June 30, 2020
Key Insights from The Impact Series: Disrupting Drinks
Disrupting Drinks is the latest report in The Impact Series — Prohibition Partners’ suite of in-depth reports detailing the impact of cannabis across key consumer markets — and the first in the series to feature brand new in-depth consumer research and polling. Disrupting Drinks offers a comprehensive deep dive into the emerging cannabis drinks market, evaluating the key consumer profiles, market trends and commercial opportunities in the fast-growing space.
Cannabis is fast becoming one of the most disruptive influences in the trillion-dollar global drinks industry. Already penetrating nearly every segment of the traditional beverage market — from teas to alcoholic beverages to soft drinks — cannabis-infused beverage products have turned the heads of prominent brands such as Constellation Brands, Molson Coors and Anheuser-Busch, attracting investment and partnerships between these power players and smaller cannabis start-ups.
The Impact Series: Disrupting Drinks details the result of Prohibition Partners’ unique consumer research polling, covering over 15,000 adults across seven country markets in across North America and Europe, to evaluate usage, purchase and attitudes towards cannabinoid-based products. The report aims to provide a deeper understanding of the key consumer profiles, regulation, commercial opportunities, and latest market trends present in the evolving cannabis drinks sector.
Understanding the cannabis drinks market
In the context of the cannabis beverage space, the US and Canada can be considered mature markets. Cannabis-based beverages have been legal for sale in Canada since late-2019. In the US, such beverages can be purchased in select states with legal recreational cannabis laws, although most of these products do violate federal food and drug regulations.
These two more developed markets also appear to have the strongest base of potential users for cannabis-based drinks. Prohibition Partners consumer analysis finds that 48% of Canadian adults and 45% of US adults either have tried, or would be willing to try drinks products infused with cannabis or cannabidiol (CBD)/hemp extracts. For comparison, Italy holds the most potential for CBD drinks in the emerging European market with 36% of Italian respondents interested or active in the drinks market. France reported the lowest levels of interest in Europe, with just 22% of French respondents expressing interest.
In terms of the motivation behind using these cannabis beverage products, one in five consumers surveyed said that they used cannabis drinks as a replacement for intoxicating substances such as alcohol — illustrating the threat these products could pose to the alcoholic beverage market. In mature markets and among current buyers of CBD/hemp-infused drinks, it was found that improving sleep, health and wellness, and mood were also main drivers for consumption.
A profile of the cannabis drinks consumer
Prohibition Partners finds that the overall majority of cannabis/CBD/hemp-infused drinks consumers are men. However, in emerging markets where THC-infused products are not available and the market focus is on health and wellbeing, women are much more likely to dominate the consumer space.
Approximately one-quarter of recent cannabis drinks buyers are aged between 25 and 34 years old, with the next largest market segment — those aged between 35 and 44 years — making up a further 23% of the current consumer base. With over half of recent CBD/hemp-infused drinks buyers being in full-time employment, this would suggest a significant consumer base which not only has the available disposable income to use on such novel products, but that also may be actively seeking ways to unwind after long days of work and commuting.
In mature markets, where intoxicating tetrahydrocannabinol (THC) infused products are available, Prohibition Partners’ consumer research finds that there is generally a younger slant associated with the consumer base. Here, cannabis-based drinks products may be more likely to thrive by appealing to the aspirational and carefree lifestyles of this younger base. Conversely, in emerging markets there is a higher proportion of older people (aged 55+) who have purchased CBD or hemp-infused drinks, indicating a greater importance of appealing to consumers concerned with health and wellness.
Market forecasts in the time of coronavirus
Given the still-hazy legal status of cannabis-based drinks in many major markets, the lack of mainstream distribution, and the effects of the current coronavirus pandemic, Prohibition Partners estimates the global cannabis-based beverage market will reach US$1.82 billion in 2020, down from an initial US$1.89 billion figure that was anticipated before the COVID-19 outbreak.
An increasing number of problems in accessing products is expectedly to have the greatest impact on CBD/hemp-infused beverage sales, rather than any changes in consumer behaviour as a result of COVID-19 or the measures put in place to restrict its spread. From consumer polling, Prohibition Partners can reveal that almost three-quarters of recent consumers have said that they will either buy more products, or that there will be no changes to their purchasing behaviour as a result of COVID-19. Younger buyers (aged 16-24) are expected to purchase fewer beverage products as a result of decreases social opportunities, while parents of children under the age of 18 are the most likely group to report an intention to buy more products. This increased want for these products is thought to be tied to a desire to unwind from the stress of maintaining a healthy work/life balance under quarantine measures.
It is anticipated that the cannabis-based drinks market will begin to expand rapidly in coming years as cannabis edibles become legal in more major world markets, and as current strict CBD regulations begin to ease in key regions. By 2024, the global cannabis-based drinks market is expected to be worth up to US$5.8 billion.
The future of the drinks market
Cannabis-based beverages have the potential to become a multi-billion dollar global industry within the next decade. To see this potential made reality, the industry will have to successfully navigate the impact of COVID-19 on supply logistics and consumer attitudes. Further clarity over product regulation will also be needed to properly facilitate the growth and development of this dynamic cannabis sector.
As the industry looks towards a post-coronavirus world, there will be room for a product which trades largely on its ability to soothe anxiety in uncertain times. Similarly, following after a respiratory disease outbreak, there may also be further interest in novel cannabis product formulations that do not require smoking or vaporising.
To learn more about cannabis’ impact in the drinks market, as well as the key market players, innovations, and commercial opportunities, purchase and download the full The Impact Series: Disrupting Drinks report here.
Key Insights from The Impact Series: Disrupting Drinks
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