In a presentation titled “From CBD to Alternative Proteins: What do emerging consumer trends mean for grocery industry?” that took place during the FMI Midwinter Conference 2020, researchers from the International Research Institute (IRI) brought attention to ever-growing acceptance of CBD and plant-based alternatives in the U.S.

“Plant-based foods are now mainstream. Protein alternatives Beyond and Impossible are exploding. Major retailers are increasing their plant-based offerings,” – said Tim Grzebinski, principal, Client Insights, IRI.

The related survey shows that health and wellness is the leading driver of plant-based success, with 73% of consumers citing that as the reason for purchasing plant-based. Another key factor behind purchases was diet, cited by just under half of all respondents (47%). Vegan and dairy-free diets led consumers’ special diet needs influencing their purchase of plant-based alternatives, at 44% and 41%, respectively.

“Plant-based milks are penetrating almost 40% of households, and oat milk is growing rapidly. Meanwhile, meat substitutes are at 15% penetration, and Beyond Meat has grown 134% over a year ago,” – Grzebinski said, while adding that plant alternatives owe much of their market success to the absence of negatives, as they are non-GMO, non-dairy, non-gluten, etc.

The acceptance of cannabinoids, or CBDs, has been growing no less rapidly:

“The greatest opportunity for the industry today is to reap the benefits of legal cannabis,” – said Grzebinski’s colleague Larry Levin, EVP, Market & Shopper Intelligence, IRI, adding that “we have not seen this kind of disruption in our industry…ever.”

He also specified that “it’s no longer just a western United States phenomenon as more states legalize it”. According to survey data from BDS Analytics Consumer Research, 16% of adults aged 21 and over have consumed hemp-derived products in the past six months. In states where cannabis is fully legal 38% of adults consume cannabis and another 29% have nothing against consuming it.

The researchers point out that the majority of U.S. adults support the idea of legalizing marijuana on the countrywide level with 80% of those surveyed agreeing there should be at least some form of legal marijuana usage, and another 64% believing that marijuana has medical benefits.

Given this growing consumer acceptance and CBD availability, Levin predicts that the total U.S. cannabinoid market will reach $45 billion by 2024. As for now, the consumption of hemp-derived CBD products is predominantly health- and wellness-related. The consumers tend to turn to marijuana as a means of treating or managing health problems and alternatives to a number of prescribed drugs.

Major grocery retailers, such as Walmart or Kroger, seize the opportunity by expanding the assortment of CBD-based health and wellness products, such as supplements, external pain, sleep, skincare, and beverages. The current market share of CBD product retail is constantly growing. The analysts believe that by 2024 now dominant dispensary sales will drop to 26% of sales, while e-commerce (18%), pharmacy (11%), grocery (9%) and mass retail (9%) will all increase their share.   

Whatever the potential benefits of this disruptive market trend, consumers are currently lacking adequate education in the field.  According to Levin, only 22% of the U.S. adults know what cannabinoids are and can articulate the definition.

“Cannabis will be among the most disruptive trends to hit CPG in decades. Retailers and manufacturers have an opportunity to capitalize on burgeoning revenue stream with unique innovation and consumer marketing,” – he concluded, however.