CBD Food & Beverage Market: Dawn of a New Era in the F&B Sector

As per Inkwood Research, the global CBD food & beverage market is estimated to rise at a CAGR of 24.77% over the forecast period 2024 to 2032. Cannabis is becoming a trending ingredient in various products—from pain medications and skin treatments to food & beverages. 

Globally, the food & beverage industry is on the brink of reaching a new milestone due to evolving consumer attitudes and the growing embrace of CBD products. Private equity firms, start-ups, and established beverage corporations alike are actively engaging in substantial investments within this domain. 

This trend reflects the recognition of CBD’s potential to cater to a shifting consumer landscape, marked by an increasing demand for products offering wellness benefits and alternative consumption experiences. Moreover, regulatory advancements and heightened market awareness are further contributing to the momentum, fostering an environment conducive to the sustained growth of this sector.

CBD Food & Beverage Market - Inkwood Research

CBD Food & Beverage Market | Influence of Cannabis Legalization 

CBD products have grown in popularity in recent years as more nations have legalized marijuana for either medical or recreational purposes. Following cannabis legalization, a number of locations, including Canada, Spain, and a few US states, have seen the commercialization of CBD products, including food and beverage items, thereby boosting the demand for CBD food and beverages.

Thailand became the first nation in Southeast Asia to permit the import and export of cannabis when it approved its use for research and medicinal purposes in 2022. However, the new rule mandates that tetrahydrocannabinol (THC), the primary psychoactive ingredient in cannabis, must be present in less than 0.2% of any goods that use cannabis extracts, including foods and beverages.

Cannabis benefits from the plant’s natural and health-promoting reputation, which contributes to the general consumer demand for natural and health-conscious products. Other consumer packaged goods businesses, such as the nonprescription drug and cosmetics and personal care sectors, have already begun to feel the effects of CBD.

A few examples of CBD-infused foods and beverages available in the US market are the S-Shots cannabis-infused drink from K-Zen Beverages, the Pineapple CBD Chews from Naturebox, and the Honey & Oats CBD Breakfast Cereal from Weetos.

How Investments in the CBD Food & Beverage Industry Accelerate Market Growth

Increased investments have been made in the cannabis food and beverage market in an effort to meet the growing demand for edibles and drinks flavored with cannabis. Examples of this include the $5 million strategic investment made by venture capital firm DCM in mid-2019 in K-Zen Beverages, the joint venture agreement between Molson Coors Canada and Canadian cannabis company HEXO, and Tiger Global Management’s strategic investment in Plus Products, a California-based manufacturer of CBD edibles. 

In order to be ready for cannabis legalization in Canada, Molson Coors is also developing a line of CBD food beverages. The company, which is well-known for its beer products, predicts that Canada’s cannabis drink market could be affected. Furthermore, in August 2019, Aurora Cannabis (ACB) purchased Hempco Food and Fiber, a producer of dietary supplements and goods derived from hemp.

Certain products, like Winabis, which blends wine and cannabis (minus the THC), are currently available on the market. Presently, the Spanish product, which has an ABV of 9.5%, is shipped within Europe. In California, Rebel Coast is offering an alcohol-free cannabis wine, while Keith Villa, the creator of Blue Moon Belgian Wheat, is starting a new company called CERIA Brewing that will produce a nonalcoholic beer with five milligrams of THC.

There exists significant consumer interest in CBD-infused beverages, irrespective of any potential medical benefits. While numerous privately held businesses operate within the CBD food & beverage market, there are still opportunities for investors to participate in entities such as Canopy Growth Corporation (CGC), Alkaline Water Company (WTER), and New Age Beverages Corp (NBEV).

Remaining abreast of recent developments and legislative changes in the cannabis industry is imperative for effectively navigating the investment landscape. A comprehensive investigation and evaluation of potential investments can mitigate risks and optimize returns in the CBD food & beverage market. Diversifying investments across various cannabis-related sectors, including consumer goods, healthcare, and technology, can also aid in risk reduction and maximize growth potential within the industry.

Cannabis: Redesigning the Chocolate and Confectionery Segment 

This spring, there was a notable shift in consumer preference towards gummies, surpassing smokable marijuana flower in popularity. This trend underscores the appeal of emerging CBD product formats, which are attracting a fresh wave of cannabis consumers, particularly those seeking solutions for achieving better sleep quality. 

  • Within the edibles category, substantial year-over-year sales growth was observed, with the sweets subcategory alone reaching a milestone of $2 billion in sales. In 2022, candies constituted the majority of edibles sales, contributing to 73% of the total, with gummies representing a significant portion at 66%, according to data from BDSA
  • In 2022, sales increased in three of the seven edibles subcategories compared to the previous year. Sales of beverages rose by 3%, whereas sales of candies jumped by 11.5%. Product categories such as infused nutrition bars, popsicles, and specific concentrates meant for food applications saw a 414% increase in sales. 
  • A significant majority of US and Canadian edible consumers—33%and 31%, respectively—suggest that gummies are their preferred edible product. 18% of US and Canadian customers favored baked goods, which were the second most popular edible product category.
  • Nevertheless, from 2021, four additional food categories had decreased year over year. Pills decreased by 6%, but chocolates fell 21%. Foods that are infused—baked goods, honey, ice cream, popcorn, dried fruit, nuts, spreads, and syrups—have decreased by 23%. Butter, cooking oils, infused sugar, and infused sauces are among the items in the culinary sector, which saw a 44% decline.
  • In 2020, Kiva Confections launched the Lost Farm line of confections, which included chews and gummies produced with live resin. Kiva unveiled two products using solventless live rosin toward the end of 2022: Cherry Lime x GMO Live Rosin Chews and Yuzu Fizz x Sour Dream Live Rosin Gummies.

In October, Wyld unveiled its Good Tide line of vegan gummies, crafted from solventless hash rosin. These gummies are formulated to deliver a comprehensive experience, leveraging the synergistic interaction between terpenes, trace cannabinoids present in the rosin, and tropical fruit constituents. The Good Tide lineup boasts flavors such as Pineapple, Guava, and Mango, catering to diverse consumer preferences within the CBD product market.

CBD Infused Beverages – A Rapidly-Rising Segment within the CBD Food & Beverage Market

Prominent cannabis brands are primarily focusing on CBD-infused beverages, especially as a replacement for carbonated drinks. Zero Proof Squeeze, a THC-infused drink enhancer product, was introduced by Curaleaf in hopes of expanding its distribution whenever it is legally allowed to do so in more states. The firm would soon be releasing powder products to mix into drinks and RTD canned beverages.

The alcohol-adjacent category is growing quickly as more individuals become interested in using alcohol in moderation and minimizing its effects. Alcohol adjacencies have the potential to improve mood or serve functional purposes; many of them contain substances like adaptogens, nootropics, and CBD. These goods cater to health-conscious consumers by emphasizing the feelings that their contents will evoke in the user. They are also perceived as a substitute for typical alcohol-based gatherings.

Despite being a nascent market, a variety of CBD-infused beverages have already made their debut, including Recess, a sparkling water infused with hemp and adaptogens; HOP WTR, a non-alcoholic sparkling water infused with hops, adaptogens, and nootropics; and Kin Euphorics, a product infused with nootropics, botanicals, and adaptogens, co-founded by supermodel Bella Hadid. These CBD products offer different mood-enhancing effects depending on the intended occasion, claiming benefits such as uplifted mood, calmness, enhanced focus, and increased sociability.

The emergence of alcohol-adjacent products aligns with beverage companies’ increasing flexibility and adaptability in exploring non-traditional product categories. The idea of venturing into previously unexplored market segments as a means of innovation has become less disruptive, particularly with the recent diversification efforts of beverage and beer companies traditionally focused on core products.

The concept of functional beverages, emphasizing the impact of drinks on consumer mood, represents a novel approach to meeting the needs of individuals experiencing stress. Despite being designed for alcohol-free occasions, these CBD-infused beverages often mimic the effects of alcohol. Product innovation in this space aims to identify naturally occurring compounds that, when combined with appealing flavor profiles, can elicit mood-altering effects similar to those of alcoholic beverages.

Harmonic Woman CBD has introduced a new line of CBD-infused beverages tailored to empower women to microdose and indulge in guilt-free enjoyment. These beverages are delicately flavored with a blend of fruits, flowers, and all-natural ingredients, boasting a classic rose essence without the addition of sugar or calories. The refreshing carbonated finish of Harmonic Woman beverages adds to their appeal, providing consumers with a cool and satisfying drinking experience.

In addition to its beverage line, Harmonic Woman CBD offers a novel coffee substitute named ‘Rise,’ designed to alleviate the need for energy drinks and caffeine while avoiding the mid-afternoon slump. ‘Rise’ offers customers the stimulating effects of caffeine without the accompanying crash, providing a sustainable energy boost throughout the day.

The success of the CBD Food and Beverages market hinges on educating consumers about these products, their ingredients, and the potential mood-enhancing effects they offer. Despite a current lack of consumer understanding regarding alcohol-adjacent products, the allure of these innovative offerings in the beverage industry remains strong, indicating promising growth potential for Harmonic Woman CBD and similar ventures.

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Navigating the Regulatory Terrain: Establishing Clarity for CBD Food & Beverage Market

While CBD food and beverage marketers view the industry as lucrative, various obstacles, such as CBD product laws and marketing challenges, persist. To gain insight into usage patterns, the FDA convened a meeting in May 2019, gathering testimony from diverse stakeholders, including consumers, cultivators, product developers, marketers, retailers, and health professionals. Although the FDA is expected to release guidelines on CBD products later this month, a significant portion of the sector remains unregulated, with varying state-by-state rules.

Significant research gaps persist, and as the FDA evaluates the current regulatory landscape, new legislation aimed at safeguarding user well-being is anticipated. Additionally, public acceptance of cannabis as a food ingredient will likely require time. However, given consumer interest, CBD presents substantial growth potential, necessitating further investigation in the coming years.

Regarding CBD-infused products, ensuring dosage accuracy primarily hinges on trust rather than safety concerns. The World Health Organization’s Expert Committee on Drug Dependence notes that slight deviations in CBD dosage are unlikely to pose harm, considering CBD’s demonstrated lack of abuse or dependence potential and its generally well-tolerated nature with a favorable safety profile.

By Rasika Kambli

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    Cannabidiol (CBD) infused beverages consist of concoctions made with CBD extracts, such as oil. Their purpose is to offer a convenient and enjoyable method for consuming CBD. These beverages are available in a variety of formats, including teas, sparkling water, and sports drinks.

    Since drinks and other CBD products are currently not properly regulated, the market expansion may be hampered by mislabeled goods, possible THC presence, and limited data proving the health advantages of CBD alone.