If you live in a state which allows CBD sales and distribution chances are you’re seeing more Cannabidiol (CBD) products on your local shelves. CBD-infused products are hitting the market so quickly it is hard to keep up. There is seemingly an unquenchable consumer desire for anything containing CBD. You can now find CBD-infused toothpicks, hair pomades and even workout gear. A segment of the CBD craze which will likely see the most sustained growth in the coming years will be within the food and beverage category. From cookies to chips, to teas and juices, companies are finding ways to include CBD in their product offerings. It is projected that by 2024 CBD-infused products could account for a whopping $13 billion in sales here in the United States and worldwide the larger cannabis market could reach upwards of $90 billion that same year. For those of us in the food and beverage development business, this is an exciting time. Many of the nutritious and delicious food and beverage products consumers have always enjoyed are now being reformulated to contain CBD.
Where CBD Growth Is Coming From
Growth in the food and beverage category is likely to see some of the largest market gains. Specifically CBD in baked goods will likely drive development in the immediate future. Much of this development will be driven by smaller startups. Entrepreneurs with an eye on future markets are largely responsible for developing the current products available to U.S. consumers. The big CPG’s haven’t yet pulled the trigger on full CBD investment, in part due to the complexities involved with selling CBD infused products. CBD is not yet fully recognized by the FDA due to a patchwork of state regulations. Currently there are a 19 states which allow the retail sale of both THC and CBD-infused products. There are 14 states which allow the sale of products containing only CBD. The remaining states prohibit any cannabis-related product sale, distribution or possession. “This chaotic legislative environment has allowed smaller and more agile companies to take greater risks and push the envelope, with the big CPG’s watching from the sidelines”, says Jessica Cristadoro, the CEO of The Vivid Team. Smaller companies with less to lose have opened production facilities in pro-cannabis states. With more states allowing medicinal and recreational use of cannabis, and CBD becoming more widely known, sales and distribution channels are rapidly changing, and expanding. A recent report from High Yield Insights indicates that consumers are overwhelmingly agreeable to large CPG’s offering products containing CBD. With full FDA approval, you’ll rapidly find CBD available in many everyday food and beverage items.
The Increasing Popularity of CBD
Just a few years ago it would have been difficult to find an average American consumer that had any idea what CBD was. Public awareness changed quickly due to two key events propelling CBD from obscurity to notoriety. The first event was the passage of the 2018 US Farm Bill which legalized industrial hemp. The second propellent was those early renegade states such as Oregon and Colorado who first legalized medicinal and recreational cannabis. Fast forward to today and you’d be hard pressed to find an average consumer loving in a pro-cannabis state who hasn’t at least heard of CBD.
What is the driving force making CBD so popular? Undoubtedly the possible health benefits are the number one reason people are interested in CBD. Preliminary studies have shown that CBD likely produces positive therapeutic effects for social anxiety disorders, psychotic disorders and substance use disorders. In addition, CBD is said to help reduce pain, help alleviate cancer-related symptoms, reduce acne, potentially help neurological disorders, benefit heart functions and even possibly prevent diabetes. The segments of our population most attracted to the positive attributes of CBD are stressed-out millennials and boomers combating a growing number of aches and pains. These two groups are overwhelmingly leading the charge for more CBD-infused products. Both groups believe in the therapeutic validity of CBD.
An additional point to note regarding the popularity of CBD – it isn’t an opioid. Most of us know that opioid addiction is a serious problem in many parts of America. So much so that the Surgeon General has labeled the opioid crisis and possible remedies a top priority moving forward. CBD is gaining notoriety as a possible replacement to highly addictive opioids. “CBD is not a scam,” said Yasmin Hurd, director of the Addiction Institute of Mount Sinai in New York City who led a double-blind study of 42 recovering heroin addicts and found that CBD reduced both cravings and cue-based anxiety, both of which can cycle people back into using.” CBD is a safe alternative to opioids and the public at large is looking for alternatives that are both natural and affordable.
Variety Of Products
Currently the best place to find CBD-infused products would be in the ever expanding beverage category. The CBD-infused drinks market has grown from $7 million in 2017 to $318 million currently, according to Brightfield Group, which closely monitors the market segment. CBD infused in beverages had been difficult to achieve due to the insolubility of CBD. Traditionally manufactures have relied on a secondary agent to help break down cannabidiol, helping it to mix with water. The downside to secondary agents however is the effect it can have on the overall taste, as well as its shelf life. By using a process called microencapsulation – developers are now able to add CBD to beverages without the need for additional agents while also retaining the medicinal and therapeutic properties in less diluted proportions. Microencapsulation essentially encapsulates CBD particles in a protective barrier. The microcapsules protect the CBD particles against evaporation, contamination, and oxidation, keeping the CBD intact until the body can absorb it. Using this process of adding CBD to beverages means the CBD found in drinks will be that much more effective. Being more therapeutically effective will also translate to increased consumer demand.
Currently there are a number of manufactures making a wide variety of CBD-infused beverages including teas, juices, soft drinks and sports drinks. Some of the better known beverages currently available are:
https://www.cbdteas.net/ Buddha teas
https://enjoykickback.com/ CBD-infused drinks Lemonade, coffee and tea
Two interesting players in the beverage market to watch are Ocean Spray and Pepsi. Ocean Spray has created their own line of CBD sparkling water, Carry On. These beverages are available in locations throughout Colorado. Another interesting development are Kalo drinks, which are being distributed by Pepsi-Cola Bottling. Both of these powerhouses supporting CBD-infused products are a sign of what lies ahead. Larger CPG’s are just beginning to test the waters in states which allow CBD consumption. As a clear regulatory path is finally achieved, look for a wave of CBD infused beverages to hit the shelves.
Adding CBD to food is another area that is primed for explosive growth. While the development of foods infused with CBD is still in its infancy, there are still many products one can find beyond cannabis shop edibles. A few notable companies are already producing CBD-infused foods.
https://goodbitescbd.com/ – Brownies and Macaroons
https://earthshineorganics.com/ – raisin cereals, coco pops, potato chips, milk chocolate bars, “weetos” cbd cheese puffs
https://evohemp.com/ – Nutrition Bars, Chocolate Chips and Powders.
An interesting company to watch will be Mondelez. Prior to the pandemic affecting food markets and distribution, the CEO had very positive comments regarding their desire to add CBD to some of their more well known products. Here again is a sign that the big CPG’s are very invested in capitalizing on the growing CBD wave.
The Future Of CBD-Infused Foods And Beverages
The last major roadblock to nationwide CBD-infused products available at your local grocery store is full FDA approval. Cristadoro believes that, “once CBD is finally recognized on a federal level for it’s medicinal and therapeutic advantages, companies both large and small will quickly bring products to market to satisfy public demand”. For those companies, it will be critical to have ingredient sourcing, product reformulations and sales distribution channels ready to go. It will be important to find, and have ready, trusted food and beverage development partners in order to be at the forefront of the tidal wave of CBD product creation and distribution.
The Vivid Team and our parent company, Food Business Consulting, have been developing CBD and THC-infused products since cannabis became legal here in Colorado. Our team provides a range of development services including ideation, product development, regulatory and quality assurance as well as commercialization. Currently we are working on a hangover cure in the form of a powdered drink mixed with electrolytes, vitamins and CBD to help alleviate hangover symptoms. We are also actively involved with developing a baked goods line which will be infused with CBD.
If you are looking for a trusted development partner and co-manufacture, The Vivid Team can provide decades of real-world experience in every facet related to food and beverage development.