Opportunities for CBD in Convenience Stores

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.

Marketing CBD

CBD products offer opportunities to reach busy shoppers who are look- ing to de-stress and relax. The top five medical conditions reported by c-store and gas station CBD consum- ers are anxiety (55% of respondents), depression (40%), insomnia (29%), chronic pain (24%) and PTSD (18%), 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 after- noon pick-me-up and as a substitute or supplement to alcoholic beverages. Tinctures can be marketed to consumers looking for daily anxiety relief, while topicals like CBD balms and roll-ons can be targeted toward individuals seeking to relieve chronic or post-workout pain.

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 con- sumers looking to de-stress and relax.

Virginia Lee, CBD research manager for the Brightfield Group in Chicago, works closely with Brightfield’s Analyst, Data Science and Business Development teams to develop platform offerings and custom research across the U.S. CBD market. For information, visit www.BrightfieldGroup.com.

Quelle: cstoredecisions.com

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