The Path to Establishing A New Cannabis Beverage Industry
The cannabis beverage industry is still in its infancy, but it’s expanding at a fast pace. The demand for beverages containing marijuana has resulted in the development of new categories like THC-infused sparkling water and vape juice. Because this market is so new, there are not many established names to choose from when considering where to invest; however, that hasn’t stopped big alcohol and tobacco companies from getting in on the action.
In 2018, Constellation Brands, the company behind Corona beer, invested $4 billion in Canadian cannabis producer Canopy Growth. The following year, Molson Coors Canada formed a joint venture with Hexo Corp., another Canadian cannabis company, to develop non-alcoholic, cannabis-infused beverages. And in 2019, AB InBev, the world’s largest brewing company, announced it was teaming up with Tilray, a Canadian cannabis grower, to research and develop non-alcoholic drinks containing THC and CBD.
The entrance of large corporations into the cannabis beverage space is a sign that this industry is here to stay. If you’re thinking about starting a cannabis beverage company, there are a few things you need to know.
There are four main areas of opportunity encouraged by consumer sentiment that manufacturers should think about in the current market.
The first is low-calorie/no-sugar products. Consumers are health conscious and looking for drinks that won’t sabotage their diets. This is especially true of millennials, who are the most likely to consume cannabis beverages.
The second opportunity is drinks that offer functional benefits beyond just getting you high. CBD-infused beverages, for example, are popular because they’re thought to help with anxiety and pain relief.
Third, there’s a need for convenient packaging formats like single-serve cans and bottles. This is in line with the general trend toward on-the-go consumption.
Finally, the flavor is important. Cannabis beverages should taste good if they’re going to be successful with consumers.
If you can create a product that meets one or more of these needs, you’ll be well on your way to success in the cannabis beverage industry.
After manufacturers have a firm grasp on consumer insights that are propelling gains in the beverage category, they may begin to consider the various market possibilities that work in their favor.
Canned, bottled, and boxed products are currently the most popular format for cannabis beverages, but this could change in the future as new technologies emerge. For example, Keurig-style machines that make THC-infused drinks could become popular. Or, if marijuana is legalized at the federal level in the United States, we could see a boom in cannabis bars and restaurants, which would create new demand for draft beer and other types of marijuana-infused drinks.
Cannabis has a greater range of health advantages. Medicinal, nutritional, and even physical or emotional characteristics are all accessible to beverage producers. Cannabis beverages can provide different terpenes and nutraceuticals in contrast to alcoholic drinks, providing simultaneous benefits to the nervous system, immune system, and metabolic system. These products can also be designed to have no psychoactive effects, making them more approachable to a wider range of consumers.
The advantages of production. Despite the fact that a 12-ounce can of beer only has 2 ounces of alcohol, you won’t be able to shrink or convert it into a concentrate, as was done successfully by Coca and Pepsi with their concentrates distribution model for concentrated product shipments to manufacturing plants. CBD- or THC-infused beverage producers will be able to take advantage of this method when federal legalization occurs by sending their concentrate to existing facilities that already produce carbonated beverages. This will provide considerable cost advantages and a shortened time to market.
CBD and THC, the two main active compounds in cannabis, have different effects on the body. THC is the compound that gets you high, while CBD is thought to offer medical benefits without the psychoactive effect. This means that there’s an opportunity to create products that target different consumer needs. For example, you could make a drink that contains only CBD for people who want the medical benefits but don’t want to get high. Or you could make a drink with a low THC content for people who want to enjoy the social aspects of marijuana use without getting too stoned.
The legal landscape of cannabis is complex and constantly changing. In the United States, marijuana is still illegal at the federal level, but some states have legalized it for medicinal or recreational use. This creates a patchwork of laws that can be confusing for manufacturers, retailers, and consumers alike. It’s important to stay up-to-date on the latest legal developments in order to avoid running afoul of the law.
The cannabis beverage industry is still in its early stages, which means there’s a lot of room for growth and innovation. If you can tap into consumer needs and capitalize on favorable trends, you could find success in this rapidly growing industry.