Consumer Awareness Biggest Hurdle for Cannabis Beverage Makers

Assorted Cannabis Beverages

SoapBoxSample Poll Shows 45% of Consumers Unaware of Cannabis Beverages, Presenting Opportunity for Marketers

August 18, 2020, Los Angeles, CA — While the cannabis-infused beverage category is expanding rapidly, product awareness and brand awareness lag behind, according to a survey of 1,000 U.S. cannabis consumers fielded July 2nd through July 16th, 2020 by consumer insights firm SoapBoxSample. Results revealed that the top reason cited for not having tried cannabis beverage products is that 45% of consumers simply did not know they existed. Meanwhile, those who have tried it are likely to try it again. The most popular types of beverages consumers have tried and say they will have again are juice or fruit punch (68%), hot chocolate (61%) and non-alcoholic wine (60%). Certain categories of cannabis-infused beverages have even become a part of some consumers’ weekly routines including coffee (42%), tea (42%) and juice or fruit punch (41%).

“This study illustrates the enormous potential of the cannabis beverage market,” said Jacqueline Rosales, COO of SoapBoxSample. “Cannabis consumers are eager to try new products and they are expecting brands to bring products to market that speak to their specific tastes and preferences. By connecting with their target audience, brands can make strategic decisions supported by market insights.”

Beer without cannabis is the most popular alcoholic beverage in the United States. However, that popularity doesn’t seem to translate to the cannabis category. SoapBoxSample asked consumers who hadn’t tried a cannabis beverage about their interest level in 13 different types of beverages. The only beverage that ranked lower than beer were aperitifs. Only 33% expressed an interest in trying cannabis-infused non-alcoholic beer. By comparison, 79% said they would like to try a cannabis lemonade or limeade. Other popular choices for would-be consumers include iced and herbal teas (79%), juice/fruit punch (77%), and soda/sparkling seltzer (72%).

Cannabis beer brands may be hoping to win over consumers once they sample the product. However, consumers who have tried cannabis beer have less interest in trying it again, compared to other beverage categories. While 39% of those who have tried cannabis beer said they would drink it again, 68% of those who have had cannabis juice or fruit punch said they would drink it again and 61% of those who tried cannabis hot chocolate would have it again. Adoption rates of cannabis sparkling water (59%), infused coffee/cold brew (58%) and infused iced or herbal tea (56%) were also relatively high, while cannabis beer (39%) and aperitifs (28%) ranked lowest.

The emerging popularity of cannabis beverages is reflected in the data. Among those who have tried cannabis beverages, 29% tried it for the first time in the last month. To understand rapidly evolving consumer preferences, SoapBoxSample looked at consumer interest in beverage types and awareness of cannabis beverage brands. Overall, brand awareness is low. Around 60% of consumers said they were unfamiliar with all 23 of the brands tested in this study, indicating there is room for cannabis brands to earn market share by increasing brand awareness.

The reasons people cited for consuming cannabis beverages mirror the trends that can be observed in the larger cannabis market. The desire to ease anxiety (53%), aid in sleep (46%) and manage pain or illness (37%) are some of the top reasons cited for consuming cannabis generally. A few drivers of consumption that are unique to the beverage category include enjoying the flavor (40%), curiosity about the taste (25%), ease of concealment (22%) and faster onset (21%). Demographic information from this survey shows that the cannabis beverage consumer is likely to be a white male between the ages of 21-54, who is married with children.

Learn More About Cannabis Research here.

The Cannabis Conundrum Continues

By Dan Parcon, VP of Operations, SoapBoxSample

With the US cannabis industry expected to reach $13.6 billion in sales in 2019 and a whopping $66.3 billion by the end of 2025 (Forrester Research, 2019), the growth and adoption of cannabis is laden with challenges at every point in the seed to sale ecosystem. It’s fair to say at this point, the surface has only been scratched.

The rapid growth of the cannabis industry is evidenced by the number of cannabis business events that take place every year across the United States. In maturing markets, gatherings like these are crucial to the evolution of the marketplace. By learning from each other, cannabis business leaders can then draw upon the shared experiences of the community to help them navigate the new era of cannabis. Last month, cannabis thought leaders, business owners, investors, and experts gathered at the National Cannabis Industry Association event in Long Beach, CA. The chatter ranged from legislation to supply-and-demand to branding.

Brands and Dispensaries Face Big Hurdles in Earning Consumer Trust

As expected, there was endless conversation around the vaping controversy. A mishap in an emerging market like cannabis can have immediate and direct implications, and the industry may remain on high alert for the long term. With the real-time and rapid spread of news, and having little control over the narrative, those in the industry have a delicate balancing act to maintain.

“Our research has shown time and again that while consumers are insatiably curious about cannabis products, brands still have a lot of work to do in gaining consumer trust. The current vape crisis is a major setback for the industry, that is likely to impact consumers’ attitudes and behaviors for years to come,” said Jacqueline Rosales, COO of SoapBoxSample.

The idea that bootleg or “backyard” vapes are making their way to consumers, tainting things for those who do things right, puts stakeholders at risk. Lindsay Robinson Executive Director, California Cannabis Industry Association, stated “Counterfeit cartridges with very prominent names are being sold in illicit stores, often times people have a very hard time figuring out what is real and what isn’t real.”

The problem of consumers being distrustful of cannabis products extends beyond vapes and vape cartridges. Cannabis consumers are also wary of accurate labeling of other products, including the flower itself. Recent finding from SoapBoxSample’s CANNApinion poll, a bi-monthly survey of 1,000 US cannabis consumers, revealed that 28% of cannabis consumers say they are not very or not at all confident that the strains they purchase in dispensaries are accurately labeled. Dispensaries and brands face a big challenge in gaining the public’s trust. To move forward as an industry, companies need to assure their customers that their products are safe, legitimate, and accurately labeled.

Dispensaries Should Focus on the Shopping Experience to Build Loyalty

Experience plays a big role in the success of a dispensary. Jennifer Whetzel, Founder of Ladyjane Branding, said, “I’ve talked to a number of people who turned away from going to dispensaries due to their shopping experience.”

In more mature markets, the consumer has choices and can go elsewhere or leverage a delivery from their home. The great number of cannabis considerers account for much of the expected growth in the market. While they seek info online, they also rely on the expertise of those in the dispensary. A negative experience may not just lead the customer away from the specific dispensary, but away from even considering cannabis – whether it be for medical or recreational use. Perhaps of even more concern is budtenders and dispensary workers making uninformed recommendations resulting in negative experiences for the users.

SoapBoxSample’s recent CANNApinion Poll revealed that 57% of cannabis consumers say a consistent budtender is extremely or very important while only 30 % say they trust the advice of a budtender when researching products.

Brands and dispensaries must understand the products being sold, what products are trending, and more importantly, what their target audience is searching for. Many times consumers are looking for education and information, and most (66%) feel that they don’t have enough information to make an informed decision (CANNApinion Poll, August, 2019).

Marketing Messages Must Match the Consumer Wants and Needs

“Sometimes our message (of fun) gets a little lost, as being advocates we like to talk about core benefits. Sometimes these products are better for a fun and recreational use and there is no reason to shy away from that as long as we are targeting responsibly.” – Taylor West, Partner Heart and Mind Media.

There are some brands and markets solely focused on the medicinal benefits. Others market to recreational users. In some marketing, there is no delineation. With many scurrying to be first or at least quick to market, it seems traditional business practices around marketing, branding and adverting are being lost.

While there is acknowledgement within the industry about the need to adopt more sophisticated business practices, change is slow. One year ago (October 2018), at the USCC (US Cannabis Conference) in Phoenix, AZ, thought leaders discussed the role consumer research can play in the development of new cannabis products. Kaila Strong, Director of Marketing at Jupiter Research, had this advice for cannabis marketers — “When we’re dealing with wholesalers all the time I think we lose that connection with the consumer. You probably consume, but you shouldn’t assume that you are your consumer.”

The business challenges being discussed at NCIA all boiled down to one constituent – the consumer. There is no “one” cannabis consumer and therefore there is no “one” marketing strategy. Brands must have clarity on why they exist and who they want to sell to – and then hone in on the why to buy. Without direct feedback and insight in the whats and whys cannabis businesses are playing a dangerous game of guts and guesses. While cannabis companies are focused on staying afloat through the current political and regulatory climate, customer experience and consumer trust is everyone’s responsibility across the full ecosystem – from seed-to-sale.

As a consumer insights company committed to helping cannabis brands grow, we’re proud to be a sponsoring member of the NCIA. Our goal is to keep the cannabis industry moving forward through data and insights. To learn more, please visit https://www.soapboxsample.com/cannabis/.

From Sustainability to CBD – The Shopper Shift

By Jacqueline Rosales, COO, SoapBoxSample and icanmakeitbetter

With the global online grocery market predicted to reach $334 billion by 2022 (Forrester Research, 2019), the transformation of legacy grocery and retail practices, products and mindset is shifting rapidly. The industry is seeing new players enter, and take ownership of a full category, or create a whole new product category in a very short time. The threats are coming from all directions, and retail and grocery brands must not lose focus of the consumer drivers.

Sustainable Products are Now Mainstream

“It takes years to transform an industry that has relied on plastic. Grove Collaborative consumer products will be positive for human and environmental health. Grove consumers are all about celebrating the amazing choice people make across the country.”

– Stu Landesberg, Co-Founder & CEO of Grove Collaborative

Consumers are demanding sustainability — and brands are taking notice. Shoppers are more knowledgeable than ever about the environmental impact of the products that they choose and they are concerned about wasteful packaging. For example, an estimated 5 billion cleaning bottles will be thrown away this year alone. Brands who can address these concerns will have a strategic advantage over those who disregard environmental issues.

Grove Collaborative has embodied sustainability in the products they offer and have recently earned a $1 billion dollar valuation, earning the coveted Unicorn Status. The success of brands like Grove Collective, who make sustainability the cornerstone of their branding, proves that sustainability is becoming the new norm.

Brands Should Heed the E-Commerce Model, Even Offline

 “Stores need to replicate the e-commerce model with the right info at the right time… Customer journeys are like spaghetti – starting at one channel and stringing to the end seamlessly.”

– Doug Stratton, Chief Digital Commerce Officer of The Hershey Company

Brands must eliminate friction at every stage of the consumer journey. Consumers want to be able to go to a company website, order a product and choose to pick-it up in-store or have it delivered. During the process they want everything to work seamlessly. If they have a question, they want to be able to call the store, talk to a store clerk about their order, and have them help with the order without any hiccups.

The consumer experience might be the most important factor for building a successful brand. Companies across the grocery and CPG ecosystem need access to reliable customer feedback to gauge the success of their channels. What your consumers like and dislike should be measured and implemented into new products and marketing strategy. Warning, here comes a shameless plug. Partnering with a research firm who understands the grocery and CPG space is a great way to understand every nuance of your customers’ experiences.

CBD has a Bright Future

“Be prepared to win, get steamrolled, or become an acquisition target.”­

– Bethany Gomez, Managing Director, Brightfield Group

In the CPG industry, cannabidiol (CBD) has been hyped as the next multi-billion-dollar ingredient. The inclusion of CBD in everyday products has exploded, along with consumer interest. New product development, driven by perceived health benefits, presents massive growth opportunities for CPG brands. Some of the biggest opportunities for CBD infusion are in beauty, beverage and pet products. To be successful in these markets, brands should be willing to experiment, take risks, and invest in research to understand the modern cannabis consumer. Relying on guts and guesses will not work.

“Consumers are intrigued by the availability of new cannabis products. For people who are nervous about the psychoactive effects, CBD-only or CBD-dominant products are a great entry into this category. Meanwhile, companies are approaching the marketplace with CBD products first, because they’re not sure if a product that gets people high is right for their brand. Many companies are still in a test and learn phase,” said Adriana Hemans, Director of Marketing, SoapBoxSample.

Recent findings from SoapBoxSample’s CANNApinion poll show that 10% of U.S. grocery shoppers have consumed food or beverages containing hemp in the past month — and that number is likely to grow rapidly with increasing state legalization. Knowing this, big brands are taking a hard look at how they can capitalize on emerging trends in cannabis. “Larger companies have more to lose, so getting on shelves is easier to do for smaller companies while they wait for the FDA to approve CBD as an additive. The big guys are coming in 18 months when the FDA provides more guidance,” stated Bethany Gomez, Managing Director, Brightfield Group.

Now is an exciting time for the grocery and CPG industry. Sustainability concerns, the growth of the cannabis market, and the need to streamline the consumer journey will transform businesses over the coming years. Brands can gain a competitive advantage by working with a research company that provides thought partnership and consultative approaches. This means going beyond measuring trends, to understand the underlying cultural shifts that drive consumer behavior.

Get in touch to learn more – info@soapboxsample.com.

Exploring Multicultural Themes in the Emerging Cannabis Market

By Michael Halberstam, Chairman, ISA

 

Cannabis is having a moment. Increased legalization and growing acceptance are fueling the fastest-growing industry in the U.S. In addition to increasing in size, the market has grown in diversity. Women and Baby Boomers now comprise the fastest-growing segments, challenging assumptions about the “typical” cannabis consumer being young and male.

 

Research suggests that women and Baby Boomers are driving the surge in CBD sales, as both groups seek out relief from anxiety, sleep troubles and pain. Recent findings from SoapBoxSample’s CANNApinion Poll, a bi-monthly survey of 1000 US cannabis consumers, found that over 90% of those who use CBD for pain relief say it is at least somewhat effective. Additionally, 60% of CBD users polled by SoapBoxSample say they would use prescription drugs if they did not use CBD to treat their conditions.

 

Shifting demographics and evolving consumption habits pose challenges for multicultural marketers — and also unique opportunities. To create the marketing messages that feel authentic to this new audience, marketers should embrace generational inclusivity and diverse viewpoints. Marketing campaigns that shatter stereotypes and challenge traditional assumptions about cannabis consumers will break through the noise and deliver sustainable results.

 

Brands can connect with the modern cannabis consumer in a meaningful way by partnering with a research firm that specializes in cannabis consumers. This means going beyond traditional survey research to build detailed profiles of nontraditional cannabis consumer segments. A research company steeped in the cannabis business can help brands understand segments like “the Boomerang” (55+ users returning to cannabis due to legalization), or “the Tourist” (cannabis users who describe a visit to the dispensary as “like going to Disney World.”)

 

Rich data informs the creation of hyper relevant marketing campaigns. Innovative companies will use research to develop the next generation of their products and services by co-creating with their customers – and build a truly customer-centric brand in the process.

 

 

Contact:

Michael Halberstam, Chairman, ISA
Ph. 800-289-1044
halberstam@isacorp.com
www.isacorp.com

In the Cannabis Market, Big Spenders Plan to Be Bigger Spenders

New research from SoapBoxSample reveals cannabis spending will increase even faster than expected, as new products attract big spenders in higher income brackets

 

Consumer spending on cannabis products is on the rise with no signs of slowing. A nation-wide poll conducted by SoapBoxSample uncovered that users intend to spend more on cannabis this year than last year, and even more next year. The study focused on a range of cannabis consumer types, their shopping habits and the motivations behind their purchasing decisions.

How do cannabis consumers currently get their supply? 52% buy their supply from a friend, 37% go to a dispensary and 18% shop online for cannabis. (This data includes people who shop in multiple outlets.) By narrowing in on the preferences of cannabis users with the spendiest habits, SoapBoxSample uncovered some trends unique to this group. Those who spent more than $101 dollars last month use cannabis products to relieve stress (65%), and also for enjoyment (50%), but not necessarily for social reasons (29%).

Not surprisingly, the biggest spenders are likely to buy in dispensaries, where they can browse through an array of different products. An unexpected finding is that 47% of users in this high-spending group rely on recommendations when deciding which dispensary to visit, compared to 32% of those in the lower-spending categories.

While big spenders are throwing down for premium products, they are also looking for deals. 44% of users in the high-spending group look for special offers for new users when choosing a dispensary to visit (compared with 31% of users who spend $51 – $100 per month, and 29% of users who spend $1 – $50).

The survey also revealed that the highest-spending group is looking forward to trying new products. Among respondents who have not tried them, edible baked goods or candies, topical ointments, vaporizers, and cannabis-enhanced beverages are a few of the products likely to be sampled in the next six months.

To predict trends in the cannabis maket, SoapBoxSample also looked at the preferences of users in high income brackets. Those with incomes of $100K+ are more likely to purchase cannabis products through a dispensary than those with lower incomes. Additionally, users who make over $100K per year are more likely to choose vaporizer or edible products that those who make between $50K and $99K.

As new dispensaries pop up, and competition tightens, consumer preferences will determine which locations will survive. SoapBoxSample revealed that when it comes to in-store cannabis buying, everyone wants a good price, but women are more concerned with the friendliness/helpfulness of dispensary employees (59% of females say they look for this quality when choosing a dispensary compared to 45% of males.) Another interesting finding — 20% of men say they look at advertising when choosing a dispensary, compared to 12% of females.

Every generation of dispensary shoppers say they look for price, location, and friendly employees. Baby Boomers are more likely than Gen Xers or Millennials to state that they look for friendly employees when finding a dispensary. Baby Boomers and Gen Xers are more interested in the dispensary location than Millennials.

The survey results presented in this press release are part of a larger study of cannabis users (N=1,003) and non-users (N=502), fielded between June 28, 2018 and July 2, 2018, with a margin of error of +/- 3%.

To learn more about SoapBoxSample’s cannabis research, visit SoapBoxSample.com/cannabis