Manufacturers will step up education efforts to health care providers, targeting their role as CBD wellness influencers.
So, does anybody really know what the future holds for the burgeoning hemp-CBD marketplace? Probably not – at least, not exactly. Still, CBD Retail Trends asked Rich Maturo, vice president for cannabis practice, one of the most knowledgeable experts working with the folks at Neilsen, an organization known for having its finger on the pulse of consumer trends and markets.
CBD Retail Trends: In a nutshell, what’s the current state of the CBD market in the U.S.?
Rich Maturo: Activities initiated by the Food and Drug Administration (FDA) will continue to affect the evolving hemp-based CBD marketplace in the U.S. over the next decade. As cannabis-curious consumers and companies wait for additional guidelines from federal regulators, Nielsen believes that brands, marketers and consumers will have a big appetite for data and information about cannabis in 2020, giving us a peek into what a cannabis-rich consumer packaged goods (CPG) landscape could look like.
CBDRT: Dollar-wise, what’s the outlook for the CBD marketplace?
RM: We project that the U.S. hemp-based CBD market could be a $2.25 billion to $2.75 billion industry in 2020. These conservative projections already account for hampered FDA rulings and other possible speed bumps for the hemp-CBD marketplace.
CBDRT: With a patchwork of laws governing the hemp-CBD industry, what can retailers expect in the coming year from the CBD marketplace, especially in the area of medical uses for cannabidiol?
RM: While the regulatory roadmap remains ambiguous, one thing is clear: The next decade for the hemp-based CBD market has the potential to be a game changer for the traditional CPG and retail industry. A handful of developments in 2020 may tip the scales for manufacturers and retailers. These developments will play out as federal regulators align on the legality and safety of hemp-based CBD consumer products.
One of those developments involves educating the medical community about CBD:
Targeted Educational Efforts Will Rise
While education will remain a necessity for hemp-based CBD manufacturers and retailers, expect a rise in manufacturer-driven, educational efforts to hit health care providers. Nielsen’s Q4 Health Care Practitioner Tracking Study found that although 70% of the practitioners surveyed said they discuss CBD with their patients, only about one-in-three practitioners were knowledgeable about the laws surrounding hemp-CBD.
If the medical community is properly educated, its influence will be profound for the hemp-based CBD industry. In fact, over the next decade, Nielsen believes that primary health care practitioners may do more to drive trial and brand/format loyalty than traditional branding and marketing efforts. Nielsen’s Thinking Beyond the Buzz study found that medical advice is a major motivator to hemp-based CBD trial.
In fact, nothing aside from free product trials is more convincing than a health care practitioners’ guidance: 50% of hemp-CBD interested adults said this would motivate them to try a hemp-CBD product, versus 16% for a family member’s recommendation, versus 17% for a friend’s recommendation, versus 15% having the product manufactured from a familiar brand.
And the demand is certainly there. In the coming years, hemp-CBD products positioned as substitutes for over-the-counter (OTC) solutions targeting arthritis, sleep and general pain will attract the largest percentage of non-CBD users.
Stay tuned for Part II of the U.S. Hemp-CBD and CPG Industries Forecast 2020, where Rich Maturo will detail five more areas of change in the hemp-CBD marketplace in the coming year.
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