Coronavirus prompts spike in e-commerce sales of CBD; consumers seek higher dose products – FoodNavigator-USA.com

“As the response around COVID-19 has ramped up and stores are shutting down, we are seeing e-commerce sales spike amongst some of the largest CBD companies,” ​said Brightfield Group​ managing director Bethany Gomez.

But she added: “Questions abound on whether this ​[spike] is ​[just a reflection of] people stockpiling, just as they are stockpiling toilet paper and rice, or if this is an indicator of future usage.”

And while consumer survey data (see below) indicates that CBD usage may grow as people engage in ‘self-care’ during a lockdown, “many brands will be disproportionately affected​,” she predicted.

“The industry was already suffering from overcrowding; we are tracking more than 3,500 brands in early 2020; and limited access to capital, which was making it very difficult for many brands to keep the lights on before the crisis. Many of these brands have lost tens of thousands of dollars tied up in trade shows that have been canceled, putting them in a vulnerable position coming into the heart of the crisis.”

CBD and self-care: ‘many are turning to self-care indulgences to keep themselves sane’

That said, new consumer research [conducted March 16-19] “indicates we can expect increased consumption, particularly amongst heavier users which is a positive indication of how the market may fare over the weeks and months to come,”​ she added.

“Anxiety is the #1 ailment of CBD users; 53% of them report it. Depression and insomnia, which likely to spike over the coming months, are #3 & 4. For those that truly need CBD and are relying on it for their health and wellbeing, consumption is expected to continue or increase.

“Interestingly, when we analyzed the social media posts involving CBD and the coronavirus, we found that the most common topic people were discussing was self-care. With so much of the country in quarantine right now, many are turning to self-care indulgences to keep themselves sane and even just pass the time, which is likely to help boost some CBD self-care products during quarantine time.”

Cloud Water 4 flavors

Cloud Water Brands CEO: Tough times can breed ‘innovation, creativity and scrappiness’

While there is not (yet) much clinical data proving that small doses of CBD can reduce anxiety and aid sleep (click here,here​, here​ and here ​to read about some small scale studies relating to public speaking, PTSD etc) consumer survey data shows that consumers are buying CBD products for pain, anxiety, and sleep.

And right now, a lot of people are very anxious, and have difficulty getting to sleep and staying asleep, said Marc Siden, co-founder and CEO at Cloud Water Brands​,​ which infuses its sparkling beverages with 25mg of CBD isolate, organic raw honey, juice concentrate and natural flavors (40 calories/12oz alluminum bottle).

He told FoodNavigator-USA: “We had some pretty large orders come in this week from our distributors, and if you think about CBD’s properties, people can turn to alcohol or THC ​[during periods of anxiety] but most people have to keep functioning during the day, and we’re seeing CBD as being very appropriate to the times.”

‘There are buyers that are still sitting at home and working… make a creative video presentation and get that in front of buyers’

As for onboarding new brands during a pandemic, it’s clearly not a top priority for retailers right now, but a crisis can “breed innovation, creativity and scrappiness​,” he said, noting that investors will not be expecting “hockey stick growth​” from new brands right now.

There are buyers that are still sitting at home and working, and if you make a creative video presentation and get that in front of buyers, you can really get their attention,” ​added Siden, who sells his wares through bricks & mortar retailers in New York (via Big Geyser), Los Angeles (via several key distributors in southern California), and Miami (via Sysco), and also has a direct to consumer​ business.   

Retailers and CCB-infused beverages: ‘Everyone wants to sell it, it just depends on where they are on the risk curve’

While a lot of CBD-infused beverages have hit the market lately, just slapping ‘CBD’ or ‘hemp extract’ on the front of a bottle and charging a premium is no guarantee of success, said Siden, who says customers are using Cloud Water beverages to replace an afternoon cup of coffee, or before a morning meeting, or even as a cocktail or mocktail mixer. The mix is around 65:35 female to male with a focus on Gen Xers and Millennials.

The water soluble CBD isolate used in the beverages is emulsified using a process developed by Cloud Water COO Dr Carol Dollard, a beverage industry veteran with a PhD in biochemistry, said Siden. “We chose an isolate because we wanted a consistent product with no THC. We put QR codes on the packaging so consumers can see exactly what is in there, which breeds trust and transparency.

“On the formulation side, we have been very thoughtful about how carbonation impacts flavor and taste and to ensure that the CBD stays ​[in suspension] throughout the 12-month shelf life, so you don’t open the bottle and see oil on the top.”

As for the regulatory climate, several retailers have got Cloud Water Brands in their systems, but are waiting for the FDA to provide clarity on CBD before introducing CBD-infused foods and beverages into stores, added Siden, who is working with a co-packer on the east coast, but will explore options in the west coast as the brand grows.

“Some retailers can’t stock enough because it’s selling like hotcakes, but others are waiting for the FDA. Everyone wants to sell it, it just depends on where they are on the risk curve ​[right now, the FDA says CBD is not a legal dietary ingredient in foods, beverages or supplements as it was first investigated as a drug, but is working on carving a regulatory pathway].”

Soul Grind Family Shot

Chris Cuvelier: ‘I don’t think people will be spending 6, 7, 8 dollars a bottle [in a recession], but we’re offering something that’s 50 cents more than a Starbucks cold brew, with functional benefits’

Zola​ beverages founder Chris Cuvelier – who took the helm at a new beverage division at cannabis company Caliva​ last year after it acquired his business – has just launched a new CBD-infused beverage brand called Soul Grind​featuring 100mg of caffeine from organic cold brew coffee and 10mg of hemp-derived CBD from a broad spectrum extract (no THC).  

Cuvelier – who like Siden – was hoping to make a splash at Expo West earlier this month, conceded it was a challenging time to launch a new brand, which he had just managed to get into close to 100 stores in California before coronavirus hit.

However, the company has quickly launched a direct to consumer site​ enabling shoppers to buy Soul Grind online, and while meetings with most retail buyers have been delayed, some are beginning to emerge from their bunkers and look to the future, said Cuvelier.

While budgets tighten during a recession and many consumers have to cut back on premium products, they are still looking for value and CBD delivers a functional benefit, he said. “I don’t think people will be spending 6, 7, 8 dollars a bottle, but we’re offering something ​[Soul Grind is $4.99 everyday or $3.99 on deal] that’s 50 cents more than a Starbucks cold brew, and we’re delivering 10mg of broad spectrum CBD.”

All eyes on AB 228 in California

From a regulatory perspective meanwhile, everyone is hoping for the swift passage of Assembly Bill 228​​​ (which would permit for the retail sales of compliant CBD-infused food, beverages and supplements in California) and for the FDA to provide some clarity at a federal level, he said.

“Everyone wants to stock these products, but major retailers are all waiting ​[for regulatory clarity]. Right now, we’ve got three flavors (black, vanilla, and Mexican chocolate) but six SKUs. Three say ‘hemp extract’​ [for retailers that don’t want to stock products referencing ‘CBD’] and three say ‘hemp CBD’.”

‘Booming’ cannabis sales at Caliva

caliva

The cannabis operation at Caliva, a vertically integrated business which sells its wares online at caliva.com​ and distributes them via its dispensaries across California (which remain open as they are deemed ‘essential’) has seen “booming​” sales both online and through its dispensaries (which also offer curbside pickup) said Cuvelier.*

“It used to be about two thirds retail and one third home delivery, and now we’re seeing that flip flop.

Because cannabis is used for anxiety, pain relief and sleep, these plant-based solutions are a must for people.”

*Caliva offers three shopping options: curbside pickup, delivery, and in-store retail. For home delivery, customers can order online at Caliva.com for products to be delivered to their door.

A report on CBD delivered by FDA Commissioner Dr Stephen Hahn, MD, was seen by food and dietary supplement industry stakeholders as offering little hope of a timely regulatory solution for the ingredient. Read more HERE

Source: https://www.foodnavigator-usa.com/Article/2020/03/26/Coronavirus-prompts-spike-in-e-commerce-sales-of-CBD-consumers-seek-higher-dose-products