Study: CPG Suppliers & Retailers Must Catch Up to Consumer Demand for CBD
NEW YORK — While rapidly changing consumer attitudes toward CBD products continue to drive consumer demand and market growth is expected to reach $24 billion in North America by 2023, many retailers and manufacturers are still catching up and struggling to meet that demand.
This puts billions of dollars in sales in play, according to global management-consulting firm A.T. Kearney's 2019 CBD Market Survey, which polled consumers who had an awareness of cannabis or CBD.
"The survey is part of our ongoing efforts to track consumer acceptance of both hemp-derived CBD and marijuana as laws and regulations evolve. We want to understand the obstacles blocking broader acceptance and their impact on sales," said Bryson Waterman, a principal in A.T. Kearney. "We believe that, if they really want to be successful in this market, consumer goods companies and retailers have to get actively involved in consumer education while establishing a reputation as sources of accurate, fact-based, information."
Results from the survey revealed four key points:
Consumer awareness of and interest in using CBD products shows no signs of slowing down.
Sixty-eight percent of respondents have used or know someone who has tried CBD, while 73 percent have had positive experiences and intend to use it again. This represents a potential North American consumer market consisting of at least 200 million people, according to A.T. Kearney.
Despite this, a significant CBD information gap exists.
While 72 percent of respondents believe CBD provides wellness and therapeutic benefits, just 29 percent felt well informed on its uses. Respondents reported turning to the Internet (63 percent) or word of mouth (49 percent) for information on CBD.
CBD-based products are becoming a significant part of daily wellness routines.
This includes CBD products as replacements for and/or additions to existing products. Fifty-seven percent of respondents indicated that they are turning to CBD as a substitute for existing products; 56 percent have already replaced wellness products with CBD; and 44 percent use CBD as a complement to other wellness products.
Before they can gain full advantage of a CBD market value estimated to reach $24 billion by 2023, branders and retailers need to take a more aggressive role in consumer education.
They can do so by using integrated merchandising strategies to position CBD as a destination category, and mandate supply chain transparency to drive trust and guarantee quality.
"It is exciting to see the emergence of a new industry. The challenge for large consumer companies is to react quickly enough to capture consumers during the fast-growth phase. By waiting too long for the trend to prove out, incumbent players risk buying into a market where the growth has started to slow," said Greg Portell, global head of the consumer and retail practice at A.T. Kearney. "Like any new industry from organic foods to eco-friendly fashion, it's critical that we listen to consumers and don't take too long to show we hear what they are asking for."