The emergence of CBD

Breaking down the growth and integration of the disruptive new product category
Peter Johnston
NRF Contributor

Sunday afternoon at NRF 2020 Vision: Retail’s Big Show, Stephanie Wissink, managing director of consumer research for the Jefferies Financial Group, moderated a panel discussion of the emergence of cannabidiol, popularly known as CBD, as an ingredient in a wide variety of (usually) health-related consumer products. Joining her were Jann Parish, chief marketing officer of Green Growth Brands; Rachel Bonsignore, senior consultant at GfK Consumer Life; and Sharon Leite, CEO of The Vitamin Shoppe.

Wissink began by acknowledging a still fairly widespread confusion as to what exactly CBD is, and how it varies from its cousin tetrahydrocannabinol, better known as THC. Her request for a show of hands revealed that many of her audience shared that confusion, so the session began with a quick overview of the two substances. Both are extracted from plants in the hemp family. Both are considered helpful for a variety of conditions. The primary difference is that THC is the active ingredient in cannabis; it’s what makes people high. CBD is relaxing and soothing, but it is not psychoactive and does not make people high.

GfK attributes some of the growth in interest in CBD and its soothing properties to social and cultural phenomena, among them an aging population and increasingly costly healthcare.

Wissink said another important distinction is that THC is illegal in most of the United States, and CBD is not; its cultivation and sale was legalized by the 2018 Farm Bill. It has been the subject of over 250 clinical trials, and last year saw a 700 percent increase in demand for CBD-based products.

Bonsignore said GfK attributes some of the growth in interest in CBD and its soothing properties to social and cultural phenomena, among them an aging population and increasingly costly healthcare. These contribute to a desire for protection from worry, a sense of control (“I need more space”) and heightened interest in the prevention of illness. “In our research among Americans over the last 10 years, we see more anxieties rising than falling,” she said. “The cost of healthcare is now the number two concern in the United States.”

Asked what gives her company confidence that the public is now ready for CBD-based products, Jann Parish of Green Growth Brands said, “When I started with the company in 2018, I heard repeatedly from the field sales force that customers were asking about CBD.” Based on these conversations, and on the new legislation legalizing CBD, Green Growth extended its efforts to position itself as the experts. “We focused on education about the products, and, most importantly, the solutions those products can provide. We are very bullish on it, but wanting to make sure we do it right.”

Meanwhile, there continues to be a complex system of state (and sometimes county and even municipal) regulations governing the sale and use of CBD. Given this, Sharon Leite of The Vitamin Shoppe was asked how she approaches going to market with these products. “We go through a pretty complex process with the category,” she said. “There are things that you can say and things that you can’t say. Our distributors have really been very helpful. You can spoon-feed them as much as you want, but their willingness and their ability to learn on their own has been a real asset.”

Turning back to the subject of fear and anxiety in the wider culture and how the public might now see CBD as a solution to, or at least treatment for, some of those conditions, Bonsignore said, “People want community. They want brands to talk to them, and these brands do feel a little more personal, a little more interactive. It just feels like the right thing.”

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