Presenting at FamilyFarmed's Good Food Financing & Innovation Conference, vice president of innovation and brand development at Presence marketing, Tracy Miedema, shared that approximately 75% of US CBD commerce will come from products consumers believe to be more potent such as tinctures and supplements.
Functional ingredient sales growth of CBD through US retail outlets (excluding Whole Foods) reached $185.1m in the 52-week period ended Aug. 11, more than triple the $47.2 million in the previous 52-week period, according to SPINS data. Roughly 60% of CBD product sold in the US natural channel in 2018 were in the form of alcohol-free tinctures, followed by capsules and softgels.
"Sales of CBD as a supplement have just exceeded turmeric in the last six weeks or so," said Miedema, who noted the parallel between turmeric's draw as an adaptogenic ingredient when it first gained traction in the market.
"We’re also really excited about snacks and beverages, but in the long run, what people are looking for is that potency. And so, delivery systems that go right to the heart of what consumers are seeking we still believe will be the big drivers of commerce," she said.
Consumers report anxiety, sleep, and pain relief as top purchase motivators
While food and beverage brands are not permitted to make any health claims around CBD, many consumers are drawing their own conclusions about the ingredient's functional benefits.
According to Miedema, the top three health benefits consumers report as being their primary purchase drivers for products containing CBD revolve around anxiety, sleep, and pain management.
"Those are the big three [health benefits consumers associate with CBD], but there's a vast array of conditions consumers are reporting," she said.
Brands such as Recess sparkling water, which includes on-pack language stating that it it uses hemp extracts and adaptogens, previously told FoodNavigator-USA that it is marketing a feeling ('calm cool collected') rather than an an ingredient.
Hemp-based foods, an adjacent second wind of growth?
As consumers' understanding of CBD and hemp-derived CBD grows, hemp-based (particularly hemp seeds which do not contain CBD) foods are seeing an uplift in sales as result, according to Presence Marketing.
"We also see some really wonderful 'bankability' and kind of a second wind for hemp-based foods," Miedema said.
Humming Hemp, for instance, which makes protein bars made from hemp seeds, has experienced strong retail growth striking nationwide distribution deal with Kroger this year.
"Predominantly industrial hemp is being grown for CBD and the seeds are a byproduct. We’re able to take the hemp seeds to market as a protein superfood," Kelsay previously told FoodNavigator-USA.
'We need a few things to happen before CBD can realize its destiny'
While many in the industry might regard the passage of the 2018 Farm Bill as a 'watershed' moment for the hemp-derived CBD market, the regulatory reality is that the FDA has clearly stated that CBD is illegal to use as a food, beverage, and dietary supplement ingredient.
"Thank goodness we now have this bright red line from a regulatory standpoint that now puts hemp on one side, and puts marijuana on the other side," said Miedema.
"In the really long term, we think the line is going to be drawn more around intoxication because it turns out you can have a higher THC content than 0.3% and not be intoxicated," she claimed. "And a lot of us who are cannabis plant devotees think that percentage can be higher to really get that adaptogenic effect that the human body craves."
However, the next wave of growth for hemp-derived CBD won't be truly unleashed until the industry receives further guidance from the FDA, which is when Miedema predicts demand (especially from conventional retailers and big food manufacturers) will skyrocket.
"We need a few things to happen before CBD can realize its destiny," Miedema added.
