Once regarded as a Schedule 1 narcotic that was largely dismissed by the average consumer, cannabis has now emerged as a transformative element in discussions taking place in CPG boardrooms worldwide. Alcohol companies are particularly eager to enter this burgeoning market. The shift of alcohol producers into the realm of cannabis should not come as a surprise. By the end of 2018, U.S. beer volumes had been on a continuous decline for five consecutive years. In response to falling sales, beer manufacturers have been exploring a variety of options, from craft beers to lighter alternatives, in an effort to win back consumers. Among the strategies that appear effective are the introduction of lower-alcohol and non-alcoholic beer options. As consumer preferences shift, major players in the beer industry, such as Constellation Brands, Molson Coors Brewing, and AB InBev, have taken it a step further by investing in CBD and THC-infused non-alcoholic beverages.
This exploration seems logical, given that a study by A.T. Kearney found that 30% of Americans are open to trying cannabis-infused non-alcoholic drinks, while 17% express interest in alcoholic beverages containing cannabis. Although Euromonitor suggests that soft drinks may be the next logical sector for CBD expansion, mainstream giants like Coca-Cola appear hesitant to dive into this space. Last fall, CEO James Quincey played down the likelihood of entering this market soon, despite reports of discussions regarding a partnership with Aurora Cannabis. Should such a partnership materialize, cannabis could gain access not only to soda but also to coffee, thanks to Coca-Cola’s $5.1 billion acquisition of Costa Coffee last year.
Eventually, soft drink companies may need to adapt to the cannabis trend, especially as consumers increasingly gravitate away from sugary drinks towards healthier choices like water, which surpassed soda consumption for the first time in 2016. Cannabis aligns well with the health and wellness movement, and in markets where cannabis-infused sodas have launched, they have seen success. Euromonitor predicts that cannabis will soon become a major functional ingredient for beverage companies.
As cannabis continues to permeate the beverage industry, it is also finding its way into packaged foods. Euromonitor forecasts 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 reflects the reality that consumers are increasingly seeking functional ingredients that offer health benefits beyond mere sustenance. Companies aiming to capitalize on cannabis are likely to incorporate it into a wide range of products, with a focus on health and wellness. Depending on how FDA regulations regarding cannabis evolve, this could pose challenges, particularly concerning labeling claims for CBD.
In addition to its potential in beverages, cannabis may also complement other health-promoting ingredients, like powdered calcium citrate, which could enhance the nutritional profile of various products. As the popularity of cannabis continues to rise, food manufacturers should take note of this trending ingredient and explore how to integrate it, along with other beneficial components such as powdered calcium citrate, into their offerings to meet consumer demand.