C-stores can benefit from CBD’s popularity by marketing a range of CBD options for customers looking to relax and de-stress.
As cannabidiol (CBD) moves the mainstream, convenience stores are in prime position to benefit from the product’s rapid growth.
U.S. sales of hemp-derived CBD products reached $4.2 billion in 2019, a 562% increase over 2018, according to Brightfield Group. While few consumers had heard of CBD prior to 2018, the signing of the Farm Bill in December 2018 — which removed hemp from the legal definition of marijuana and the Schedule 1 Controlled Substances list — helped usher in exponential growth through extensive media coverage, expanded product availability including in drug stores and pharmacies, and widespread word-of-mouth through social media. Sales of CBD products through convenience and gas stores grew by 2,276% in 2019 to reach $122 million.
CBD in the form of drinks, tinctures and topicals present growth opportunities in the c-store channel.
CBD drinks, valued at $52 million in c-store sales in 2019, are highly popular among new consumers and skew younger, with millennials as the largest consumer group. Demand for CBD-infused drinks remains high despite the Food and Drug Administration (FDA) stating that CBD cannot be sold as a dietary supplement or used as a food additive.
New innovations in CBD drinks ranging from sparkling waters to ready-to-drink (RTD) teas to sports drinks and sleep shots offer c-store shoppers a familiar way to try CBD.
Tinctures, also called CBD oil, via c-stores are worth $17 million and reach a broad consumer base as the most popular CBD format. By selling smaller-sized bottles of tinctures at under $30, c-stores can reach tincture users — 50% of whom use the format five or more times per week. Topicals, worth $15 million through c-stores, offers a way for c-store operators to sell CBD products without worrying about the FDA’s restrictions on the sale of ingestible CBD. Products such as CBD sticks and CBD lip balms provide a low-priced, easily trans- portable way to try CBD.
CBD products offer opportunities to reach busy shoppers who are looking to de-stress and relax. The top five medical conditions reported by c-store and gas station CBD consumers have anxious feelings (55% of respondents), despondency (40%), trouble getting a good night’s rest (29%) and discomfort (24%), according to Brightfield Group’s consumer insights. Two of the top desired product effects among c-store CBD users are relaxation (86% of respondents) and athletic (69%).
CBD drinks offer multiple positioning opportunities as they can address consumer desires for relaxation, sleep enhancement, athletic endurance and recovery, as well as an afternoon pick-me-up and as a substitute or supplement to alcoholic beverages. Tinctures can be marketed to consumers looking for daily relief of anxious feelings, while topicals like CBD balms and roll-ons can be targeted toward individuals seeking to relieve everyday or post-workout discomfort.
Among CBD product types, c-store CBD consumers are very open to edibles. Some 69% of c-store CBD buyers use edibles such as drinks and gummies. Young men comprise the majority of c-store CBD consumers, with 57% of c-store and gas station CBD buyers being male, and 42% between the ages of 26-35. Among c-store CBD consumers, 40% are single, and 40% are heavy users (who use CBD five or more days per week).
While the COVID-19 pandemic has led to economic pressures for consumers and less foot traffic for retailers, CBD consumption habits have stayed strong. A March 2020 Brightfield Group survey of 2,638 CBD consumers found that 37% of CBD consumers planned to use CBD more frequently, with 47% of Gen Z and millennials saying that they plan to use it more frequently.
As the U.S. economy begins to reopen, c-stores can market small grab-and-go CBD products such as drinks, trial-size packs of gummies and tinctures as affordable luxuries for consumers looking to de-stress and relax.
Original article by CStore Decisions