salts, with bath salts being the top seller, according to Steven Jamieson, HBC associate merchandiser. After the stores introduced these items, they were popular and “greatly expanded our offerings,” he says. “A wide assortment of our shopper base purchases CBD products.”
“A wide assortment of our shopper base purchases CBD products.”
Jamieson merchandises these products in the HBC department. “Within that, we sell therapeutic topicals in our first aid set and/or the joint health category. Our CBD bath salts are sold in our soap/bath category,” he says.
Denver-based HempFusion sells its CBD health and beauty products at larger retailers such as Publix, where “our FDA drug-listed over-the-counter topicals have had strong success,” says Chief Marketing Officer Ola Lessard. “Larger retailers are generally more conservative, so this line offers them the ability to meet consumer demand without the risk.”
Other products from HempFusion, such as tinctures, capsules and sleep and stress support products, do better in the natural channel. “These smaller retailers have generally been much more comfortable selling CBD supplements since day one,” Lessard says.