- CBD sales overall are decreasing, outside of the pet channel. This is likely caused by increased interest in certain crossover categories, such as functional beverages that have seen a surge in focusing on functions beyond just energy. Sleep and relaxation beverages are looking at CBD as either a main or complimenting functional ingredient.
- “While CBD has been used in skincare for several years, its prevalence in these products has gone down significantly as other ingredients have entered the market.”
- “There was this thought that CBD should be added everywhere and that was a mistake, as seen by mostly negative sales. That being said, for companies that can master products with high quality hemp and focus on building consumer trust, there is room for major category leaders to emerge”
The CBD industry has proven to be the fastest-growing, with sales averaging $3.5 billion in 2021. As a whole, Grand View Research reported that the U.S. cannabis market is predicted to reach $40 billion by 2023 due largely to increased legalization of cannabis, which is driving the market growth. The market is expected to expand at a CAGR of 15 percent over the forecast period.
Brands Utilizing CBD as a Functional Ingredient
With trends shifting toward CBD being used as a functional ingredient, cannabidiol is growing in several categories, including shelf stable water, face care, pain relieving topicals, and sleep supplements. SPINS, a leading wellness-focused data company, offers an inside look into the growth of CBD as a functional ingredient, analyzing growth in sales compared over the last two years.
“CBD as a functional ingredient is increasing in certain pockets, but CBD sales overall are decreasing, outside of the pet channel. This is likely caused by increased interest in certain crossover categories, such as functional beverages that have seen a surge in focusing on functions beyond just energy,” Haleigh Resetar, Corporate Communications Specialist at SPINS, said. “Sleep and relaxation beverages are looking at CBD as either a main or complimenting functional ingredient.”
An Inside Look Into CBD’s Growth
Over the last two years, here are some of the major sales growth spurts in CBD as a functional ingredient from SPINS’ data:
- Shelf-stable water with CBD saw a 142% increase, and a $6.7 million change
- Face care with CBD increased by 31%, and changed by $266,000
- Condition-specific supplement formulas containing CBD saw an increase of 26%, and a $500,000 change
- CBD sleep supplements increased by 34%, and saw a $549,000 change
- CBD shelf-stable soda sweetener saw a 45% increase, and a $197,000 change
- CBD pain relieving creams, ointments, and gels saw a 43% increase, and a $1.2 million change
- Pet CBD vitamins and supplements saw a 26% increase, and a $1.9 million change
- CBD overall saw a 16% increase, and a $1.3 million change
“While CBD has been used in skincare for several years, its prevalence in these products has gone down significantly as other ingredients have entered the market,” Resetar said. “Beverages have been, and retain, the top product infused with CBD. Beverages overall, both shelf stable and refrigerated, are up 11 percent. Shoppers are turning to these products as a quick and easy way to consume their vitamins, supplements, and other functional ingredients to get them through the day and reach their daily goals.”
These are the growth in numbers for CBD beverages specifically:
- Shelf-stable water: $12 million total revenue, and 29% growth
- Shelf-stable functional beverages: $3 million total revenue, and 8% growth
- Shelf-stable tea and coffee ready-to-drink: $577,000 total revenue, and 43% growth
What the Future of CBD Looks Like
CBD has experienced exponential growth in the last few years, so it is impossible to maintain that same level of growth as we continue to move forward, resulting in a slight decline. Even with this drop, CBD products were still being purchased and innovation was spurring, just not at the same rate as before as other ingredients entered the market, according to Resetar.
Cannabidiol remains a highly used sleep aid and mood support supplement, even with other ingredients in that category. Similar to skincare a few years ago, CBD usage in beverages is bound to hit a plateau, but it is an established and researched ingredient that will continue to find its way across aisles in other categories, including snacking (wellness bars, cookies, and crackers).
“I believe that we will continue to see CBD find pockets of success over the next 12 months. There was this thought that CBD should be added everywhere and that was a mistake, as seen by mostly negative sales. That being said, for companies that can master products with high quality hemp and focus on building consumer trust, there is room for major category leaders to emerge,” Resetar said.