(Editor’s note: This story is part of a recurring series of commentaries from professionals connected to the hemp industry. Larry and Jackie Berg are co-founders of CBD Marketing Hub, a digital-to-door agency focused on CBD and cannabis marketing.)
Seismic advancements have dominated the CBD market over the past decade with some of the industry’s largest brands seeing double- or triple-digit year-over-year growth.
Although constant growth has been the watchword of this past decade, constant change now defines it. And there’s plenty of that ahead in 2021.
Our team at CBD Marketing Hub has identified some of the watch-worthy trends for CBD products this year below.
More market segmentation
Niche market efforts will become larger and more formalized as brands continue to seek out less crowded consumer segments. This will further diversify and differentiate each brand and achieve higher ROIs on exploratory segmented marketing efforts.
Growth of the CBD beverage market is reflective of the trend.
More than 60% of infused-beverage drinkers are new to CBD, according to Mike Luce, the co-founder and president of High Yield Insights, a market research firm.
A recent CBD beverage study released by High Yield Insights and InnovateMR revealed just how much leg room there is in the CBD beverage segment. Among 4,200 survey respondents, only 28% report finding “a (CBD) product, brand or format that works for them.”
With Gen Zs and Millennials comprising the majority (62%) of new CBD beverage converts, along with a clear opportunity to expand existing delivery methods to better fulfill consumer preferences, we project exponential growth in this segment.
Brands will move toward proven CPG consumer models focused on brand family extensions, including the marriage of complementary products and product iterations. Watch for SKU innovation and laser-focused consumer segmentation.
Whether brands elect to emulate Procter & Gamble’s “family of brands” model or create line extensions of existing brands, future success will be predicated on understanding consumer market entry and adoption trends.
Gummies are a great gateway, according to High Yield Insights, which reports that six in 10 new CBD market entrants try gummies before exploring other CBD products.
Black and Hispanic consumer marketing efforts
Cultural competence, particularly among the nation’s largest brands, will continue to improve.
We expect to see more focus on niche marketing as consumer brand loyalty shifts toward the brands that consumers believe “see them.” More brands will concentrate on the growth opportunities within the Black and Hispanic consumer market, which have remained relatively untapped by CBD companies.
One of the first signals of brand dominance in this segmented market is the introduction of unique campaigns specifically built to appeal to Black and Hispanic consumers, as well as Spanish language advertising, packaging and support.
Focus on need states, such as stress and anxiety
Exploding anxiety rates and associated mental health issues will provide hemp and CBD brands with new opportunities to promote the efficacy of CBD.
We already are seeing increased focus on this niche, need-state market, which can be tricky to navigate due to advertising restrictions. Brands are finding value in workarounds that allow brands to leap over ad restrictions via targeted keyword searches.
More than 25% of new market entrants purchased CBD to cope with pandemic-related stress and anxiety, according to High Yield Insights.
With more than 83% of U.S. employees reporting mental health issues, and a whopping 67% of U.S. employers projecting a mental-health crisis within the next two years, we project heightened partnership and growth opportunities in CBD products focused on stress, anxiety and sleep.
Expanded product development and marketing
Catch-all CBD product development and messaging (“CBD is good for everything and everyone”) will be replaced with more targeted product innovation and marketing campaigns.
Enhanced CPG engagement
Expect more CPG-driven mergers and acquisitions, investments and joint ventures to flow into the CBD and cannabis markets.
Larry Berg can be reached at [email protected]. Jackie Berg can be reached at [email protected].
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