Edibles and Drinkables Leading Cannabis Market in 2020

marketing Feb 27, 2020

A recent report from Mintel, a global and award-winning provider of Market Research, shared some interesting data from research conducted on the Canadian cannabis market.

The research shows that the impact of legalization has been tremendous and that Canada has a substantial population of users (59%) and also potential users (32%) that are open to trying it.

From a marketing perspective, the most popular format (66%), non-users stated that they're open to using cannabis, is as an edible or drinkable product.

Scott Stewart, Senior Research Analyst for Mintel stated that" Legalized recreational cannabis has certainly had one of the greatest impacts on the Canadian market in the last decade. After just one year, the effects of this industry are already far-reaching - from food and drink to insurance to tourism and more - and additional markets will begin to experience the ripple effects of the legalization of cannabis this year. For this reason, it is important for all brands to develop a better understanding of cannabis and the consumer behaviours and attitudes surrounding it."

While sales for cannabis in Canada were below expectations in 2019, the edible and drinkable format is viewed as a great way to introduce and educate cannabis to new users and essential for the market to continue to grow in 2020. Education will help to eliminate many of the barriers that stand between non-users trying a product with cannabis in it. 

Stewart added," The key to future growth for many consumer industries will be to convert more of the consumers who are open to but not current users of cannabis; their hesitance to try cannabis was a contributor to the relatively low sales in 2019, but the legalization of edibles and drinkables in October 2019 will play a major role in 2020's success. Edibles and drinkables can be a great introductory way for new users to familiarize themselves with cannabis and better understand the cannabis experience, potentially leading to using other forms of the product." However, Stewart cautions that "Our research shows that many Canadians view cannabis as a very complex and intimidating product and the lack of understanding leads many to avoid it entirely. Brands can navigate this by using online platforms and in-store employees to help educate consumers about cannabis. Strict laws around marketing cannabis mean that brands have to be very careful about their approach, but using factual statements to help educate and familiarize potential consumers with cannabis is a good way of establishing a trusted position in the market."

Health and wellness hold the key to sustained growth for the industry. Marketers should note that the majority of cannabis consumers use cannabis-related products to relax (62%). In comparison (54%) use it to relieve stress or anxiety, (42%) use it to improve sleep, and (39%) use it for their mood.

Tourism and food and beverage industries look to be big winners as the cannabis market expands. A third of cannabis users (36%) are interested in cannabis-themed vacations, and 44% of travelers like to experience something new when they travel. Trying cannabis could provide that new experience that they're looking for. Stewart said, "There are a number of opportunities for other industries to carve out a share of the cannabis market - whether that's in an overt or more subtle way. The current challenge for companies and brands in the tourism industry entering the cannabis market is that many tourist destinations still have relatively few retail options. That is expected to change, and we suspect the tourism industry will begin to attract more and more cannabis customers as the recreational cannabis market matures."

Food and beverage companies are encouraged to include messaging that focuses on "having a case of the munchies" in their marketing messaging since a vast majority of users (83%) report that they eat more food while they use cannabis. Stewart concluded, "In all likelihood, the industry that can benefit the most from the legalization of cannabis – besides the cannabis industry itself – is food and drink. Our research shows that consumers find themselves eating more while using cannabis, creating sales opportunities for food and drink manufacturers, companies, and brands without the need to actually create edible or drinkable cannabis products. By incorporating cannabis-related messaging in marketing campaigns and on product packaging, food and drink brands can play in the market without making huge investments in research and development and new product innovation.”

Source: Mintel


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