Marketing Insights for the CBD Industry
Looking for insights into the CBD industry? Overwhelmed by the constantly changing perceptions and regulations? Read our comprehensive report on the changing face of CBD and what you as a marketer need to do to prepare. We surveyed over 1,000 consumers and professionals in order to uncover key trends, motivations, and barriers critical to those looking to make a mark in the CBD industry.
Tackling Myths and Misconceptions
We see the endless possibilities of the CBD industry. Our decades of experience in the pharmaceutical, medical device and wellness industries have given us unique insight into the health and wellness market and the changes made by the introduction of CBD. Our ability to navigate the FDA and communicate science in real language makes us a natural choice to help CBD industry leaders overcome the challenging marketing barriers they currently face. We believe that this is a critical time in this new category’s evolution. Science and industry are only just beginning to understand the limitless applications, while consumers are struggling to tell fact from fiction. As regulation increases and access issues decrease, the stage will be set for key brands to secure their place in history.
The Time for Change
Every so often there is a paradigm shift. People begin to re-evaluate preconceived notions of wellness and naturally occurring alternatives. With an endless wave of CBD-based products hitting the market, it is clear that the view of hemp and its many CBD derivatives has changed. What was once considered “experimental” is now an FDA-approved treatment for severe forms of epilepsy in patients two years of age and older.1 It is quite common to use CBD to treat inflammation, anxiety and seizures and for pain management, among countless other ailments. Given the fact that an untold number of new brands are being introduced to the market each day, it is important to understand the motivations and challenges currently shaping this industry.
So we surveyed a cross-section of consumers and professionals from across the United States to get a fresh perspective. We started with a clean slate, throwing away our own misconceptions and biases about CBD. Our goal was simple: gain insight into the current perceptions and usage trends around CBD in order to create a targeted action plan for CBD marketers and other industry professionals. We wanted to survey a broad range of individuals nationwide to really understand the dynamics facing this industry. Our total sample size (n=1,307) consisted of a mix of consumers (n=273) and marketing professionals (n=1,034) with varying levels of experience with CBD. The average consumer surveyed was female, between the ages of 25 and 34, and had used CBD at least once in the last month (n=59). Our target professionals (n=73) had a wide range of experiences and insights to share from years in CBD marketing, production, operations and/or product design.
CBD Consumer Archetypes
Despite the fact that it might feel as if CBD is ubiquitous, the average consumer still has a great deal of confusion and concern. Even with the release of the 2018 Farm Bill, the CBD-naive consumers surveyed still think CBD is illegal (15%), is basically modern-day snake oil (19.5%) or will result in unforeseen complications or side effects due to purity issues (23.9%). This level of skepticism is common among CBD users who are not necessarily educated on the ins and outs of the products they are using or consuming. They often see CBD use as a sign of physical or moral weakness.
The educated CBD user, however, understands that the science is evolving. They can see the limitless possibilities as new cannabinoids such as cannabinol (CBN), cannabigerol (CBG) and cannabichromene (CBC) are being tested for their therapeutic effectiveness. They embrace the prospect of experimenting with new brands and different types of applications and/or product combinations. They don’t need to wait for clinical studies to tell them what they already know—CBD works!
Trust Is Everything
The tsunami of information around CBD makes it imperative that you combat the fear, ignorance and stigma with education and transparency. Relationship building takes time, but it starts with clear communication and purpose. Understanding your customer targets and their knowledge gaps will help you create a brand your customers can trust. The more educated CBD consumers you create, the more potential growth for your business.
It is also important to consider the methods through which you educate your target customers. Our survey suggests that CBD education and sales are happening in more traditional ways than one might expect. Consumers are being introduced to new CBD brands all day long, when they go to the supermarket or pharmacy or even as they grab a cup of joe at their local coffee shop. There is a clear opportunity to make the most of this in-store experience, as the average customer is relatively uneducated about CBD and has no specific brand loyalty. Large investments in social media may help with awareness for brands that can afford it, but a traditional point-of-purchase campaign may be more effective in the long run to drive awareness and ultimately sales.
The Green Triangle
Whether your customers’ concerns are real or imagined, understanding them is critical to the success of any brand, in any industry. With the exception of life-saving treatments, such as Epidiolex,1 there is just too much “white noise”; consumers are struggling to create a real bond with any one brand. The challenge for the marketing professional is to replace the noise with fact, not science fiction.
When we asked those individuals who had little to no experience with CBD about their reservations around using CBD, the responses were consistent. Almost all respondents stated that concerns about quality, effectiveness and high cost were the biggest roadblocks to joining the CBD community. The brands that survive the storm will be those that can “provide proof” that they can deliver quality products that work, for a reasonable price.
Quality is not just an idea; it is a mission. It should be a part of every customer experience you create. From environmentally friendly production processes to chemical-free growing practices, elevating industry standards and producing verifiable outcomes today will be the foundation for your brand story for years to come. Providing a Certificate of Analysis (COA) and utilizing third-party testing facilities are just two of the ways you can ensure purity and begin a foundation of trust with your customers.
Although the science around the proposed mechanism of action (MOA) for CBD and other cannabinoids is still evolving, it is still incumbent upon every brand in the CBD industry to be able to quantify their effectiveness. All cannabinoids, including CBD, produce different reactions in the body, but how do they work? At one time, researchers thought that CBD actually bonded to the CB1 and CB2 receptors in the body to directly impact coordination, pain, mood, thinking, appetite, memory and other functions. In recent years, we have learned that this is not the case, but the research is ongoing. In fact, the FDA is currently working on clearing up some of the confusion by facilitating several public hearings and ongoing clinical studies that are focusing on many of our respondents’ top concerns. In late November 2019, the FDA released a public update regarding their growing concerns with the use and sale of cannabis and other cannabis-derived compounds, such as CBD. Based on many factors including side-effects identified during the Epidiolex clinical trails, the FDA is actively working to learn more about:
The effects of long-term CBD use on the body, specifically potential toxicity to the liver2
The cumulative exposure to CBD across a broad range of consumer products2
The effects of CBD while taking other medications2
The effects of CBD on male reproductivity (e.g., decreased testicular size, sperm count, testosterone)2
The effects of CBD on special populations (e.g., the elderly, children, adolescents, pregnant and lactating women) or types of animals (e.g., species, breed or class)2
Until science has caught up, it is imperative that marketers use different approaches to quantify their product effectiveness. If facilitating your own small clinical study is beyond your reach (and budget), explore other ways to generate verifiable customer data such as customer satisfaction surveys or focus groups, or try a little empirical research.
“Why are CBD products so expensive? Is it worth the extra money when I am not even sure it is working?”
Sound familiar? That is a common consumer objection to the seemingly astronomical prices of some CBD products. But if you want to provide your customers with a quality product in a developing market, there will always be a cost impact. However, if you have successfully laid the groundwork to establish the quality and effectiveness of your brand, higher cost will no longer be an issue. Educated consumers understand that “you get what you pay for.”
Even though it seems as if CBD is everywhere, the industry is still in its infancy. As the market continues to grow, regulations are established and standards are adopted, the CBD industry will continue to evolve. Only time (and data) will tell how integrated CBD will become in all aspects of our society.
At BMKD, we take our work seriously, and we know that when inspiration strikes, you’d better be ready. Our mission is your brand, at every stage of its life cycle. We go beyond the surface to uncover hidden insights that lead to meaningful experiences and lasting customer relationships. We don’t create tactics—we build ecosystems that help your brand grow.
Do you want to learn more about our brand strategies for the CBD industry? Want to see how our science-based insights will grow your brand? For more information about BMKD and how we can help you deliver high-value wellness solutions, contact us right now! You can't afford to wait!
Looking for more? Check out our CEO, Bill Kay, as he shares his views on CBD, marketing and much more on the "Thinking Outside the Bud" podcast.
References:
3 Data on file. BMKD CBD Survey, published October 2019.