'How to Develop & Brand CBD Products'
"The marijuana industry has always had a bit of an identity crisis in terms of branding. After all, the plant has both medicinal and euphoria-inducing properties, so it appeals to different types of people for different purposes. Will your target consumers use it to have a good time, to medicate, or a little bit of both? If it’s both, how do you straddle that line? Are your competitors simply natural remedies and over-the-counter medicines, or are they alcohol and coffee manufacturers as well?
The emergence of CBD-dominant products is complicating the matter even further. CBD is a cannabinoid with analgesic and anti-inflammatory properties similar to THC, but it differs in a very important way: it does not induce any psychoactive effects. This means that while there is significant overlap between the consumer bases for the two types of products, THC is limited to people who are open to feeling “stoned” to some extent. CBD-only products, on the other hand, appeal to all adults who lead a health-oriented lifestyle and want a natural way to relieve physical and mental stress. This could be the product line that exposes marijuana to an entirely new market segment made up of those who never considered the plant before, strictly because they were turned off by THC’s psychoactive effects.
If CBD manufacturers are to target this segment successfully, they need to make sure their positioning strategy resonates with this type of user. To understand this market better, Brightfield Group recently released on the CBD-dominant goods industry; one on those derived from marijuana, and the other on hemp. Hemp and marijuana differ in many ways, but most notably in this case, hemp varieties of cannabis contain only negligible amounts of THC by nature, so hemp CBD producers specialize in medicinal products by default. The majority of marijuana-derived CBD products, on the other hand, are released as line extensions by companies that also specialize in THC-dominant products—which could be oriented towards either medical or recreational consumers.
While there are many differences between the two sides of the industry, one that made Brightfield analysts scratch our heads was the difference between the top-selling product subcategories in the hemp- and marijuana-derived CBD markets. For hemp-derived CBD, tinctures and oils - consumption forms focused on the ease of medicating - make up nearly half (47%) of the total market. In the marijuana-derived market, on the other hand, tinctures and oils comprise just 7.4% of all sales, and sugar candy leads with 28% of the market. Conversely, in consumer surveys conducted by Brightfield, marijuana-derived CBD users did not report a higher preference for sugar candies than hemp users did. In fact, CBD users across the board ranked vape cartridges, tinctures, oils, and topicals as top choices.
So why are marijuana-derived CBD sugar candies selling so much more?
?According to Brightfield data, sugar candy is the top-selling edible subcategory in the marijuana market at large, comprising 15% of all non-flower sales in 2017. It makes sense, then, that marijuana manufacturers launched CBD products as extensions of these lines, thinking of them as product variants. But if they want to tap in to new market segments who will use the product as a complement to their wellness-oriented lifestyles, selling candy that appeals most to recreational consumers is not the best approach.
Manufacturers hoping to successfully market and sell CBD-dominant medicine must rethink both their product development and branding strategies altogether. If you are thinking of launching a CBD line, it may be worthwhile to ask yourself the following questions:
Is my flagship product more popular with recreational consumers or medical consumers?
This can be a tough question to answer, considering there is significant user group overlap in the flower, edibles, and some concentrates product categories. Topicals, tinctures, oils, and capsules manufacturers will have more clarity, as these are each common forms of medicine.
And given what I’m producing, can my brand potentially resonate better with recreational users or medical users?
?This is where flower, edibles, and concentrates producers will have to make a decision. If consumers are apt to use your product to medicate and have a good time, do you want to focus on targeting one segment or both, and how will you connect with each? Treating these as separate and unique entities rather than one combined target group should help manufacturers carve out a more significant market share of loyal users.
As a business owner, it can be challenging not to get bogged down in day-to-day tactical decisions at the expense of making thoughtful, long-term strategic decisions. If you are considering launching or improving your CBD line, may help you ensure your marketing strategies are contributing to brand equity, and not holding you back from reaching your potential."
As published in www.brightfieldgroup.com by Kayla Hunter
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