If you think you’re seeing CBD everywhere you look these days, well, you are.
A Grail Insights 2019 survey of 1,069 US consumers reveals how attitudes towards and usage of CBD are set to impact a range of industries, from traditional pharmaceuticals to FMCG.
CBD – the non-psychoactive cannabinoid, rumored to be the cure for nearly everything, is taking the world by storm. Commonly known as CBD oil, Cannabidiol is derived from the cannabis plant but is a non-psychoactive compound – unlike cannabis’s other main component, Tetrahydrocannabinol (or THC). In other words, CBD is said to deliver therapeutic benefits without the high.
CBD sales are expected to soar from $591 million globally in 2018 to $22 billion worldwide by 2022. Given this level of projected growth, we had to ask, what are consumers giving up in favor of CBD? What do industries stand to lose as a result of CBD adoption? And if they are fast and agile enough, what do they stand to gain?
Grail’s proprietary research measured the impact CBD is already having on well-established markets such as pharmaceuticals, personal care, beverages, alcohol, tobacco, and caffeine.
Check out our TOP TEN CBD takeaways from our US survey.
In the US, 85% of people are aware of CBD, and one in five have tried and/or are already using CBD. Of those unaware or who haven’t yet tried CBD, over 60% of US consumers are interested in doing so. This shows a large addressable market for CBD as curiosity is high and the news coverage of CBD as a ‘cure all’ has many consumers interested.
Recent articles like this one in the New York Times are exploring CBD’s efficacy in treating certain seizure disorders, as well as everything from anxiety, depression, and pain to Alzheimers and Crohn’s disease. What is for certain is that this market is in high demand.
For traditional health and mood management providers (we’re looking at you, Big Pharma), CBD is eating your lunch. Nearly two-thirds of CBD users are trading traditional pharmaceutical products for CBD products. While many of these new CBD-infused products are vague on health claims, consumers are increasingly open to change.
Our survey shows that 38% of American adults have been diagnosed with joint pain or migraines. Nearly one in six of them are using CBD to manage that condition. Of those, over 50% find CBD effective in managing the condition and 30% have given up their medication in favor of CBD.
The same number of Americans, 38%, are currently diagnosed with stress, anxiety or depression. Of that group, over one in five use CBD to attempt to alleviate the condition. Of that group, 73% find CBD effective and 30% of those taking CBD for these conditions have given up their regular medication in favor of CBD.
The numbers are similar for those suffering from insomnia. Overall 16% of Americans are currently diagnosed with insomnia, and of those nearly 1 in 6 is using CBD to address it. Of that group, three-quarters find using CBD effective and 40% have given up their medication in favor of it.
Despite the nascency of the CBD market, its impact on traditional pharmaceuticals is undeniable. And considering the interest levels of those who have yet to try the compound, this impact is set to grow, and quickly. CBD may, in fact, be the largest disruption we’ve seen to the traditional pharmaceutical industry to date.
The top three drivers for CBD usage in the US are stress, pain, and anxiety/depression management. This is even higher for younger Americans, with 62% of CBD users between the ages of 18-35 saying they use it for stress and 51% reporting they purchased it to manage anxiety and depression. These are double the numbers compared to those 35+. Meanwhile, for the older cohort (35+), pain management (joint pain, migraines) is the highest driver for CBD purchase, double the percentage compared to those 35 and under.
Given these disorders have been traditionally treated with pharmaceuticals, CBD poses a huge threat to the industry.
The way consumers are introduced to or sold on CBD is largely through personal recommendations, especially amongst 18-35-year-olds.
As is typical of a fast-growing market, there is a near-constant flow of news coverage on CBD. News is the largest source of awareness overall in the US at 53%.
Friends telling friends has been key to CBD’s meteoric rise in awareness and adoption. Nearly two-thirds (65%) of those who tried/use CBD said they heard about it through friends and family. The word is spreading online as well with 46% of CBD users gaining awareness through social media. And store staff play a key role in helping new and returning customers, with 31% saying that store employees are a source of awareness for them.
Younger Americans are listening to guidance and recommendations from store staff. Compared to those 35+, three times as many 18-35 users learn about CBD from store staff.
Interestingly, 10% of those who tried CBD for the first time received it as a gift, underscoring CBD as a peer-to-peer phenomenon.
We asked consumers how they first tried CBD and how they use it regularly. Oil extracts are quite commonplace and show a high level of awareness, trial, and regular usage. There is potential overlap for oils with vaping devices, given that consumers are using oils both topically and as add-ins to vaping devices.
While oils are the most prevalent format of choice for first time users, consumers who try CBD in candy form are twice as likely to keep using it. Most formats see an uptick between trial and regular usage. However, our research shows that capsules/pills are the least compelling format for ongoing usage.
What do these findings suggest? While many consumers are turning to CBD to treat issues commonly addressed through pharmaceuticals, they are also eager to embrace the new and more pleasurable formats CBD offers. How a benefit gets delivered is a key part of the benefit.
Although CBD has only been widely available in the last two years, it has already grown significantly among alcohol and nicotine users. One in five reporting regular or occasional alcohol consumption has already tried CBD. Of those, nearly half are using it regularly.
For alcohol users, CBD is a lower calorie alternative to the relaxation and stress management benefits of alcohol. And for tobacco users, the benefit is even more obvious - CBD is perceived to lower stress and bring relaxation but without the social stigma, cost and negative side effects of cigarette usage. Big tobacco, take note: one in three US smokers has already tried CBD, and 1 in 10 are regular users. An additional 56% are interested in trying it.
Unsurprisingly, 38% of regular vapers (who are already 8% of the US population) have tried CBD, and just under half of those are regular CBD users. Given the popularity of vaping devices as a CBD delivery format, this penetration rate is unsurprising and shows the opportunity for device manufacturers to drive increased usage.
Consumers report the CBD experience as overwhelmingly positive, with 69% of the Americans that have used CBD, willing to recommend it to their friends/family.
Still wondering if the market represents an opportunity? Consider that 60% of US CBD users are willing to pay more for a CBD product, based on the experienced benefits. One-third of users said they would be willing to pay between 20-40% more for a CBD infused or specialty product.
Specialty CBD stores (likely overlapping with specialty vape stores) are the most popular purchase source (41%). This correlates to the popularity of oils and vaping devices as popular formats. However, when we look at those sources among those who use CBD regularly, online and specialty stores are by far the most popular (52% and 47% respectively).
CBD products are already available in mainstream locations such as supermarkets, with 18% of regular users purchasing there. The plethora of channel availability for CBD puts this compound at a unique advantage - few other ‘mood management’ products (alcohol, cigarettes, pharmaceuticals) perhaps with the exception of caffeine are as widely available to consumers in a variety of outlets. You can’t buy Prozac at the grocery store, and alcohol isn’t on the shelf at most drug stores. But CBD providers have a considerable advantage in that products are widely available nearly everywhere consumers turn.
CVS Health announced earlier this year that it would carry CBD topical products in 800 of its stores across eight states. Walgreens Boots Alliance followed with a corresponding move to carry CBD-containing topicals in nearly 1,500 of its U.S. locations. Most recently, Rite Aid joined the party, announcing plans to carry CBD products in two states.
Despite its popularity in the news, there is still considerable confusion and wariness around CBD. Not trusting the claimed benefits was listed as a barrier by 24% of people who had not yet tried it. One in five said that it was “not good for me – it’s marijuana” and 20% felt that because it is not prescribed by a doctor they would hesitate. A similar number reported ‘not being aware of the side effects’ as a limiting factor.
As usage increases and major brands enter the fray, these barriers are likely to be worn down. Unilever has announced an upcoming CBD-based deodorant product from its Schmidt’s Naturals brand (and a marijuana version in legalized marijuana states). There are also rumors that Coca-Cola is interested in joining the CBD race.
We have user insights by varied demographics and we are actively tracking the changes in this fast-moving market. Do you need to measure the impact of CBD on your business or better understand the competitive landscape? Need help positioning a CBD product, or understand dosage and format comparables? Grail Insights can help. Contact us today at firstname.lastname@example.org
You can also find out 5 Things Marketers Should Know About CBD Usage in the UK. Check out usage and trial insights from 1,013 UK consumers. It may surprise you.
I’d like to receive occasional news and insights from Grail.