First Look at How CBD Products Performed in 2019

NEW YORK — “Hemp CBD is poised for explosive growth, but don’t assume it’s a slam dunk. Do the work!”

This was one of the main takeaways from Nielsen’s recent CBD webinar titled When Cannabis & CPG Collide: How to Prepare Your Business.

During the event, Maria Lange, Nielsen’s vice president of pet and cannabis practice areas, and Rick Maturo, Nielsen’s associate director of cannabis practice area, took attendees through numerous cannabis data insights from 2019 and examined major issues facing the industry in 2020.

While the webinar covered both marijuana and hemp/CBD, it focused much attention on the latter, which Nielsen estimates will hit sales of $900 million to $1.2 billion this year.

Here are four important insights Lange and Maturo had for convenience retailers selling or considering selling hemp or CBD products …

When examining just who the hemp or CBD user is, Nielsen found the segment comprises just about everyone. One in three CBD consumers have families and they live all over (39% rural, 37% suburban, 24% urban). While they tend to be younger, one in three is older than 35. They skew more female than male (57% of CBD consumers are women), and a whopping 74% of them have pets.

CBD and hemp products are still mostly sold in niche retail locations, with 73% of sales occurring at either CBD-specific stores (both online and brick-and-mortar) or what Nielsen calls specialty retail. By comparison, just 16% of CBD and hemp sales happen at mainstream retail. That said, Nielsen said the opportunity lies within those mainstream channels, where convenience represents 53% of the $24 million in CBD sales coming from convenience, food, mass and drug channels.

There’s a very different mix of CBD product forms being sold in convenience stores vs. other traditional CPG channels, according to Nielsen point-of-sale tracking data through August 2019. While topicals and tinctures dominate nonconvenience mainstream channels (accounting for 49% and 39.1% of sales, respectively), convenience is more diverse. Gummies make up 54.1%, capsules 15.1% and tinctures 13.1%, and beverages are 13.1% of the mix, Nielsen said.

When looking to 2020, Lange and Maturo identified three key questions for the CBD-hemp industry, all focused on the question of “winners.” They were:

• Who will win the CBD need state: marijuana products with a high amount of CBD, or hemp products with no THC?
• Who will win the shelf at traditional retail: CBD companies that make their way into traditional CPG distribution channels, or CPG companies that add CBD-infused products into their portfolio?
• Who will win the channel battle: the direct-to-consumer and specialty retail model that’s prevalent today, larger mainstream brick-and-mortar CPG retailers or convenience stores?

Nielsen expects answers to those questions to come in 2020.