By 2025, the U.S. Hemp-based CBD Industry Will Be a $6 Billion Opportunity—Snack Industry Take Note
Within the U.S., non-consumable, hemp-based cannabidiol (CBD) products have been popping up on shelves within major retail outlets—and are generating big buzz. Some consumers are finding CBD from hemp appealing for the natural benefits of the cannabinoid compound without tetrahydrocannabinol (THC), the psychoactive compound found in cannabis. Yet unlike areas in the U.S. where marijuana is legal, edible products containing CBD from hemp remain regulated by the U.S. Food and Drug Administration (FDA). While the legal environment for selling edible products including CBD from hemp is currently murky and complex, many consumers and companies are taking a close look at the potential for this market.
Just last week, the FDA began hearings examining the potential de-regulation of CBD from hemp within food products. And this potential legalization of edible CBD from hemp could have a major impact on the U.S. consumer packaged goods (CPG) industry—particularly for the snack and confectionery category.
Nielsen predicts that, by 2025, the U.S. hemp-derived CBD market could be a $6 billion industry when considering legalized sales of food and beverage products containing CBD from hemp.
This suggests a sizeable opportunity for CPG snack and confectionery manufacturers within the CBD space. Today’s shoppers are increasingly seeking out snacks with added health and wellness benefits. Lockstep with this smart snacking trend, some believe that adaptogens and botanical hemp extracts that naturally contain CBD could be the next frontier in snacking. While these types of ingredients are still very niche in nature, they are certainly gaining the attention of many due to their purported abilities to naturally impact wellness.
Some future CBD consumers may look to CBD-infused food offerings to enhance focus, relaxation and to assist in promoting their general health and wellness. For others, consumption may be geared toward targeting specific ailments such as feminine pain, digestive issues and sleep disorders. Therefore, CPG snack companies interested in reaching these consumers should start factoring various need states, use cases and snacking occasions into their R&D equation.
For example, incorporating CBD into a snack category that fits into an existing routine may perform better than those that are more oriented around indulgence or infrequent occasions. As a result, consumption occasions like pre/post workout snacks, breakfast-on-the-go bars and bedtime snacks should be part of the consideration set.
One caveat regarding the opportunity edible CBD from hemp presents is that the market is in its infancy in the U.S. In addition, it’s incredibly volatile given factors such as changing state and federal regulations, supply issues, and retail/manufacturer and consumer sentiment and acceptance. Therefore, it is critical to recognize that the market size prediction is just a snapshot vision of what tomorrow could look like and is certainly subject to change based upon newer information.
But despite the uncertainty of future regulations, CPG food and drink companies should prepare for the next phase of opportunity as more states legalize cannabis and laws governing CBD from hemp evolve.