A few years after the novel Coronavirus made its way worldwide, the CBD market is now gaining a clearer understanding of how its operations have been affected. The pandemic resulted in the closure of many businesses. It was a tricky time for the industry, which had already grappled with inconsistencies in the law and rampant misleading information.
With companies hoping to start or return to business and conquer these challenges, one question arises: How has the pandemic affected the CBD market? There are several ways the pandemic affected the CBD market. This article aims to determine Covid-19’s impact on the CBD market to help you overcome these challenges in the future. So, let’s get started.
Lower Prices of CBD Products
Nearly a third of CBD consumers come from middle-class households, a significant increase from 2019. Because of this and the high unemployment rates in this category, there was an elevated price sensitivity. Consumers consider price the second most important product attribute when deciding on CBD products. They also want affordable products that deliver effective relief, like cbd vape pen.
Data from Hemp Benchmarks show that raw hemp costs dropped by 79% because of increased supply and improvements in extraction equipment. Manufacturers passed on those savings to consumers. Brightfield Group cited several major manufacturers, including Global Widget and Charlotte’s Web, which offered regular discounts on their websites. Brightfield Group said the lower prices attracted new consumers to the CBD market and made them loyal customers.
Product Innovations
Product innovation was another significant COVID-19 response. Besides adding new flavors, Brightfield Group points out that companies invested in research and development to introduce new products that include minor cannabinoids, such as CBG and CBN, and CBD, to offer additional benefits.
There was a growing interest in CBD products that contained immune system-boosting ingredients such as echinacea, elderberry, and Vitamin C. There were also mentions of full-spectrum cannabis products containing minor cannabinoids, specifically CBG and CBN.
Combined with terpenes, cannabinoids and terpenoids produce the ‘entourage effect,’ The different compounds work synergistically to enhance each other’s effects. Brightfield Group predicts that the CBD industry’s focus on innovation will give it an edge against other CPG companies focusing on core brands to streamline supply chains.
COVID-19’s Impact on CBD Food Businesses
COVID-19 has prompted consumers to purchase online wellness products to prevent and manage its symptoms. There has been a massive increase in the sale of food products that claim to boost autoimmunity and relieve stress. Food businesses in the CBD, including those operating FBOs, should rejoice in this news.
Consumers looking for alternatives are increasingly using CBD products rather than modern pharmaceuticals to treat conditions such as anxiety, chronic pain, inflammation, insomnia, and other life pressures during the pandemic. Food products and oils are the two most popular CBD products in the European market; topicals and ingestibles make up the rest. CBD food products are already widely available, including bakery, confectionery, and beverages.
Changing Consumer Behavior
A widespread move to online across multiple fronts characterized the impact of the Covid-19 pandemic, from events to sales. A Brightfield report found that nearly half of CBD consumers moved online to buy CBD because of the pandemic. Between Q1 and Q2 of 2020, online CBD purchases increased by 61%.
Also, during this time, CBD products became more popular among consumers. In Q2 of 2020, more than half of all CBD users said they had been using it for at least a year. This number increased by 13% between Q1 and Q2 of 2020. According to the report, CBD usage among consumers rose by 6% from Q1 to Q2.
Edible products saw a significant shift in consumer preferences as well. The report shows that 88% more CBD users used CBD gummies and candy in Q2 than Q1. The number of consumers who reported using other edibles, including baked goods and beverages, increased five-fold over this period.
New Offerings by CBD Companies
COVID-19 is helping companies test the waters of a developing market with new purchasing methods and products. Many CBD retailers take a cue from legal cannabis dispensaries in states that allow them to stay open and offer curbside and delivery services. Companies with no ecommerce platform gained sales because of this delivery model.
Innovative companies met customers where they were. Cornbread Hemp is an example of an established manufacturer of CBD products based in Kentucky, which sells its products to hundreds of retailers nationwide. In response to stay-at-home mandates, it shut down some of its retailers and created incentives for those who purchased directly through its websites. Their free shipping policy and payment plan option helped people buy their products during challenging economic times.
Some companies made a temporary switch to making entirely new CBD products. CBD companies manufactured hand sanitizer to satisfy the growing demand, considering the spreading pandemic. They also wanted to keep employees busy and avoid laying off staff.
Final Thoughts
The Covid-19 pandemic has affected the CBD market in various ways. Indeed, the CBD market is not immune to such economic difficulties, and it will probably continue to face them for some time to come. However, CBD is a substance with extraordinary effects on health and well-being in hundreds of millions of people worldwide. Because of this, neither a recession nor a pandemic will completely diminish this dynamic and growing market.
Also read: Can CBD help with work stress?