DENVER —Cannabidiol (CBD) is taking the convenience-store industry by storm, having emerged in products such as gum, lollipops and canned drinks over the past year. Some retailers have begun stocking these items in c-stores, while others—because the U.S. Food and Drug Administration (FDA) hasn’t released a set of guidelines—remain hesitant to do so.
Despite the lack of clarity, one thing is certain: consumers are interested.
“Twenty-percent of c-store customers said they’d visit their favorite c-store more often if CBD products were available in it,” said Donna Hood Crecca, principal for Technomic, at CSP’sCBD and the Future of Cannabis Forum in Denver. “Chocolate candy, gum, baked goods, topicals, capsules—these are the things that will prompt consumers into stores if they know they are available.”
But knowing that consumers are interested in CBD is only a starting a point. To capitalize on CBD, retailers must know who these consumers are: their preferences related to CBD and cannabis, the products they desire, reasons for use, what they’re ultimately looking for in CBD and more.
Here are 10 things to know about CBD consumers …
1. Tobacco users are CBD users
Tobacco users are more likely to approve the legislation of both recreational and medicinal cannabis than nonusers of tobacco, said Don Burke, senior vice president of Management Science Associates Inc. (MSA), during the conference. This has a direct carryover to CBD as well, and the emergence of CBD in c-stores may cannibalize tobacco products down the line, he said. In states where CBD is fully legal, cigarette sales dropped 5.4% from 2017 to 2018, according to MSA. On the contrary, in states where CBD is illegal, cigarettes declined by only 4% during this time frame.
“If you’re a retailer looking to boost sales drops from tobacco, [CBD] may help,” Burke said. “Keep in mind, though: It may cannibalize tobacco altogether.”
2. Google searches
There is a strong correlation between internet browsing and interest in CBD products. MSA monitored Google search trends between January 2014 and March 2019 regarding cannabis and tobacco-related items, such as vapes, chewing tobacco, cigarettes, cigars and CBD. While vape products—specifically Juul—dominated searches for a while, CBD became the most searched topic as time progressed and is now searched more than any of its counterparts.
“Growth in Google searches and consumer attitudes suggest increased interest to purchase CBD products,” Burke said. “If a consumer is going to buy a product, they usually search online first.”
Who's buying? Who's not?
CBD consumers tend to be younger shoppers, most often millennials, Burke said. These consumers are predominantly single and childless, home renters, pet owners and politically liberal. Moreover, they often spend more than three hours online daily and enjoy thrill-seeking activities in their spare time.
On the other end, consumers who are around 50 and older, retired, married or widowed oppose CBD. Many of these consumers have owned a home for decades, are religious and politically conservative. While their counterparts spend hours a day online, these consumers spend less than 60 minutes a day on the web and enjoy leisure activities. They oppose CBD and cannabis because of fear or harm, Burke said.
4. Top products
Retailers who are getting started in CBD should explore gummy, oil, topicals and vapor products, Burke said. Gummies, oils and vapes made up more than 70% of the total CBD item dollar share in 2018, according to MSA. The other 30% belonged to soft gels, tinctures and beverages.
“If you’re a retailer thinking of getting into CBD, gummies are an area taking off,” he said.
But just because gummies are thriving doesn’t mean they’ll remain the top CBD product down the line. Nearly a quarter (23%) of CBD consumers use vapor items once a week, the highest of all product types, said Crecca, citing the C-Store MarketBrief from January 2019 conducted by Technomic. This is followed by concentrates (22%) and nonchocolate candy (17%).
“There’s no particular category that CBD users gravitate to,” she said.
5. Reasons for use
Consumers mainly use CBD for wellness purposes. The top drivers for CBD use include for better sleep (58%), relaxation (56%) and chronic pain (55%), according to Technomic.
“General wellness could prompt c-store consumers’ consumption,” Crecca said.
MSA also concluded that consumers use CBD to unwind and fall asleep. Millennials tend to use CBD more for relaxation purposes, while baby boomers use CBD more for pain treatment, Burke said.
6. Source of purchase
Convenience stores are not seen as a primary source for purchasing CBD products, said Crecca. Instead, most consumers (49%) prefer drugstores, online retailers (43%) and even health food stores and vitamin shops (41) before c-stores (32%), according to Technomic. While there’s no single channel that owns the CBD category—yet—the data lets retailers know which competitors their consumers are thinking about in terms of where they’ll get their CBD.
“Drugstores right now are the go-to, and we need to keep an eye on them to see how they’re approaching CBD,” Crecca said.
7. Consumer knowledge
More than half (54%) of c-store consumers said they’re knowledgeable about CBD, according to Technomic. When splitting these consumers into sectors, 50% of super heavy c-store users (those who visit daily) said they’re aware of what CBD is, compared to 32% of heavy c-store users (those who visit twice per week).
And even consumers who aren’t knowledgeable about CBD are still intrigued by it. Nearly two-thirds (64%) of those who said they’re unaware of the details of CBD are interested in trying it, and 47% said the same for hemp, according to Technomic.
8. CBD in food
More than half of consumers (54%) would be interested in purchasing CBD-infused prepared foods or beverages in c-stores if they were available, according to Technomic. This is especially true among super heavy c-store users (86% agree) and heavy users (71%). When it comes to specific items, 67% said cold beverages sound most appealing, the highest of any product type. This was followed by hot beverages (62%), baked goods (59%), frozen beverages (43%) and condiments, sauces or flavorings (26%).
9. What are they looking for?
Consumers are also inclined to purchase a specific CBD item depending on its labeling. Two-thirds of consumers said they want to see specific effects of the substance labeled on the packaging, according to Technomic. Also, 56% said they want to see the CBD’s origin labeled, 40% said organic claims, 40% said proof of third-party testing and 34% said the potency percentage.
“Consumers 35 and older are more concerned with purity and potency than younger consumers, who are more concerned with organic claims,” said Crecca.
10. Views on legality
Although not all c-store consumers are knowledgeable about CBD and cannabis, most support its legality. Nearly all (95%) of c-store consumers support some level of legalization of hemp and CBD, according to Technomic. Moreover, 52% say hemp and similar products should be legal for any use. More than a third (34%) agreed that CBD and cannabis should be legal in limited capacities, and only 5% of c-store consumers believe CBD and cannabis should be illegal in all forms.