CANNABIS What's New in the Food & Beverage Space?
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CANNABIS What's New in the Food & Beverage Space? Cannabis-infused food and beverage was already a growing category when the pandemic hit in 2020, and now, after more than a year of uncertainty and stress, consumers are more eager than ever to find products that provide them some relief and comfort. In fact, one report on cannabis consumption found that 42% increased their overall cannabis use during the pandemic. This has created significant demand for both CBD and THC-infused food and drink products, particularly as more and more states legalize recreational marijuana use. The growing market and high demand means that brands have plenty of room to innovate around products of exceptional quality that deliver on both taste and function. Read on to see where you and your brand may fit into the cannabis boom.
The State of Cannabis
Since Colorado and Washington legalized CANNABIS IN
the recreational use of cannabis in 2012, a COVID-19
wave of marijuana reform has taken over the
United States. As of June 2021, THC products
are fully legal in 18 states and decriminalized
in 30, and those numbers are only expected
to increase. Technavio reports that the global
cannabis edibles market is “on track to register 42% OF USERS
across all demographics
a compound annual growth rate of more than
increased their overall
25% between 2018 and 2022, to reach $25.7 cannabis use
billion.”
Images Sourced: Disa.com
In 2017, food products made up the largest share of THC products, with
more than 60% of the market, and that number is expected to increase through 2022.
Looking ahead even further, the Marijuana Business Factbook predicts that the U.S. market
will hit nearly $45 billion by 2025. And with more consumers searching for functional
products that taste great, there is much opportunity in this space. 56% OF PARENTS
living with young children
increased their cannabis
“2020 was an important year in cannabis. Many marijuana businesses consumption.
were declared essential during the pandemic, and more states legalized
cannabis markets. 2021 will see more states join in, and their programs
are getting started faster than we’ve previously seen.”
– JENEL STELTON-HOLTMEIER, MARIJUANA BUSINESS FACTBOOK EDITOR
20% INCREASE IN EDIBLE
usage across all
Want to learn more? Check out our 2020 insight on Cannabis Here. demographics
Source: New Frontier Data - Cannabis
Consumption During COVID-19
THC vs CBD
There are multiple compounds that can be extracted from THE FDA FACTOR
hemp, but the most popular by far are THC and CBD. So, The use of CBD in food products has
what’s the difference? increased exponentially over the last
decade, but it still hasn’t been approved
THC by the FDA, which currently takes the position that interstate
• A psychoactive compound that produces a “high,” often sales of CBD food products is unlawful. However, the
with energizing or calming qualities cannabis research company BSDA expects that the FDA will
• Derived from plants specifically bred for high THC approve its use by 2022. FDA approval hasn’t stopped the CBD
concentrations market from booming though: BSDA also reports that 33% of
U.S. adults use CBD products.
CBD:
• Non-psychoactive compound typically used for relaxing
CBD and THC aren’t the only cannabinoids out there
qualities
–– look for other compounds like CBG, CBN, THCA
• Often derived from industrial hemp with low or no
amounts of THC
and THCV to start popping up in consumer products
soon. Since these are lesser-known additives, the
Source: Disa.com
opportunity for market expansion is huge.
Source: Nasdaq
PRODUCTS OF NOTE:
PLUS SLEEP CLOUDBERRY GUMMIES AMERICAN SHAMAN CBG GUMMIES
include 5mg THC, 1 mg CBD and 1 mgCBN, a feature CBG which is said to increase focus and
cannabinoid believed to increase relaxation. energy. Each cherry flavored gummy is made
The formulation is designed to help the user with apple cider vinegar and contains 10mg of
sleep better and features a natural cloudberry cannabigerol and 3.5 mg CBD per serving.
flavor.
Images Sourced: Plus Products THC, American Shaman
Top 10 Edible Flavors Top 10 Beverage Flavors
by Sales Volume by Sales Volume
Gummies - Unspecified Citrus
Milk Chocolate Lemonade
Watermelon Flavorless
Raspberry or Blue Raspberry Water
Strawberry Tea
Other Strawbery
Blueberry Berry
Cherry Grape
Pomegranate Apple
Pineapple Root Beer
Source: Headset - July 2020 Data
Regulatory & "The Teenager Industry" When it comes to regulations, the cannabis industry can be thought of as still in its adolescence. As the industry is still new and consistently changing with regulations, the cannabis industry can be looked at as a "teenager industry." It's often chaotic, changing, maturing and is full of new entries and startups. Food and beverage developers working in this space are often discovering more about this space as they go. For example, some developers who are often not familiar with food regulations or ingredient restrictions and how to apply them. They're also often working with a restricted toolbox, highly regulated products, inconsistent regulations and few resources. So, how do you stay within the murky regulations and keep trust? Our advice: Rely on your experienced partners, such as flavor and ingredient suppliers with accessible regulatory teams. Do your best to maintain transparency with your consumers, through education and honest labeling. There is clear opportunity -- but it's important to be truthful and never misleading to your consumers.
Who's Buying?
While cannabis may have once PRODUCTS OF NOTE:
had a reputation for being a
product for young people and MARTHA STEWART CBD WELLNESS GUMMIES &
hippies, a more mainstream MINT COLLECTION includes gummies and mints
acceptance has coincided with featuring flavors like blood orange, Meyer lemon and
kumquat. They are infused with a CBD isolate and
widespread legalization. This
are available in quantities of 10, 30 or 60.
trend can also be seen in the
number of celebrities, including
Martha Stewart and Gwyneth
Paltrow, who are endorsing edible and flavorful cannabis
products. A survey from A.T. Kearney reports that as of 2017,
CANN PARTY PACK contains 2 6pks of Lemon
more than 122 million Americans had used cannabis, with
Lavender, Blood Orange Cardamom and 1 6pk of
30- to 49-year-olds making up 51% of U.S. consumers. Grapefruit Rosemary. The sparkling, non-alcoholic
drinks contain low doses of both CBD and THC
USAGE FACTORS: for the “same buzz, hold the hangover.” Celebrities
• 55% of American adults who use cannabis do so to relax such as Gwyneth Paltrow have invested in the Cann
• 40% of American adults who use cannabis use it for company.
stress relief or to enjoy social experiences
• 55% of those surveyed said they’d be willing to try a
cannabis-infused product
- 55% said they would be willing to try a food product, RUBY SUGAR is a flexible edible cannabis product
created to easily incorporate into your everyday
such as snacks, candy, or packaged food
food and drink. It features 50mg THC per container
- 32% said they’d be willing to try it in a nonalcoholic or 5mg THC per serving.
beverage
- 19% said they’d be willing to try it in an alcoholic
beverage
Source: New Frontier Data - 2017 Report
Images Sourced: Shopcanopy.com, TechCrunch, Rubythc
Popular Categories
The cannabis space is booming with opportunity cross-category. Below are a few food and beverage categories we’ve
spotted flavorful products of note from.
BAKED GOODS KANEH BEST OF BOTH WORLDS BROWNIE
• Most popular offerings include brownies, DUOS are half rich fudge brownie, half
blondies and cookies chocolate chip cookie duos that include 100
• Often incorporated as part of relaxation or mg of THC per package of two.
indulgence rituals
CONFECTIONS
MENDI FULL SPECTRUM GUMMIES
• Common offerings include chews, gummies feature hemp-derived CBD and are vegan and
and chocolate all natural. They feature less than 0.3% THC,
25mg CBD and a fruity, lemon , orange and
• Small size makes these perfect for microdosing
cherry flavor.
BEVERAGES
• Rapid absorption from soft tissues in mouth
QUATTRO SPARKLING CBD WATER contains
makes drinks an ideal vehicle for effective 20mg U.S. grown hemp-based CBD and
consumption comes in flavors including Cucumber + Mint,
Passionfruit + Guava, Ginger + Lime, and
• Development of “nanoencapsulation” process
Blueberry +Acai. Already the best-selling CBD
has made it easier to blend cannabis oils into
beverage in Canada, these zero-sugar sparkling
drinks drinks recently launched in the U.S.
Images Sourced: PRNewswire, A Proper High, Kaneh Edibles
Favorite Flavors
According to FONA’s proprietary survey from 2020, cannabis consumers across all demographics
are interested in multiple flavor options , preferring that portfolios offer 4-6 choices. But what
those preferred flavors are varies by product type. Consumers do not want to be limited to just one
option, indicating the opportunity for seasonal and LTO flavors also.
CBD- CALM & REL AXED: THC- ENERGIZED & REFRESHED:
According to Michelle Sundquist, Director of Innovation and THC consumers often seek out bold flavors reminiscent
Product design for SoRSE Technology, CBD consumers are of energy drinks, including grape, orange and mango. The
often looking for a relaxing, spa-like experience, including bitter taste of cannabis can also be a plus as cannabis drinks
flavors like grapefruit, cucumber and mint. can give a “beer-like” experience similar to hops without the
alcohol.
PRODUCTS OF NOTE:
FAVORITE FRUIT Y FL AVORS
MINDY’S CHEF-LED ARTISANAL EDIBLES
Famous for her decadent desserts, James Fruity flavors are often the top flavors across several
Beard Award-winning chef Mindy Segal’s formats. Below are a few ways the cannabis space can
THC-infused confections come in bold, bright
innovate with these profiles.
flavors including Cool Key Lime Kiwi, Glazed
Clementine Orange and Lush Black Cherry .
Premium Profiles: Indulgent & Nostalgic:
Image Source: Mindy's
• Blood Orange vs. • Apple Pie vs. Apple
RECESS CBD SPARKLING WATER Orange • Key Lime Pie vs. Citrus
Each stylish can of Recess contains CBD, • Meyer Lemon vs.
L-theanine, ginseng and lemon balm. Creative Lemon Fruit + Botanicals:
flavor combinations including pomegranate-
• Grapefruit Basil vs.
hibiscus and coconut-lime round out the
Grapefruit
relaxing experience.
Image Source: Bon Appetit
Flavor Challenges
The naturally bitter flavor PRODUCTS OF NOTE:
of hemp extracts can
be off-putting to some GARDEN SOCIETY SPICED DARK
consumers. One way to CHOCOLATE WITH CHILI
address the issue is through feature artisanal chocolates that come
the use of a masking agent, in regular (10 mg THC) and low-dose
but there are also plenty (5 mg THC) servings and include spicy
chiles and cinnamon for a flavorful
of natural ingredients that
punch.
complement cannabis’s
bitterness. Grassy herbs, as well as other bitter notes like
hops, are all reminiscent of cannabis’s natural terpenes, LAGUNITAS HI-FI HOPS BEVERAGE
while contrasting flavors like tart citrus can provide some is a zero-alcohol offering from one of
balance . For product developers, finding this balance the most popular craft breweries in the
U.S. This drink contains equal amounts
is crucial to creating a pleasant tasting and successful
of THC and CBD for an experience that
product, especially since 45% of consumers rank taste as is “both calming and invigorating.”
more important than dosage.
COMPLEMENTARY FL AVORS:
• Herbs including basil, cilantro and thyme
• Chocolate
• Coffee
• Smoke 45% RANK TASTE AS MORE IMPORTANT
• Citrus
than dosage in edibles according to
• Chiles
• Black pepper FONA's 2020 proprietary survey.
• Tomatoes
• Vinegar
Image Source: Garden Society, hifihops
Cannabis and Wellness
The increased acceptance of PRODUCTS OF NOTE:
medical marijuana over the
last decade has led to cannabis TRANQUINI WOWIE - These sparkling waters
products being closely tied to combine cannabis with other functional foods and
wellness in consumers’ minds; adaptogens like green tea, lemon balm and lavender,
consulting firm A.T. Kearney all intended to increase relaxation.
reports that 86% of American
adults surveyed now believe that
marijuana has valid therapeutic
uses. These claimed benefits
ranging from treating Alzheimer’s and arthritis to improved focus
and relaxation. PABST BLUE RIBBON HIGH SELTZER - An alcohol-
free option from the well-known Pabst brewing label,
their High Seltzer contains 10 milligrams of THC per
serving and is “perfect for sparking your creativity.”
of U.S. adults aged 18+ think hemp derived
CBD products have focus-enhancing benefits
of U.S. adults aged 18+ think hemp derived
CBD products have calming/relaxing benefits
Source: Mintel "In fully legal cannabis markets, about 60
percent of consumers seek health benefits
In addition, a growing interest in “clean” lifestyles has also
made cannabis an appealing alternative for those who are from their cannabis consumption.”
avoiding alcohol, and the increased popularity of microdosing – BDSA
has allowed consumers to take charge of how much cannabis
they consume, resulting in sales of low-dose THC beverages
to increase by roughly 70% year-over-year .
Images Sourced: Grocery.comSOURCES
THE TAKEAWAYS •
•
Disa.com
MJ Biz Daily
•
•
Kaneh Edibles
Mindy's Edibles
• Prepared Foods • Recess
The chaos of the last year has had more Americans than ever turning to cannabis • Nasdaq • Garden Society
edibles for stress relief and relaxation, a trend that shows no signs of slowing • Plus Products THC • Mintel
down even as the pandemic wanes. But eagerness for cannabis products doesn’t • New Frontier Data • Pabst Labs
mean that taste can be ignored –– it’s one of the largest factors in buying • IFT • Grocery.com
decisions. Bold flavors and complementary tastes have been hits with existing • Totalfood.com • BDSA
edibles, and the increasing familiarity with other cannabinoid compounds like • PR Newswire
CBN means that there’s even more opportunity to play with new products
and flavor combinations. The consumer cannabis space is only going to grow
–– the question is: how can you capitalize and help nourish and comfort this REQUEST YOUR
consumer base? FREE
FLAVOR SAMPLE HERE
You Deserve More. Let's Get Started.
What does true partnership look like? You deserve a flavor partner ready to turn these
trends into the tangible.
Let FONA’s market insight and research experts get to work for you. Translate these
trends into bold new ideas for your brand. Increase market share and get to your
“what’s next.” Our technical flavor and product development experts are also at
your service to help meet the labeling and flavor profile needs for your products
to capitalize on this consumer trend. Let’s mesh the complexities of flavor with
your brand development, technical requirements and regulatory needs to deliver a
complete taste solution.
From concept to manufacturing, we’re here for you — every step of the way. Contact
our sales service department at 630.578.8600 to request a flavor sample or chat us
up at www.fona.com/contact-fona/You can also read
