KANSAS CITY — Few prospective food ingredients have generated as much hype as cannabidiol (C.B.D.). Industry and consumer interest are high despite skimpy scientific research and regulatory hurdles at the federal, state and local levels. Interest in C.B.D. will intensify but will be tempered by a nascent supply chain, the need for product developers to learn how to work with the ingredient and a need for actual clinical data that demonstrate health benefits. Adding pressure on the food industry will be competition from supplement, pharmaceutical and personal care companies.
In a small way, hints about the future for C.B.D. as a food and beverage ingredient may be seen in the industry’s experience with stevia. Declared Generally Recognized as Safe by the Food and Drug Administration in late 2008, a rush of new product introductions followed with companies, both large and small, anxious to tap into prospective consumer interest in the natural sweetener. Growing pains followed, with many early products failing to meet consumer expectations, mostly related to taste. It took several years for ingredient suppliers and product developers to understand the nuances of the ingredient, create new forms of stevia and bring successful products to market.
Success with cannabidiol also likely will require a nuanced approach, but the growth potential of C.B.D. dwarfs that of stevia. Grandview Research, Inc. forecasts the stevia market will generate sales of $553.7 million by 2024. In contrast, the investment research firm Cowen Inc. forecasts the C.B.D. market will reach $16 billion in retail sales by 2025. Of this total, nutraceuticals are forecast to generate $6.4 billion in sales while food, beverage, beauty and vapor products combined will see $1.25 billion in sales.
The market for C.B.D. is currently in a gold-rush phase with early adopters capitalizing on hype and regulatory loopholes.
A recent consumer survey by High Yield Insights, a market research company focusing on the cannabis market, measured consumer interest in C.B.D. The survey included national representation of 2,000 U.S. adults ages 21 and older, 1,500 of whom reported using C.B.D. products in the previous three months and 500 who reported not using C.B.D. products.
Those consumers most interested in the compound were 35 years or older (64 per cent), female (56 per cent) and with a college education (79 per cent). For new consumers, key motivators included easier access to products, availability of unbiased research and a doctor’s recommendation. Potential users indicated interest in chocolates and baked foods formulated with C.B.D. in addition to over-the-counter supplements such as pills and capsules.
Despite consumer interest in C.B.D., many are confused about its legal status, according to High Yield Insights. Of greater concern is confusion around its actual health benefits. Most clinical research has focused on concentrated dosages only appropriate for pharmaceutical applications. While there is data showing no adverse effects at oral dosages up to 1,500 mg per day, the benefits remain murky and will require investment in clinical research to better understand.
The market for C.B.D. is currently in a gold-rush phase with early adopters capitalizing on hype and regulatory loopholes. While they may gain attention in the short term, their prospects are dim. This category is evolving rapidly and will require a significant investment in infrastructure and research. As with stevia, those companies that take the long view will be best positioned to succeed.