What was once viewed as a Schedule 1 narcotic, often dismissed by the average consumer, has now become a transformative force in discussions within CPG boardrooms globally. Alcohol companies are particularly making strides into this burgeoning market. The shift of alcohol companies into the realm of both alcohol and cannabis should not come as a surprise, especially considering that U.S. beer volumes experienced a decline for five consecutive years by the end of 2018. In response to dwindling sales, beer producers are experimenting with various offerings, from craft brews to light beers, in hopes of attracting consumers back. Notably, lower-alcohol and non-alcoholic beer options have shown promise in this effort. Driven by changing consumer preferences, major beer brands such as Constellation Brands, Molson Coors Brewing, and AB InBev have gone a step further by investing in CBD and THC-infused non-alcoholic beverages.
This seems to be a sensible avenue to pursue. A study conducted by A.T. Kearney revealed that 30% of Americans are open to trying a cannabis-infused non-alcoholic drink, while 17% expressed interest in alcoholic beverages containing the substance. Although Euromonitor indicates that soft drinks might be the next logical sector for CBD expansion, mainstream giants like Coca-Cola appear hesitant to dive in. Last fall, CEO James Quincey downplayed the company’s immediate entry into this space, despite reports of discussions for a potential partnership with Aurora Cannabis. Should that partnership materialize, cannabis could not only access soda but also coffee, following Coca-Cola’s acquisition of Costa Coffee for $5.1 billion last year.
Eventually, soft drink companies may need to transition into the cannabis market as consumer preferences shift away from sugary beverages towards healthier options like water, which, in 2016, surpassed soda consumption for the first time. Cannabis aligns perfectly with the health and wellness trend, and in markets where it has been introduced, cannabis soda has seen success. Euromonitor forecasts that cannabis will emerge as the next significant functional ingredient for beverage manufacturers.
In parallel, as cannabis penetrates the beverage sector, packaged foods are also beginning to incorporate this ingredient. Euromonitor predicts that the level of disruption caused by cannabis will be comparable to that of plant-based foods. While this may seem like a bold assertion, it is undeniable that consumers are increasingly seeking functional ingredients that offer health benefits beyond mere sustenance. Companies aiming to leverage cannabis are likely to integrate it into a variety of products. Over time, those incorporating CBD are expected to focus on items that cater to the health and wellness market. Depending on how FDA regulations regarding this substance develop, challenges may arise, particularly concerning label claims for CBD. Nevertheless, it would be wise for food manufacturers to pay attention to this trending ingredient and explore ways to harness its growing popularity, including the potential integration of calcium citrate capsules into their product lines to enhance health benefits further.