Today, cannabis markets are surging in popularity at a time when mental and physical wellness is top of mind for consumers. We're already seeing the shifting vices; folks are straying from liquor to opt for cannabis and, in countries that have legalized medicinal cannabis, alcohol sales have dropped more than 12 percent.
In an effort to adapt, alcohol brands of all sizes are tapping into this burgeoning industry. Some are investing in non-alcoholic and low-ABV products; others are creating sometimes questionable ways to imbibe cannabis; and still others, like Constellation Brands, are diving into uncharted waters with major cannabis investments, in order to overcome loss of alcohol sales with an expanded portfolio.
For major beer, wine and spirits brands looking to take the plunge, there are a few key consumer insights drawn from cannabis industry research that can help in building targeted products and guiding promising investments:
Inform the first-time cannabis consumer.
According to Eaze's annual State of Cannabis report, first-time cannabis consumers grew by 140 percent in 2018, with baby boomers being one of the fastest-growing segments—increasing by 25 percent over the year. As with any new consumer base in any industry, welcoming new buyers with information and education goes along way in supporting their foray into a completely new territory, instilling trust in the product, and guiding them to make the right purchase decisions for their individual needs.
As alcohol companies move into expanding and diversifying their product offerings to include cannabis-infused drinks and other products, they should be prepared to combine their marketing with education in tactful ways. Given that the history of the cannabis industry is one that has typically belonged to the anti-establishment, these beverage companies have an opportunity to join in with other cannabis brands to help rebrand cannabis in a positive and informative light. Marketing should leverage educational content that informs this new consumer base of the beneficial and medicinal benefits of cannabis and related products. The more people experience a new product offering along with content that is educational and enlightening, the more likely they are not just to trust your product, but to share it with others.
Two words: millennial and social.
The average age of the cannabis user today is around 31, so while the market is diversifying, the core consumer base is still largely composed of millennials. According to a 2017 report by Yahoo titled Weed & the American Family, the majority of the 55 million cannabis users in the U.S. are millennials, and most of these millennials use marijuana socially. The social aspect of this product is a major point of leverage for alcohol brands looking to move into the space.
According to a report by CBE, the No. 1 reason for using cannabis, as reported by users, is for recreational and social reasons. In fact, only 25 percent of users report using cannabis alone. For beverage brands looking to launch new products, whether it's cannabis-infused beer or CBD-infused beverages, highlighting the social elements of their new products will be key. For many alcohol and beverage companies, this move can even feel like a natural addition to what is already an adult universe of recreational products that center around social life.
With cannabis adopters growing, there will also be a segment of cannabis and alcohol dualists who continue to partake in both. For this segment, brands and marketers can leverage the social nature of both alcohol and cannabis as offerings that foster enjoyment and relaxation, combining the offerings for a cohesive theme across the board.
Become a lifestyle brand.
Amid the burgeoning wellness boom, research shows millennials and Gen Zers are also drinking less than older generations. A report from Berenberg Research revealed that teenagers and those in their early 20s are drinking over 20 percent less than millenials, and that millennials are drinking significantly less than baby boomers. With health and wellness top of mind for these younger generations, beverage brands can benefit by adopting some of the more medicinal and therapeutic products that the world of cannabis offers.
As an example, Cannabidiol (CBD), which unlike THC won't make you high, is just one cannabis-derived product that has been linked to a wide range of health benefits, from treating chronic pain and anxiety to helping with insomnia. The shift away from mass-market alcohol and toward craft beer and cocktails is already happening, and by adopting CBD-infused drinks and related products, alcohol brands can leverage the many health benefits of this ingredient to appeal to a new audience of wellness enthusiasts.
Moving forward, the cannabis boom should serve as a friend, rather than a foe, for beer, wine and spirits brands that are looking to engage with the next generation and increase their relevance among a highly wellness-oriented consumer base. As medical and recreational cannabis continues to grow, and as legislation efforts continue to expand throughout the world, there are bound to be ample opportunities to enter the market creatively and strategically.