Capitalizing on Trends, Innovation in CBD

“We expect that CBD as a total industry will reach close to $17 billion in sales by 2025,” said Kay Tamillow, research director at Brighfield Group during an SFA Ask the Experts webinar, Thursday. Tamillow spoke about the current landscape of CBD in food and beverages and how it’s expected to grow, especially once the FDA gives more regulatory oversight to the category.

Consumers are turning to CBD products for a number of reasons, including both mental and physical wellbeing. The top five conditions that consumers look to CBD to treat are anxiety, depression, joint pain and inflammation, arthritis, and severe/chronic pain. Another common use is to treat insomnia, said Tamillow.

To capitalize on the growing consumer interest in CBD, food and beverage makers are creating innovative products that taste good and have functional benefits, including beer, tablets, kombucha, chocolate, sports nutrition products, and snacks.

In the beverage space, the rising demand for functional beverages is helping to grow the CBD category. “Americans have a thirst for functional beverages, whether it be energy drinks or sports drinks,” Tamillow said. “CBD-infused beverages can offer energy-boosting, sleep-enhancing, and workout recovery benefits.” The current CBD drink market offers products for all different day parts and ways consumers might consume a beverage. CBD coffees and teas are great for the morning, whereas infused sparkling waters or beers are great for the afternoon and evening. Sports drinks offer pre- or post-workout benefits and CBD fizz tablets allow people to have CBD on the go.

The CBD edibles space is also growing and expected to continue to grow in the coming years. Functionality is equally important with CBD-infused foods; especially for consumers looking for added health benefits, plant-based options, simple ingredient lists, and sustainable foods, said Tamillow. However, there is an emergence of fun, indulgent CBD products that are catching consumers’ eyes. For instance, adding CBD to items like cotton candy, lemon ice, or marshmallows acts to help consumers indulge while also offering an exciting, Instagrammable experience.

“If you’re a food or beverage company looking to break into this category, now is the time, before the FDA gives additional guidance, to perfect your product formulation,” Tamillow advised. In addition to offering functional benefits, it’s essential that a CBD product taste good. “That’s what will keep people coming back,” she said.

As soon as the FDA gives clearance for CBD to be added to food and beverages, many large food companies will jump on the trend. It’s recommended that makers build brand awareness and loyalty before that happens, so once the competition comes, your product will stand out. In addition, to appeal to a broader audience, makers should consider creating products with mainstream flavors. Pairing CBD with other, more well known functional ingredients can help, too, Tamillow said. “If a consumer sees a product that is made with both CBD and chamomile, and they know that chamomile will help them sleep, they’ll have a better understanding of which functional property the CBD has in the product.”

View the full recording now. 

Related: Taking a Calculated Risk: CBD in Specialty FoodCanopy Growth, Martha Stewart Launch CBD Line.

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