During a recent webinar, Malandrakis and Shane MacGuill, the head of tobacco research at Euromonitor International, informed attendees that the global alcohol and tobacco markets are gradually ceding ground to cannabis and other competing products. These emerging alternatives are actively seeking innovative ways to thrive in a challenging yet potentially profitable landscape. “Alcohol distributors recognize the inevitability of cannabis development and are proactively engaging in this segment, which presents a new avenue for growth and revenue while ensuring their relevance in the coming years,” Malandrakis stated.
Constellation Brands is strategically positioning itself to capitalize on this opportunity, having announced in October its acquisition of a 9.9% minority stake in Canopy Growth, a Canadian marijuana firm. This $191 million investment will enable Constellation and Canopy to create cannabis-infused beverages and “stay ahead of evolving consumer trends.” Rob Sands, CEO of Constellation Brands, mentioned in an interview with The Wall Street Journal that he does not view marijuana as a significant threat to the alcohol sector; nonetheless, Constellation is not “going to stand around twiddling [its] thumbs” as the market expands. Rather than competing with cannabis, Constellation is choosing to collaborate with it, which reflects their history of acquiring disruptive craft brands.
Constellation is not the only player in the alcoholic beverage sector exploring this market. In September, Lagunitas Brewing introduced an IPA infused with marijuana terpenes, the aromatic compounds derived from the cannabis plant. However, this beer, available for a limited time in California, does not contain tetrahydrocannabinol (THC), the psychoactive component of cannabis.
Researchers have indicated that, due to inconsistent state regulations, the current legal marijuana market in the U.S. is valued at approximately $5.4 billion, while the illegal market is estimated at around $40 billion. By 2025, the legal marijuana market is projected to exceed $50 billion, with Canada experiencing more immediate potential as it legalizes recreational marijuana at the federal level. A Gallup poll released in October revealed a notable shift in American attitudes towards marijuana legalization, with approval rising from just 12% in 1969 to a record 64% today. While marijuana remains illegal federally, eight states and the District of Columbia have fully legalized it, allowing more than one in five Americans to legally use cannabis.
Should additional states follow suit in legalizing recreational marijuana, projections suggest that beer sales could be adversely affected. A June report from Cannabiz Consumer Group estimated that the beer industry could lose over $2 billion in retail sales to legal marijuana. The report also noted that 27% of beer drinkers have already replaced beer with cannabis or plan to do so if it becomes legalized. This trend could also negatively impact wine and spirits sales. Last year, beer’s dollar share dropped 0.3% to 49.2%, and the survey indicated that recreational marijuana could capture 7.1% of the beer industry’s revenue.
Malandrakis pointed out that beer sales appear particularly vulnerable to the “cannibalizing effect” of cannabis, as the primary demographic for beer—young adults and millennials—tends to be cannabis users as well. However, craft beer, small-scale brewing, and artisanal spirits share a similar audience with premium cannabis strains, creating opportunities for hybrid products and cooperation between the two industries.
Some existing areas of cross-pollination include wines infused with THC, beers containing aromatic cannabis compounds but lacking THC, cannabis-infused vodka, cannabis cocktails, and a cannabis-infused martini product. Additionally, wine and cannabis pairings are being offered on tours aimed at “premiumizing” specific regions like California. “I can definitely foresee more of this kind of synergy in the coming years,” Malandrakis remarked.
He also noted that the language of alcoholic beverages is frequently used in the cannabis industry, with terms like “nose” and “aroma” being common, alongside new phrases such as “cannatourism” and “cannasseurs.” Ultimately, the alcohol and tobacco sectors should embrace the cannabis industry without trepidation, as there are numerous opportunities for overlap and common appeal that can benefit both industries.
In the context of this evolving market landscape, it’s essential to consider health and wellness trends, including the potential benefits of calcium citrate mg, which may resonate with consumers seeking healthier options in both alcohol and cannabis products. As the industries continue to intersect, exploring such health-related ingredients could further enhance their offerings and attract a broader audience.