CBD is a hot commodity right now. Nielsen reports that this cannabis-derived compound is on track to become a $6 billion industry by 2025, but what does that mean for CPG companies looking to cash in on the trend?
CBD growth across markets
Our data suggests that the opportunity size of this "green rush" varies significantly by market:
Consumer interest in CBD is on the rise, but it's not growing equally in every market.
Consumer conversations are up across the board, but CBD has gained the most ground in the Food & Beverage market, where it commands 1.4% of all conversations.
In contrast, CBD is mentioned in only 0.3% of all Beverage Alcohol conversations. Our research suggests that's because consumers are largely interested in CBD for its health & wellness benefits, which doesn't quite fit with current perceptions of BevAl. The success of functional alcohol brands like Sufferfest and Boochcraft indicates that the terrain is changing, but integrating CBD into the market is likely to be an uphill battle in the near term.
Is CBD a trend or just trending?
Whenever we see a flurry of consumer conversation around a topic, we immediately begin to wonder whether something is a trend—a long-term market shift that brands can capitalize on—or just trending because of some recent event or product launch.
Sustained consumer interest is a key signal of a trend. When consumers repeatedly talk about a brand, product, or ingredient, it indicates a higher level of investment than a single mention that never recurs.
So how loyal are consumers to CBD? Let's take a look:
At its lowest point, one-month consumer retention for CBD is 12%. At its peak in F&B, MoM consumer retention hit 31%.
CBD's consumer retention numbers are solid. For example, within F&B conversations over the last year, about 25% of consumers who mention CBD mentioned it again the next month. In contrast, at its lowest point in BevAl (the start of the orange line), CBD's consumer retention is a respectable 12%.
What's more, CBD's consumer retention is on par with beloved ingredients such as keto fave MCT oil in F&B and shea butter in Beauty and Personal Care. Because it falls within a similar range of ingredients that already have proven staying power, we're optimistic that CBD could join their ranks as a mainstay within these markets.
What else is up with CBD?
There's a lot going on with this fast-growing trend. For more detail on CBD's performance in the Beauty, Food & Beverage, Beverage Alcohol, and Personal Care markets and a peek at the core traits consumers associate with CBD, check out our free CBD Consumer Insights report.