‘There Is An Active Discussion Of CBD Happening Across The Country,’ Says A New Report. And That Spells Opportunity.
In 2017, when celebrity host (The View) Whoopi Goldberg was enjoying the high point of her then-new CBD brand, Maya & Whoopi, a reporter asked what the next step was. “World domination,” Goldberg joked at the time.
She might have been onto something.
Goldberg this year parted ways with her business partner, Maya Elisabeth; the result was that their company folded. But if Goldberg back in 2017 was predicting a big future for CBD startups, she wasn’t off the mark, judging from a the findings of a new survey from New Frontier Data.
“The newness of the CBD experience for most consumers suggests there remains significant opportunity for well-developed brands to attract consumer attention and capture market share from existing market leaders,” the report says. A big reason why startups might have an edge, the researchers imply? The novelty factor.
“Consumers have not been using the products with sufficient longevity to create durable brand loyalty that is difficult to dislodge,” the report says.
To compile the study, New Frontier Data surveyed 4,074 U.S. adults in mid-March. The survey population consisted of 26% of subjects who earned less than $30,000; 27% earning $39,000 to $59,999; 27% earning $60,000 to $89,999; and 16% earning $90,000 and up.
Among the report’s chief takeaways:
Familiarity with CBD is an important factor
· CBD is hardly unknown to the American mainstream. “Nearly 9 in 10 Americans are familiar with CBD,” the report says. Some 86% of those surveyed had heard of CBD, and a majority (55%) were interested in learning more. Younger cohorts tended to be more interested than older groups.
· Word of mouth is a common thread: Nearly 3 in 4 (73%) of those surveyed who’d heard of CBD reported having had a conversation about it, including the 67% who had not consumed it. People reported that their conversations were largely positive.
· Positive associations: 51% of those surveyed knew a friend or family member who’d used CBD, and nearly 1 in 5 (17%) had recommended CBD to someone else.
· Frequency: Among Americans who reported ever having consumed CBD, 40% said they did so at least once a week, with older consumers using it more frequently than younger ones.
· CBD consumers seem to be evangelists. A majority, 56%, said they had recommended CBD products to someone else.
Stress and pain are major reasons for use
· Three in five (60%) of consumers surveyed reported using CBD in a context that might be called “unwinding,” such as relaxation, relief of stress or anxiety reduction. The primary use, however (41%), was pain management.
Means of Consumption
· Oils and tinctures led the way, at 38% (of the ways in which consumers surveyed consume CBDs). Topicals were the next most widely used method, at 19%; then: food or drinks, 18%; flower, 8%; pills/capsules, 7%; and vaping, 7%.
· Some 43% of consumers said they used less than 30 mg. a day; 22% reported using 50 mg. or more; and 12% used 100 mg. or more a day.
· Some 65% of consumers surveyed said CBD had positively affected their quality of life. Only 2% described a negative effect.
Level of expenditure
· Most consumers (59%) said they spent less than $50 a month on CBD.
· Some 46% of male consumers surveyed said they used CBD at least once a week, versus 36% of women in the survey population.
· On average, men spent more for CBD than did women. Men were more likely (21%) than women (12%) to spend more than $100 per month. Purchasers ages 35 to 54 were the most likely (21%) of any group to spend more than $100 per month.
· CBD purchasers reported being generally happy with the products they were able to purchase, depending on the regulations in their geographic area; 71% agreed they were satisfied with their purchases.
· When selecting which CBD product to purchase, price and quantity of CBD were the most important factors to those surveyed. Convenience of location and service from staff were also important criteria.
· Some 51% of purchasers said they usually purchased familiar brands. About 29% said they would be likely to purchase CBD in the next six months.
Where the Opportunities Lie
For CBD startups, the women’s market for might be one smart place to focus, considering that male survey respondents were far more likely (21%) than women (12%) to spend more than $100 per month.
Another wise move might be to market only products backed by clinical studies and clear, authoritative information. The reasons here would be the importance consumers put on reliable information, as well as the strict FDA restrictions against promoting CBD for medical purposes.
Infusions as a method for consumption also seem to be of growing interest, while smoking is losing users due to social norms, especially during the current COVID-19 crisis when so many cannabis medical users are housebound.
Finally, given the anxiety during the crisis and the prevalence of word of mouth in spreading information about CBDs, companies might want to turn to such marketing channels as referral discounts, loyalty programs and high-production-value consumer testimonials, according to the New Frontier Data report.