Fad or Fab?
CBD is a popular option for consumers who want to take a more natural approach to manage their physical and mental health. At Guest Quest, we’ve been watching this trend since early 2018.
In 2020, WGSN trend service called CBD “the hottest ingredient in food and beauty.” In a recent study by Grand View Research, they state that “the [CBD] market is expected to expand at a CAGR of 16.8% from 2022 to 2030.” Why you ask? As the legalization of cannabis has increased for medical and recreational use, consumers have felt more comfortable experimenting with CBD as way to gain the health benefits of the cannabis plant without the high you experience from THC.
CBD is extracted from hemp, which is essentially cannabis that contains 0.3% or less THC. CBD is government regulated, and is legal at a federal level, and in all 50 states. However, each state can have different regulations making it confusing for consumers interested in trying but new to the category.
As government regulations become less strict and CBD becoming more widely available and accepted, we wanted to know what the average consumer knows and thinks about CBD. We surveyed 510 consumers across the country to understand sentiment and interest in CBD. Respondents represented a mix of consumers that align with US population statistics across gender, age, race, income, and area of the country.
We learned that consumer awareness of CBD and interest in products that contain it is high. While barriers to purchase exist, they center around lack of education.
77% of consumers are aware of products that have CBD and 41% are highly interested in purchasing.
Males, millennials, gen-x, those with higher household incomes, and those with kids in the home are more interested in purchasing CBD.
47% of consumers have tried CBD.
Younger generations, those with higher incomes and those with kids are more likely to be current or past users. 49% of users are newer to the category and have only used CBD products for less than a year, 25% have used for 1-2 years and 26% are very familiar with CBD products having used for 3 or more years.
Consumers see CBD as a great option to manage pain (55%), stress/anxiety (55%), sleep (52%), and relaxation (52%).
13% give to their pets showing opportunity outside of traditional healthcare categories.
Topicals, gummies and edibles are most sought after.
Compared to capsules/pills, tinctures, cartridges and flower showing a favor towards delivery systems that are more familiar and not harmful to lung health.
The biggest barrier to purchase is rooted in lack of understanding
This represents an opportunity for brands and retailers to better educate consumers on the ingredient benefits, efficacy and safety. Of all consumers, 10% say they are not comfortable taking CBD, 6% worry about side effects, and 6% are unsure how it will affect them
78% of consumers cannot name a CBD brand offhand.
Thousands of businesses are competing to become a top name brand in the CBD world, and brands will need to think about how they stand out from the crowd by introducing more novel products and informative benefit-led messaging.
At Guest Quest, we expect demand for CBD products to continue to grow making it FAB in our opinion. According to The “Global Cannabidiol (CBD) Oil Industry Report 2020”, the market for CBD in 2020 was $967.2 million, but it’s projected to grow to $5.3 billion by 2025. There are many reasons why this growth trend will likely continue including high and growing consumer awareness and interest in CBD products that offer a variety of health and wellness benefits. We think that CBD is here for the long term and will likely continue to grow for the foreseeable future.