THE CBD industry is changing and developing into niche sectors as it gains a better understanding of its customers’ needs.
Edibles look set to replace oils as the predominant delivery method with the UK set to become the European powerhouse in the months and years to come.
And, with over 5,000 brands the market is close to saturation point – so expect to see a major shake-up in 2021.
‘Is It Saturated, Yet?’
Speaking at the Global Cannabis Intelligence (GCI) Virtual Summit yesterday Mr Phillips showed some CBD-Intel research which highlighted how there are at least 5,000 active brands in the USA and Europe.
He said: “One of the main attributes of the CBD market has been the number of brands there are, in the market.
“That dynamic is continuing, and creating a really-fragmented market. We are still seeing a lot of brands enter the market. Which does beg the question ‘is it saturated yet?’ While it may not be, just yet, I suspect it’s about to be.
“With the regulatory changes coming up we are going to see a big decline in the number of brands.”
He continued: “We are going to see a lot of filtering out, particularly from those who do not want to go through the regulatory process, and are, frankly, not making the profits they thought they would be.
“I think we are going to see some major declines from next year – and it will happen quickly.
“The margins on CBD product have been high for time time. This is what happens in fast-growth markets, but, eventually the market slows and that is what is happening, now.”
Edibles And Isolates
This has led to a fall in wholesale prices in Europe and the US and this is reflected in lower prices for consumers, too.
He went on to say that the 10ml CBD sublingual oil is becoming the pre-eminent product and we will see more diversification with edibles becoming the most popular over the next few years
The Novel Food rules are likely to lead to the dominance of CBD isolate, replacing full spectrum.
And, with the UK now leading the way on the route to compliance he sees this market rising by one-quarter to to £500m, annually, over the next few years.
One of the major trends is the development of niche products and the CBD sector is meeting this challenge by better understanding the needs of its consumers, or, groups of consumers.
A Focus On Customers Needs
“Those using topicals for sports injuries are a very different consumer to someone using it for sleep, and the sector is getting better at understanding this.”
In a separate discussion entitled ‘Building Relationships with Retailers & Cultivating Your Brand’s USP’ GCI Managing Director Jonathan Wiser quizzed some key industry figures.
Ms Hall likewise elaborated on the changes taking place in the industry highlighting the progress of its Botanic Lab drinks brand.
“It’s encouraging to be talking about the true, real brand stories, and brand stories in CBD are no different to any other story; They have to be genuine and rooted in an original story and they have to engage the consumer.
“We are at an exciting stage in this industry where those stories are no longer just about CBD; having CBD in a product is not the interesting thing, now.
“We have to create brands around ingredients which engage the consumer. At Botanic Lab our USP is using interesting ingredients, product innovation and delivering a unique customer experience. CBD happens to be one of those.”
The GCI Virtual Summit continues today – Thursday November 12. For further info click here