3 Ways Data Can Help You Better Plan for the Future

The cannabidiol (CBD) industry has gone through significant ups and downs in 2020. These changes have accelerated existing trends and even brought new ones. For example, CBD usage among existing consumers is increasing, even as CBD adoption by new consumers is slowing down compared to last year. Consumers are finding value in their CBD products, and brands are responding with better, more innovative products.

When massive industry shifts such as these occur, it is an ideal time to assess market dynamics, understand new trends and better plan for the future—and understanding how data’s role in this is key.

1. Data can help you understand future demand and capacity needs.

Market intelligence and forecasting data can be used to understand the future demand for CBD and how much biomass and extraction capacity will be needed to meet those needs. While 2020 has been a tough year for the industry, we at Brightfield Group expect to see strong growth in 2021, assuming the U.S. economy recovers due to a COVID-19 vaccine and an economic stimulus package. We also anticipate CBD regulations from the FDA next year, which will further boost the industry.

Furthermore, our consumer insights show that CBD is not a fad. Instead, it is a lasting addition to consumers’ wellness, fitness and health routines, and demand for it will continue to grow.

Most CBD consumers are using CBD at least five days a week to address physical ailments (chronic pain, arthritis), psychological issues (anxiety, insomnia) and general wellbeing. From Q1 to Q2 2020, heavy use (using CBD five or more days per week) increased from 52% of CBD consumers to 56%.

2. Innovation trends can help guide product offerings.

Understanding the types of CBD products growing in popularity and where innovation is booming can help hemp cultivators and processors offer the most relevant products. We are currently seeing the introduction of CBD as an ingredient in several adjacent consumer packaged goods (CPG) industries such as cosmetics and beverages. The inputs these manufacturers are looking for may vary by industry and product.

More large mainstream players are entering the industry, especially in the beauty and personal care segment, creating more partnership opportunities. These products are also resonating with consumers, indicating strong future potential: 30% of consumers reported using CBD beauty and skincare products in Q2 2020, compared to 18% in Q1 2020. Retail sales of CBD beauty and skincare products are projected to grow by 27% from 2019 to 2020. This change took place as consumers turned to beauty and skincare products in general as part of their self-care regimens, to look good for virtual calls and as a salon or spa substitute.

3. Data can help you monitor the market’s focus areas and stay ahead of long-term shifts.

While CBD has been hemp’s star cannabinoid, cannabinol (CBN) and cannabigerol (CBG) are gaining traction. With product launches from several leading CBD players, including Green Roads, CBDfx and Medterra, CBD consumers are becoming more aware of these minor cannabinoids.

From Q1 to Q2 2020, awareness of both CBN and CBG among current CBD consumers increased from 11% to 15%.

Incorporating minor cannabinoids into CBD products allows companies to offer additional benefits and charge higher prices. Our consumer research has found that potential CBG consumers are more likely to have higher incomes and higher education levels than the average CBD consumer. This makes them good targets for CBG products, which are often more expensive than CBD products because until recently, hemp has contained very low amounts of CBG.

Data can illuminate developing trends. It can also help business owners monitor shifts in the market and make decisions about product offerings, pricing and future goals. Relying on multiple inputs (including data) can help provide a well-rounded foundation for greater success.

Virginia Lee is CBD research manager at Brightfield Group. She develops and executes syndicated and customized research covering the U.S. CBD market.