CBD products have exploded in popularity in recent years, and new brands seem to be entering the market every week. As a result, many businesses see this market as a huge opportunity. However, the oversaturation of CBD brands is making it more challenging for consumers to know what to buy and where to buy it.
The CBD Insider’s 2021 US CBD Consumer Report provides some data around the CBD industry and what consumers want from CBD brands that can help savvy businesses stand out in the marketplace
Based on the data from the study, the breakdown of why U.S. adults say they use CBD products is as follows:
- Relaxation/stress relief: 60.3%
- Relieve aches/discomfort: 53.6%
- Improve sleep quality: 47.6%
- Relieve muscle soreness/accelerate recovery: 43.8%
- Help falling asleep: 43.6%
- Improve mood: 41%
- Improve general health: 26.2%
- Improve focus/concentration: 21.8%
- Recreation: 17.1%
- Be more energized: 16.1%
- Skin care: 11.7%
- Gastrointestinal distress: 11.5%
- Pets: 5.9%
- A specific health condition or some other reason: 8.8%
As the data shows, a large percentage of U.S. adults use CBD products for some kind of pain relief as well as for its sleep and mental health benefits.
When you put these findings together with data in The CBD Insider’s report related to consumer preferences, it’s much easier to understand what consumers want from CBD brands based on the 4 Ps of marketing: product, price, place, and promotion. Let’s take a closer look at what CBD brands can learn from the data.
According to research, the type of CBD product most current users prefer is oil/drops/tinctures (21.8%) followed by gummies (19.6%). The full breakdown of the top 10 CBD product preferences follows:
- Oil/drops/tinctures: 21.8%
- Gummies: 19.6%
- Vape: 12.2%
- Edibles: 9.4%
- Muscle and joint topicals: 9.2%
- Flower (raw hemp): 7.2%
- Capsules/softgels: 5.5%
- Topical moisturizers (salves/lotions): 4.9%
- Drinks (water, sports drink, etc.): 3.8%
- Oral product (mouthwash, toothpaste): 1.9%
Other CBD product types were preferred by 1.5% or fewer survey respondents, including prepared food/drink at a café/restaurant (1.5%), pet food or treats (0.6%), transdermal patches (0.5%), bath products like scrubs and bath bombs (0.5%), pet oil or topicals (0.4%), sublingual strips (0.2%), suppositories (0.2%), and eye drops (0.1%).
When choosing products, the brand is often an important part of the purchase decision for consumers. This is where one of the biggest opportunities for CBD brands to seize market share can be found. No brand is truly dominant in the CBD market, and no brand is close to being a household name yet.
The Cannabis Insider’s survey respondents were asked which CBD brands they have heard of, and 50.7% of them said they did not recognize any of the 34 brands provided to them. Among those brands that respondents have heard of, none of them have significant name recognition. The brand that most people recognized was only identified by 13.8% of respondents, which means the brand leadership position is wide open!
Among CBD consumers, price ranks as the second most important purchasing factor (63.6%) behind ingredients (69.7%) while price per serving ranks fifth (52.3%). The full breakdown of CBD purchasing factors based on importance follows:
- Ingredients: 69.7%
- Total price: 63.6%
- CBD concentration: 62.6%
- Brand reputation: 52.0%
- Price per serving: 52.3%
- Expert recommendation: 51.5%
- Reviews: 48.7%
- Recommendation from friends and/or family: 31.8%
- Extraction method: 30.0%
- Where the hemp was grown: 25.1%
- Packaging: 16.4%
Consumers are clearly not just looking for a cheap product. In fact, 31.3% of survey respondents indicated they’ve increased their average monthly spending on CBD products in the past 12 months. Today, most CBD users spend between $51 and $75 per month on CBD products, and the median price that respondents said they’d be willing to pay for a monthly supply of CBD is $70.
The distribution and accessibility of CBD-infused products is changing rapidly and consumers of all ages are interested in buying CBD products from multiple online and offline locations.
Currently, respondents to The Cannabis Insider survey reported that they’re most likely to purchase CBD products from a cannabis dispensary (32.4%) followed by online directly from CBD brands (30.5%). However, they’re buying at a wider variety of places than ever before, including Amazon. The full breakdown is below:
- Cannabis dispensary: 32.4%
- Online directly from CBD brands: 30.5%
- Smoke shop: 27.3%
- Online retailers selling a variety of products: 19.1%
- Amazon: 17.2%
- Friends: 13.8%
- Brick and mortar health/supplement store: 12.2%
- Alternative healthcare provider (chiropractor, massage therapist, etc.): 9.9%
- Supermarket/grocery store: 9.5%
- Family members: 8.8%
- Gas station/corner market: 8.7%
- Gym/fitness center: 2.4%
- Somewhere else: 3%
Bottom-line, distribution and accessibility are changing quickly in the CBD market, and CBD brands that want to grow need to be where consumers are. In the near future, getting placement in grocery stores, pharmacies, natural food and health stores, and big box chains will be critical to growth in the future as will being available on Amazon and other popular retail websites.
How do consumers make CBD product purchase decisions today? The number one source of information is family and friends (34.4%) followed by social media (27.69%), CBD brands (24.5%), and CBD educational websites (21.4%). Only 14.5% of CBD consumers use information provided by retailers, while only 11% use information from physicians.
The good news is consumers do look to CBD brands for educational information. With that in mind, CBD brands that will win in the future are the ones that are publishing and sharing a lot of useful, reliable, and authoritative content that helps consumers.
The CBD Insider’s research also reported that CBD users find some types of promotions more compelling than others. Buy one, get one discounts rank number one (30.7%) followed by percentage discounts (27.7%), dollar discounts (23.4%), and product bundles (15.2%). CBD brand should plan their future promotions accordingly to get the best results. In other words, give the people what they want.
Next Steps for CBD Brands to Gain Market Share
The next step for CBD brands that want to gain market share is to give consumers what they want. This starts by understanding the marketplace today, changes that are likely coming in the future related to regulations and consumer perceptions, and developing agile strategies that can evolve with both the industry and the consumer population.
Originally published 9/17/19. Updated 7/30/31.