Can CBD sales remain buoyant post-pandemic?

The COVID-19 pandemic could go down in history, if not as a golden age for CBD, then as a breakthrough moment. And the reasons for this are obvious.

Just ask Farhana Majid, Marketing Operations Associate, SPINS (Chicago). “COVID brought a lot of uncertainty, stress and increased health and wellbeing concerns, and that led consumers to put self-sufficiency first,” she recalls. “To ease their stress and anxiety, they made CBD a popular ingredient, and that can definitely be seen as a growth driver.”

But when the pandemic stress subsides – whether because the vaccine beats the virus or we just learn to live with the newest strain – will the CBD category maintain its current momentum?

The jury is still pending. But the state of the CBD market more than a year and a half after the COVID era gives us clues as to how strong its momentum could be.

Sales remain strong

Analysts at cannabinoid research firm BDSA (Boulder, CO) have as detailed an overview of the dynamics of CBD as anyone else, and as far as they can tell, CBD sales took a back seat as the COVID-19 pandemic grew has become more urgent over other major purchases over the past year, ”said Kelly Nielsen, vice president of Insights and Analytics at BDSA.

But even in the back seat, domestic CBD sales rose 52% across all channels in 2020, as BDSA’s analysis shows, with total sales of just over $ 4 billion for the year. The company’s projections for 2021 are also forecasting 55% growth, potentially bringing the sector’s revenue to nearly $ 6.3 billion.

As for sales in 2020, the pharmacy channel made up the lion’s share and ultimately around 33% of the total for the category, according to BDSA calculations. But e-commerce wasn’t far behind at 25% of the year’s CBD sales.

In fact, BDSA predicts that pharmacy sales could shrink if FDA regulations are relaxed as mainstream sales of CBD products grow. At the same time, however, e-commerce platforms are likely to keep their sales up; BDSA even plans the e-commerce channel to add $ 4.1 billion to the category till 2026.

Passing the stress test

Of course, these predictions can warrant recalculation should the stress levels that have sent so many primarily to CBD subside. But Dale Baker, President, The Valens Company – US (Kelowna, BC), bets we’re not in danger of seeing a mass relaxation event just yet.

“Are we really seeing less stress?” he asks. “We have all had a period of unusual stress and uncertainty, and a non-intoxicating herbal remedy for dealing with that stress was the right product at the right time. CBD sales are still strong after the pandemic and from our point of view we haven’t seen any dampening of demand. “

Nielsen also recognizes the persistent impact of stress on sales, noting that BDSA studies show that 33% of CBD users cited anxiety management as the main driver of consumption, while 32% cited stress management.

Broad advantages

Nevertheless, there will inevitably come a certain normalization of the mood – delta variant or not. And luckily for the CBD sector, consumers are not lacking in substitute justifications to come back for the even wider range of benefits.

For example, according to the BDSA, pain relief drives 47% of CBD users into this category, with better night sleep motivating 39% more. “These states of wellness need exist even without a global pandemic,” notes Nielsen, “and that gives good reason to expect that wellness products and dietary supplements will continue to grow.”

And it’s worth noting that CBD doesn’t have a lock on stress management anyway. “We’re seeing other functional ingredients used to combat stress and anxiety,” notes Majid, “with much stronger growth in the vitamins and nutritional supplement categories.”

Case in point: data from the natural Enhanced + MULO (multi-outlet) channels (powered by IRI) show that lemon balm rose 736% in the 52 weeks to June 13, 2021, while ashwagandha and ginseng grew 133 The implication, according to Majid, is that the growth of these ingredients could curb the growth of CBD.

For the same reason, she continues: “There is an opportunity here for synergies between the ingredients as they encourage similar uses.”

Developing need states

In any case, Nielsen’s noticed that as the CBD category diversified, so did the typical buyer. And with that evolution, she says, “We have also seen an evolving set of need states in the consumer base.”

For example, while consumers who have been in the category for at least two years often tend to “relax / be mature” or “improve my quality of life”, those who have been in the market in the last month are more likely to look for targeted products Benefits like “menopausal relief,” “post-exercise recovery,” and “improved libido,” she says.

Baker’s observed a similar phenomenon, emphasizing that CBD users “like to shop for solution”. Therefore, CBD product maker Green Roads – which The Valens Company bought in June of this year – has a feature on its website that recommends items “based on whether the consumer is trying to relax, sleep better, or his body is for exercise or exercise to keep active lifestyle, “says Baker.

Very good indeed

All of this speaks to the role wellness plays in the success of CBD. “Wellness products – topical creams, balms, ointments, etc. – as well as pharmaceuticals and dietary supplements will be the top three categories driving CBD sales in the coming years,” predicts Nielsen, adding that “wellness alone is expected to be 2.9 billion US dollars will contribute to growth in US CBD sales through 2026. “

Additionally, Majid notes, “Health and wellness consumers look for functional ingredients in all of their lifestyle purchases, and the data shows that consumers are willing to take advantage of CBD in everyday products rather than standard medications.”

As evidence, she points to SPINS data, which shows that CBD personal care kits increased hair care by 229% in 52 weeks through the 13th.

Food for thought

Edible applications are also driving sales. BDSA ranks edibles as the most popular CBD delivery format, with 75% of consumers who have consumed cannabinoid in the past six months saying they chose an edible. IRI data also showed more than 23% growth in the grocery channel, says Nielsen.

SPINS data paints a similar picture, with CBD-infused drinks looking particularly bright. Shelf-life coffee sales rose 111% through June 13, according to Majid, while shelf-stable water increased 66% and shelf-stable juices rose 44%. “Another interesting category on the rise,” she adds, “is nut and seed butters, up 77%.”

“Nevertheless,” emphasizes Nielsen, “while some food and beverage products are also available outside of the pharmacy, especially in e-commerce, significant growth beyond these channels awaits FDA approval of CBD as a legal food additive.” BDSA even predicts that domestic CBD sales will reach $ 22 billion in 2026, assuming approved additive status, by the end of 2021 or 2022.

Educational equation

FDA approval isn’t the only hurdle CBD must overcome in order to realize its potential; Experts also emphasize the importance of conscious consumers.

“In addition to all of the other things you need to do to get a successful product to market,” says Nielsen, “CBD brands need to educate consumers so they can make informed choices.” This is going to prove especially important as sales spread beyond pharmacies – where consumers are already quite savvy – to mainstream events.

The lessons Nielsen would like to see emphasized include the difference between hemp- and cannabis-derived CBD; the difference between hemp-derived CBD and hemp seed and hemp oil products; the influence of the delivery mechanism on cannabinoid effects; and the “entourage effect” that occurs when several cannabinoids work together. “And,” adds Nielsen, “brands need to cover all of that without making unsubstantiated claims.”

It’s a big job, but the industry, which seems to attract passionate advocates on both the buy and sell side, seems determined to fulfill itself.

And for this and other reasons, Baker is optimistic about the future of CBD. “When people find a product that works for them, they stick with it,” he explains. “Products that solve problems remain relevant.”

source https://www.bisayanews.com/2021/09/13/can-cbd-sales-remain-buoyant-post-pandemic/