No doubt about it — CBD is here to stay and the CBD industry is forecasted to maintain its upward trajectory in the years to come. Advancements in both CBD products manufacture and CBD research will only continue to propel each other towards beneficial and dynamic growth as CBD gains greater relevance in the health sector.
Constant Growth for CBD
CBD’s celebrity status is quickly outshining that of THC, and deservedly so. The 2018 Farm Bill which legalized hemp allowed for expansive hemp cultivation not only for agricultural hemp-derived products, but also for CBD products. This also gave scientists greater latitude in furthering preliminary studies on hemp and starting more comprehensive research to better understand the pharmaceutical potential of this cannabis compound.
Available scientific evidence, although still limited, has already provided an effective endorsement for the wide-ranging potential benefits of CBD. Mountains of anecdotal evidence has driven consumer demand for CBD products to immense heights, and the CBD market has been doing a good job keeping up.
As demands are forecasted to maintain its accelerated course, the outlook for market trends are leaning towards greater diversification and more focus on better established CBD benefits, such as for anxiety and stress.
Let’s take a look at CBD market trends for 2021.
Greater CBD Products Diversity
A bigger market means tougher competition; but it also means more opportunities for niche markets to get a more stable foothold in the industry.
Niche markets will take a bigger slice of the pie even as they take over consumer segments that are less crowded. These more specialized brands can gain greater relevance and exposure as they also attract consumers with more specialized needs, thereby making it possible for them to achieve higher ROIs.
A good example is the CBD beverage market, which has already attracted more than 60% of CBD newbies. This may indicate that CBD-infused beverages, which are a relatively new segment, offer a convenient and appealing gateway for those who are only beginning to explore the world of CBD products.
Targeted Product Innovation and Marketing
Alongside the forecasted trend of greater product diversity and specialized niches are more targeted innovations in product development and more diversified marketing strategies.
Greater Consumer Preference for Consumer Packaged Goods
Consumer packaged goods (CPG), such as CBD gummies, have proven to be a popular product for CBD first-timers, with six in 10 newbies choosing gummies over other CBD products.
As the CBD industry is still relatively new, there is still a high influx of new customers, and the market will see more brands — both old and new — expanding their product lines to include CBD consumer packaged goods, especially given that CPG are also considered fast-moving products. Although CPG have a relatively lower profit margin, the faster rate of sale and greater sale quantities make up for it.
Tapping Into African-American and Hispanic Markets
These two cultural market segments have remained relatively untapped, but recent ad campaigns designed specifically for African-American and Hispanic consumers indicate that there will be a greater shift in marketing focus by many CBD brands.
There are still a lot of growth opportunities within these two markets, which more perceptive brands can dominate not only by capturing a bigger share of this cultural segment by being among the first to tap into it, but also by appealing to other consumer segments that value cultural inclusivity.
A Spotlight on Need-State Markets
The still ongoing pandemic, which has led to an increase in individuals experiencing chronic stress and anxiety, has opened up an opportunity for CBD companies to tap into this need-state market by promoting CBD’s potential ability to provide relief from these two conditions.
Navigating the advertising restrictions can be tricky, but brands have found a way to work around these restrictions by taking advantage of targeted keyword searches and relevant content creation.
According to one survey, 66% of US employers identified mental health as a top clinical priority for this year. Another research found that 92% of employees have reported some level of anxiety since the pandemic started, with 55% indicating that they have experienced a moderate or high degree of anxiety. Seven in 10 workers have reported reduced productivity due to COVID-19 concerns.
As the end of the pandemic is still nowhere insight, anxiety and stress will continue to be a serious problem not only for workers, but for nearly everybody, and CBD companies will have a heightened focus on creating and promoting products that specifically address these conditions.
The explosive growth of the CBD industry has not yet reached its climax, and there remain numerous avenues for brand growth — both vertically and horizontally.
This year presents opportunities for niche markets to become more relevant through product diversity and specialization, combined with targeted product innovations and marketing strategies. Tapping into cultural markets that have yet to jump on the CBD bandwagon is another opportunity that many established brands will be accomplishing within the next few months.
With the ever-growing popularity of CBD not losing its momentum any time soon, the influx of new customers will also mean greater focus on appealing gateway products. And as pandemic-related stress and anxiety will continue to affect more and more people, the potential benefit of CBD as a remedy for these mental health problems will see many companies zooming in on this potential to promote their products.
Despite the legal status of hemp-derived CBD, there are still many restrictions that present tricky obstacles to CBD companies. But current market trends show that great consumer interest in CBD products will continue to propel the CBD industry forward.