A newsletter on upcoming food and beverage trends that offers a curation of brands and aesthetics written by Andrea Hernández.
🔮 Peek into the future:
Rise of CBD in CPG
Snaxshot of market + who’s making moves.
Favorite brands in the space.
Market challenges + opportunities.
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Breaking the Grass Ceiling 🌿
Leave it to the burnout generation to popularize SaaS or self-care as a service that in turn has driven the growing interest in CBD. The passage of the U.S. Farm Bill in late 2018 legalized the commercialization of hemp-derived products and contributed to the acceleration of the CBD market. From capsules, to drink mixes, condiments, candy, tinctures, to things like CBD wine, there’s a full spectrum of products available for those of us looking for calmer times.
TL: DR — When it comes to CPG companies, the future looks dope.
SnaxShot 📸
CBD market estimated to reach $20 billion by 2024.
THC + CBD will create a total market of $45 billion for cannabinoids by 2024.
Growing CBD revenue in US to go from about $620 million in 2018 to $23.7 billion by 2023, a compound annual growth rate (CAGR) of around 107%.
Share of cannabidiol (CBD) products across FMCG segments in the United States in 2019, by format.
Joint Ventures 🚬
Companies engaging in mergers and acquisitions/raising $$ to strengthen their hold on industry:
Constellation Brands increases ownership of cannabis company Growth Corp to 38.6%.
Unilever brands offering hemp and CBD line extensions:
Former Coty Inc. CEO, Camillo Pane’s new venture, Present Life raises $20 million Series A investment.
Mile High Labs, a leading processor of hemp-derived cannabinoids, announced the close of a Series B equity in preparation for global cpg partnerships backed by John Paul DeJoria, they’ve raised a total of $100 million.
Aurora Cannabis Inc. —Canadian company defining the future of cannabinoids worldwide, recently announced it has completed the previously announced acquisition of Reliva, LLC ("Reliva") a leader in the sale of hemp-derived CBD products in the US.
Molson Coors x The Hydropothecary —formed a joint venture to pursue opportunities to develop non-alcoholic, cannabis-infused beverages.
In Europe, CBD startups saw a record level of investment—34 companies receiving a total of $128.5 million.
Blazing Stocks 📈
Full Spectrum of Products 🌈
Beverages:
WÜNDER is a California-based, offers a range of cannabis-infused, all-natural, canned beverages with flavors like Lemon Ginger Lift, Blood Orange Bliss, and Watermelon Wave.
CANN has sold 150,000 cans of its THC and CBD-infused, alcohol-free drinks since its launch in May of last year, they recently raised $5 million led by Imaginary, an early-stage investment firm launched by the founder of the Net-a-Porter group, and JM10, a leading cannabis company.
AURORA ELIXIR produces aromatic, carbonated elixirs with full spectrum hemp extract with 15mg of CBD in each bottle. CEO, Victoria Pustynsky, brings nearly fifteen years of luxury beverage expertise holding leadership positions at both LVMH Moët Hennessy Louis Vuitton and at Suntory Spirits.
DRAM —"adaptogenic" sparkling water that contains 25 mg of CBD from husband/wife team Brady Becker and Shae, they’ve recently announced the company’s distribution partnership with Coors Distributing Co.
RECESS is a sparkling water infused with CBD that markets itself as “canned feelings” founded and owned by Benjamin Witte, who previously worked in tech marketing in San Francisco, the company has raised around $6 million.
VYBES —Functional beverages with 25 mg of hemp CBD.
Food:
POTLI — calls itself the premium purveyor for the modern, cannabinoid-enhanced kitchen pantry. Their products range from honey, CBD sriracha to olive oil and ACV.
ROSE LA —premium edibles brand combining creative culture, sustainable agriculture and award-winning chefs. Infused with single-strain flower rosin, meticulously pressed in-house. They claim edibles are not only non-carcinogenic, but are also much less wasteful, and much more economical than smokables.
1906 NEW HIGHS —Named for the year the Wiley Act (also known as the Pure Food and Drug Act) was voted in, effectively starting the era of cannabis prohibition. 1906 is a brand of edibles with “delicious fast-acting experiences” and flavors that combine cannabis with plant medicines.
KEFLA —From CBD Dark Chocolate products to a Golden Turmeric bar, their products offer third party certification such as USDA Organic, Fair Trade USA, and Earth Kosher. They also include a QR Code on each product linking to their lab results database including third party potency test results.
TEMPO —They are low dose, THC crackers are like a more adult-ish Ritz and an incredible way to upgrade your charcuterie boards in typical millennial fashion. Very into them being a savory edible as opposed to the usual confectionery ones.
Added Strain 🤬
The challenge lies within this market through stringent regulation and length approval processes for CBD products —it may be that by the time companies can properly market themselves the term CBD is seem as more of a marketing ploy and soon become devoid of meaning like the term “organic” when it comes to food and beverage products.
Puff Piece 💨
As the CBD market matures, the opportunities lie in:
INGESTIBLES 💊
Capsules, gummies and beverages will significantly grow their user bases, pending the FDA’s permission for manufacturers to legally infuse hemp-CBD extracts into ingestible products —projections show that with FDA approval, ingestible formats could grow their existing user base as much as 250%-375%.
PET PRODUCTS 🐾
Now make up over $9.4 million in sales at regulated adult-use cannabis retailers in California, Colorado, Nevada and Washington combined as of last year.
OMNI CHANNEL DISTRIBUTION 🚚
Compared with current hemp-CBD users, data shows that new CBD consumers who say they’re likely to consume CBD products in the next 12 months but have yet to consume are more than twice as likely to state that they’ll shop for CBD products at a grocery chain or mass merchandiser.
See you again next week, different future, same place.
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Chock full of info. Well done!