How Companies Can Capitalize on the CBD Trend

Now that cannabidiol, or CBD as it’s more commonly known as, is legal, an entirely new product category has sprouted up in retailers everywhere. Consumer CBD has graduated from oils, which were initially a popular way of delivering the compound, to a wide variety of food and beverage, health and wellness, personal care, and even pet products. As the industry continues to grow, food, beverage, and consumer packaged goods (CPG) companies are faced with a choice: get in on the action now or sit this one out.

Considering the research, that choice may be an obvious one. The consumer market for CBD is growing rapidly, with the industry projected to reach $20 billion in sales by 2024. As enticing as this market may be, it’s important that companies first understand the CBD consumer and current product landscape before determining their strategy going forward. Since CBD has only been legal since 2018 and is relatively new for everyone, there is still a lot of uncharted territory to navigate.

To stay up to date on the growing CBD space, we recently conducted a quantitative research study that:

• Evaluated the current CBD product landscape, including impressions, usage, health issues, satisfaction, barriers and triggers, purchase considerations and channels, and brands.
• Quantified consumer expectations and desires around CBD products, such as expected benefits and information on usage occasions, locations, and frequency.
• Identified “white space” opportunities for CBD product innovation, including current and ideal product types and unmet needs.

The research was done via an online attitudes and usage study with men and women ages 18-65. Here’s what we found out.

Consumers recognize that CBD is worth trying and using

Consumers are generally favorable toward trying CBD and have already used these products to manage their health and wellness – below are the most common applications.

Here are a few additional findings around usage and demand that we noted:

• Pain management is very popular with the 55-year-old and older crowd, with 87% of this age group using CBD products for that specific purpose.
• Overall, topical creams are the most popular product, but anxiety-reducing CBD candies rank highest within the 18-34-year-old age group.
• The frequency with which consumers use CBD varies, with 27% using a few times a week, 24% multiple times per day, and 17% once per day. Those who use CBD products a few times every day will typically consume it in the form of food or beverage products.
• CBD consumers are mostly satisfied with their experiences—with 93% saying they are either “very satisfied” or “satisfied.” Only 1% claim they are unsatisfied.

Purchase habits of CBD consumers vary, but hemp is a key driver

A recommendation from friends and family members is the biggest influencer when consumers are thinking about trying CBD, and male consumers in particular are more likely to turn to social media when researching product options. The most popular place to buy CBD products are marijuana dispensaries, but consumers also make purchases at drug stores, online retailers, convenience stores, and giant marketplaces like Amazon.

Hemp-derived CBD is also major purchase driver – if a consumer is already interested in a hemp product, they’re likely to be even more interested if that product contains CBD. Similarly, consumers are more likely to buy a hemp-based CBD product if it falls under the health and wellness or personal care categories. In the hemp-derived CBD space, consumers are most likely to purchase topical creams, sleep aids, vitamins and supplements, and aromatherapy and essential oils. Products in the health, wellness, and personal care categories are currently the most popular with consumers, but they really want to see more CBD-infused food and beverage options.

Consumers are worried about CBD quality and a lack of information

Product quality is a chief concern among consumers, with half of our respondents saying it’s their top purchase consideration. Additionally, high prices, the use of synthetic ingredients, lack of information, and regulation concerns can deter potential CBD purchases. Some consumers noted they feel they don’t know enough yet about CBD’s benefits, effects, regulations, and safety.

Some ways that you can overcome these barriers to purchase include:

• Lowering prices (49%)
• Proving effectiveness (45%)
• Providing more information (41%)
• Creating higher-quality products (35%)

How brands can make strides with CBD and consumers

Building trust and educating consumers about CBD can be an important brand differentiator, especially when they are worried about things like product quality, safety, and efficacy. Since these are key purchase considerations for consumers, it makes sense to focus on these areas to help overcome their worries and persuade them to purchase.

One important thing to note is that while consumers have been using CBD products to address a variety of physical and psychological symptoms, the Food & Drug Administration (FDA) has not widely approved CBD for use in drugs, nor has it yet approved CBD as an effective treatment for any disease or medical condition. If your brand wants to introduce a CBD product, it’s important to be mindful of FDA regulations and the claims you make. Focusing on the topical benefits of hemp-derived CBD, for example, and marketing such a product as hydrating and/or calming (since hemp itself is known for its fatty acids and soothing properties) is one way you can innovate with CBD without making claims you can’t support and risking your brand’s integrity.

Based on our research, here are few key takeaways for your brand to consider:

• Because a significant percentage of consumers use CBD products a few times a week or more (68%), brands have an opportunity to build customer loyalty with products that they would consider indispensable.
• Brands looking to enter the pain management category should target older adults, since that group uses CBD products for that specific purpose.
• With high overall satisfaction levels, consumers are likely to be more favorable toward future CBD product launches.

With a deeper understanding of CBD products and consumer expectations, you can uncover unmet market needs and focus your product innovation efforts there. And as the CBD market continues to expand, you can find your brand’s niche and audience, better navigate regulation concerns, earn customer loyalty, and grow market share.

Download the full research report to see more insights on consumer expectations and desires for CBD products.