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Big Companies are Getting Into CBD – What Does the Future Hold?

Ever heard the old saying, “During a gold rush, sell shovels”? It’s a quick and colorful way to say that when everyone is making money in one business, smart companies can stand out from the pack by meeting a need that’s complementary to the “big boom.”

That’s exactly what’s going on in the CBD industry at the moment.

The white-hot CBD market — which could reach $20 billion by 2024[1] —  is already crowded with big and small companies hoping to reap the early mover advantage. Recent encouraging developments — from the 2018 removal of hemp as a Schedule I controlled substance, to bipartisan support for legislation that would allow the FDA to market CBD as a dietary supplement — have pushed even more entrepreneurs to enter the field.

But what about the big companies that produce and market products that meet a similar need as CBD does? It’s becoming common knowledge that CBD can help with anxiety, chronic pain, inflammation, trouble sleeping, mood issues and more.

The growing popularity of CBD has pushed certain CPG (consumer packaged goods) industries to try to understand how they can capitalize on the CBD trend. The food and beverage, specialty drinks, beauty and wellness industries are all grappling with the question of what impact CBD will have on their industries.

Just like the smart shovel sellers during the Gold Rush, key players in the above industries are fast realizing that incorporating CBD offerings is not only the most logical path forward, but perhaps unavoidable at this point.

Beverage Companies Get In On The CBD Movement: These Are The Big Trends

CBD’s versatility is a large part of its appeal. Zero THC varieties of CBD products contain no psychoactive ingredients — a key point that turns CBD extract into an enticing building block for aspirational lifestyle products that may improve mood, boost energy and promote a sense of calm.

As with all CBD products, there is a wide range of options to fit every kind of need. At the base are CBD-infused soft drinks like seltzer and sparkling water. Recess is one of the big brand names that has built some buzz with its CBD-infused carbonated water. Other players include Bimble, DRAM, Mountjoy, Queen City Hemp, and Sprig.

You can see a lot of commonality in the marketing of all of the above products — many tout the organic ingredients, sustainable processes, non-toxic nature and adaptogenic benefits of their beverages. Their packaging is colorful, clean and modern, and choices abound: CBD concentrations range from 5 to 25 milligrams per serving.

And don’t forget pets! Brands like Lynk, from the American Premium Water Corporation, are making CBD-infused water designed specifically for dogs. Touting benefits like pain relief, seizure treatment, and anxiety reduction, Lynk is capitalizing on the growing realization that CBD may have important benefits not just for people, but for the animals they love, too.

While non-CBD sparkling brands like La Croix, Spindrift and Sodastream have not yet stepped into the CBD-infused water market, CBD specialty water brands have surely taken their marketing cues from those big players, especially due to the sharply increased demand for sparkling water in just the last decade.

Similarly, the alcoholic and caffeinated beverage industries have the advantage of being extremely well-established. People’s desire to relax and celebrate (with alcohol) or to feel more awake (with caffeine) is as old as time, and they don’t seem to be going away any time soon!

That’s why CBD-infused teas, coffees, kombuchas, and alcoholic drinks are becoming so popular. The broadness of these categories — as well as the fact that CBD in different concentrations and different formats can help people in so many different ways — means there is a virtually infinite number of combinations available.

Online and in specialty stores, you can find CBD-infused matcha green tea (Living Loose Leaf is one brand offering this), CBD-infused kombucha (CBD Chaga Chai Kombucha by Aqua ViTea is one variety), CBD-infused coffee (Flower Power Coffee is one big name in the space) and more.

You can also find accounts from countless fanatics on message boards detailing how they used CBD isolate powder, extract or some other method to infuse CBD into a drink on their own — though we wouldn’t recommend that.

The story with CBD and alcohol is a bit more complex — and very fascinating. Alcoholic beverages represent big business, and there is at least a perceived overlap in the target demographic of those who enjoy alcohol and those who might benefit from CBD.

Constellation Brands, a conglomerate that owns Svedka Vodka, Corona Beer, Prisoner Wine Company and more, paid $4 billion for a 38% stake in Canopy Growth in 2018[2]. Canopy is the world’s largest cannabis company. This move appears to suggest a significant strategic partnership, but the details are being played close to the vest due to the magnitude of such an offering and the matter of ongoing regulatory questions.

Similarly, Anheuser-Busch, the owner of Budweiser, signed with another large cannabis company, Tilray, to introduce non-alcoholic beverages that will contain both CBD and THC. Those products will be rolled out only to the Canadian market initially.

Food Companies Offering CBD: A Large Range of Offerings, Indicating High Hopes

As with the perceived overlap between the alcoholic beverage market and the CBD market, there is a certain synergy between the snack market and the CBD market.

First, there is the issue of convenience. Certain demographics who may benefit from CBD could be unwilling or unable to use it in some of its more unusual formats. For instance, people who suffer from Parkinson’s or Alzheimer’s may have trouble holding sublingual tinctures under the tongue or inserting a suppository pill rectally. But those same people should have no physical or psychological trouble eating a gummy or enjoying some other CBD-infused snack.

There has certainly been a wide range of CBD-infused snack products released already — everything from CBD-infused chocolates to CBD-infused cookie dough and everything in between. There is also a multitude of DIY recipes that people have created at home. (Again, we don’t recommend going the at-home chemist route!)

But as with the partnership between CBD and alcohol, it’s most telling to see where the biggest brands have put their money. Mondelez International, which owns Chips Ahoy, Nutter Butter, Oreo, Triscuit and more, announced in 2019 that it is deep in development on CBD-infused snack products, but it won’t be debuting anything until it feels that the dust has settled as far as FDA regulation is concerned.[3]

CBD And Beauty: A Match With Infinite Possibilities

The link between CBD and beauty/wellness is already well-established. Many of the biggest CBD companies consider CBD beauty products to be the linchpin of their offerings.

This is for a variety of reasons: first, the beauty market is massive and growing annually as the population gets older and more anti-aging ingredients are discovered and refined. Second, beauty products may enjoy a lower barrier of skepticism. Just as someone who doesn’t drink caffeine may be eager to try a caffeine-infused skin-tightening eye cream, people who are wary of ingesting CBD for whatever reason may be eager to test CBD’s anti-inflammation, anti-odor, and soothing qualities topically.

Massive beauty conglomerate Unilever has already made a big bet on CBD beauty products with its purchase of Schmidt’s Natural. Through Schmidt’s, Unilever has introduced a CBD-infused deodorant, which it has made available nationwide at Target.

Smaller, more agile beauty brands with an “edgier” reputation — like Milk Makeup, Milani Cosmetics, and Cannuka — have already introduced CBD-infused mascaras, skin tightening creams, eye brighteners and more. Their marketing plays on the “green” theme, and in many cases, product names blur the lines between CBD/hemp/THC/cannabis, as with Milk’s “Kush Mascara” series, which includes a “Puff Puff Brush.”

CBD: A Miracle Ingredient That Big Brands Are Looking To Add To Their Lineup

All told, the investment that massive, household names are making in CBD-infused products is absolutely remarkable. Big companies that have everything on the line are placing a bold bet on CBD — and the data absolutely supports that this is the right thing to do.

But interestingly, the restraint that some of these big brands are showing in their slowness to roll out their CBD products tells a story as well. The brands recognize that the landscape is shifting fast. They find it more advantageous to sit on their CBD products for the moment — though it no doubt means lost profits and a missed opportunity to garner prestige — because they’re betting that CBD-related regulation will be much clearer (and probably more permissive) very soon.

In the meantime, smart consumers would do well to shop at high-reputation CBD shops that have demonstrated a strong commitment to pure sourcing, rigorous 3rd party testing and clean production — like New Coastal. New Coastal offers a wide range of CBD supplements, gummies, health/beauty/wellness products and more to suit a variety of your needs.

[1] https://www.forbes.com/sites/irisdorbian/2019/05/20/cbd-market-could-reach-20-billion-by-2024-says-new-study/

[2] https://www.barrons.com/articles/canopy-growth-acreage-marijuana-constellation-brands-51555953607

[3] https://www.cnbc.com/2019/05/01/cannabis-fans-may-get-wish-as-oreo-maker-mondelez-eyes-cbd-snacks.html

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