The first of two days of the CBD Retail Trends Virtual Conference presented by CStore Decisions and CBDRetailTrends.com, and sponsored by Forth CBD and Solari Hemp, featured plenty of evidence of rising trends in CBD product demand as well as sound advice for retailers getting started in bringing the benefits of hemp-CBD to their customers.
Moderator and CStore Decisions Editor-in-Chief John Lofstock welcomed three speakers, two from the convenience store retail industry and the third from an industry analyst group.
For those looking for hard data, Don Burke, senior vice president of Management Science Associates, was the speaker with the numbers. Burke used a slide presentation to break down the entire CBD industry by product, demographic and sales trends.
Much of what Burke presented underscored that the CBD consumer is very much the convenience store consumer. CBD users are more likely to be men aged 18-49 years old. Blue collar and service industry workers with annual incomes under $50,000. And more than three-fourths of all CBD purchasers spend up to $100 per month. That’s a reliable customer base.
Further good news for c-store CBD sales, buyers are also two to three times more likely to be tobacco consumers. “And this cuts across all forms of tobacco,” said Burke.
Which Products Sell?
As it is now, when consumers opt to use CBD, they strongly choose edibles, with CBD gummies far outselling all others. Burke showed that edibles top the list of CBD form in purchases at 37%. Topicals run close behind at 32%.
But these consumers aren’t looking for hemp-CBD products for fun, Burke advised. Burke’s data showed that the top motivators for CBD product usage have been medicinal – not recreational. The top three reasons are to treat temporary or minor pain, help with depression and anxiety, and treat chronic pain.
For many consumers, ingesting CBD is still something they may be unsure about. Topical products – creams, roll-on gels, etc. – are on an uptick, Burke said. Topicals are the only form of CBD product to show gains in each of the final three quarters of 2019. And there’s a reason for that.
“Topicals are kind of the safe alternative for CBD,” said Burke, “because it’s placed on the body, not inside the body.”
As CBD gains in usage across a wider spectrum of society, that hesitancy will decrease and consumers will gravitate even more to ingestibles, including tinctures and beverages. And while Burke’s most recent data show that c-stores are fourth on the list of channels for CBD purchases, retailers should be ready with an array of hemp-CBD products to offer those curious new customers.
CBD on the Shelves
Two retailers whose chains have begun carrying CBD products informed listeners about the strategies of sales and, more importantly, how essential the quality of the product is to successfully capitalize on the coming CBD surge.
“If a consumer gains no benefit from it, it’s detrimental not only to that SKU or brand, but to the whole category,” said Paul Crozier, category manager for cigarettes and tobacco at Altoona, Pa.-based Sheetz, with 600 stores in six states. Sheetz carries CBD products in its Pennsylvania stores.
When choosing a supplier partner, look for transparency, he said. And do your homework. Vendors should be able to provide certificates of analysis by a reputable testing agency. Ask for tracing of all aspects of production and certificates of insurance. Verify vendor financials through Dun & Bradstreet. Discuss the issues with your legal team.
Crozier advised being wise about placement of CBD product displays in the store. His stores keep it behind the counter, much like tobacco products, especially with high-priced products like tinctures with a $39 price tag.
With the same idea in mind, VERC Enterprises Retail Manager Mike Vercollone prefers to have much of the product displayed on the counter, directly next to the register. Why?
“This gives associates a chance to have a conversation and educate customers on CBD,” he said. VERC operates 33 locations in Massachusetts and New Hampshire. Just this week, VERC opened a CBD Wellness Center at its flagship store in Plymouth, Mass.
VERC staff are trained by his top CBD vendor, Ceres Natural Remedies. His workers can knowledgeably engage customers, answer their questions and educate them on how the products can benefit them.
Vercollone stressed that VERC encourages its customer to ask questions about CBD. Signage at his stores invites them to ask about it and search the benefits of CBD on Google.
The goal is to get the consumer to believe in the product as much as he and his company do. That’s why VERC offers a cash refund guarantee on its CBD purchases. It hasn’t happened yet, but when it does, Vercollone said, it represents a perfect opportunity to direct the customer to a different brand, method or level of CBD use.
Quality is the No. 1 Ingredient
Both retailers warned to steer clear of manufacturers who refuse to let you see their facilities. Vercollone said that it’s essential that even his employees tour the production facilities and the maker offer to provide training to public-facing staffers.
Crozier and Vercollone also recommended placing information fact sheets, brochures or similar information on CBD’s benefits within easy reach for customers to take with them. It’ll also save time in the checkout lane when they have questions and ease their entry into a conversation.
While the retailers agreed that there’s a lot of legwork involved in educating customers and bringing them a quality CBD product, it’s time well spent to get ahead of the curve and have stock on the shelves when demand inevitably hits the convenience store channel.
Day 2 of the CBD Retail Trends Virtual Conference starts at 2:00pm, Thursday, May 7. To register, visit CBDRetailConference.com.