There was a common theme during this year’s Natural Products Expo West: CBD. Brands showcased their product lines and attracted many conference-goers with their free samples. The conference boasts one of the largest audiences for the CPG industry and hosts tens of thousands of people amongst a seemingly endless sea of retailers of varying size each year.
Zooming out, does this reflect trends in the mainstream market? Indeed it does. More and more retailers – including larger chains – are announcing both in-house products and partnerships with CBD brands. Recently, Ulta Cosmetics announced it will be carrying Cannuka CBD products, a skin care line that combines CBD and manuka honey. This is no small leap for CBD as Ulta continues to hit double-digit annual revenue growth. This announcement comes after several other large-scale retailers and manufacturers announced that they would be producing or carrying CBD products (or expressed interest in pursuing them), including – but not limited to:
Neiman Marcus - Since January of 2019, Neiman Marcus has been carrying a wide range of CBD products in its stores from some of the industry's top brands.
Sephora - The multinational personal care and beauty chain has launched curated section in its stores dedicated entirely to CBD.
Barney’s - With the launch of "The High End", Barney's has created a luxury cannabis lifestyle shop that aligns with its core customer base.
DSW - Kiosks that feature CBD products will be stationed in nearly 100 DSW stores.
Whole Foods – They have been quite vocal about the impact hemp and CBD will have on the food industry but have not announced any official entrance into the space.
Target – They briefly sold CBD oil in their online store which gained national attention.
Coca-Cola – They have expressed interest in CBD-infused beverages with Aurora.
Anheuser Busch InBev - Though, this was in Canada, and CBD as well as cannabis.
Holland & Barrett - Outside of the United States, CBD is rapidly growing with this retailer's launch of an affordable line of skincare.
CVS – The first large scale retailer to announce CBD offerings. They launched a pilot program in 800 stores across the U.S.
Walgreens – Shortly after CVS, Walgreens announced a large pilot program in 1,500 U.S. stores.
Unilever - Schmidt’s Naturals, which was acquired by Unilever in December 2017, will release a line of CBD-infused deodorant products.
This is the tip of the iceberg. We expect large-scale entities to publicly enter the CBD market at a faster rate now that these big names have expressed serious interest, and because the potential market growth is staggering. In fact, we estimate that CBD beauty alone will hit nearly $290 million in 2019. This does not account for large sectors in the food, beverage, and pet industries.
What do retailers need to consider as they plan for CBD?
Due to the wide range of CBD companies that are in the marketplace today, it is paramount that retailers be attentive to the legitimacy, product quality and safety offered by any CBD brands they intend to partner with. Additionally, retailers should align themselves with CBD companies whose positioning and messaging fit with those of their core consumers, which requires a deep understanding of the CBD marketplace - from a regulatory and market perspective all the way down to an understanding of the end-consumer.
Last updated: March 2019