Prohibition Partners, has released a new report indicating that all segments of the beverage industry are now embracing cannabis-infused drinks, with a clear potential for a growing consumer base as 16% of people who have not yet consumed cannabis-infused drinks say they will probably do so within the next 12 months. They estimate the global cannabis drinks market will be worth US$1.82 billion by the end of 2020 and that number will be infused by those looking for relief from the current COVID-19 pandemic.
“When facing an economic crisis, consumers will be more willing to buy less costly luxury goods. The underlying assumption is that consumers will buy luxury goods even if there is a crisis, but that these goods will be more budget conscious luxury. Cannabis infused drinks are an ideal example of this and Prohibition Partners has found that cannabis products are expected to benefit from this period of self-isolation,“ said Stephen Murphy, Managing Director of Prohibition Partners.
Consumers are stockpiling cannabis products in a bid to ensure that their supplies are secured indefinitely. As part of the “home entertainment line-up” in regions where cannabis is legal, beverages can expect to benefit from this trend in hard times to watch more television and spend more on little extras for their in-home leisure. The current stressors of 2020 have already proven to be a boost to cannabis-based products. Despite the current inevitable economic downturn, cannabis is still set to record impressive growth as consumers look for products to help them relax and de-stress and as the most popular format, drinks will likely be the greatest beneficiary.
Consumer demand is strong; the report finds that one in four consumers or would-be consumers of other cannabinoid-based products would be willing to try cannabis-infused drinks, and 28% of people who have already tried infused beverage consumers say they intend to buy more infused consumer goods in the coming three months.
“We are on the cusp of a drinks revolution, for hundreds of years, legal socializing has either involved alcohol, or sobriety; outside of caffeine and nicotine, ultimately you either got drunk, or you didn’t. The emerging cannabis drinks market is one of the most exciting sectors within the beverage industry; cannabis infusion will truly disrupt the drinks market and become a highly lucrative source of revenue for those who embrace it,” said Murphy.
The cannabis beverage industry has been further driven by COVID-19 shining a spotlight on respiratory illness and lung disease in an unprecedented way in how people choose to consume cannabis. People are avoiding smoking and vaping in favor of other formats such as edibles, including drinks. Furthermore, governments throughout the globe will be searching for ways to bolster flagging economies and cannabis-infused beverages have the potential to deliver.
Prohibition Partners has also found that working parents have been particularly responsive to the beverages; 2020 has seen them take on the roles of worker, teacher and parent all at once – their wish to reduce stress is evidenced by the fact that almost 70% of people who reported that they are likely to buy more infused products in the coming three months, have children under the age of 18. This indicates that parents may need an outlet to provide a form of escapism or herbal self-medication during the crisis. This is likely to also be a key reason that more than half of those who intend to purchase more cannabis-infused drinks in the coming three months are ages 25–44.
Claire Birks, Prohibition Partners Senior Analyst says “The global drinks market may be large but overall industry growth is slow with some analysts forecasting annual growth at around just 3%. Our research has found that cannabis-drinks, however, are poised for much bigger growth and point towards an almost 45% compound annual growth rate for the cannabis-infused segment of the drinks industry.”
Federal US Government Statistics from April show a rise in stress-drinking directly resulting from the global pandemic and this has been mirrored across much of the world. Furthermore, a leading professor of Health at the University of Boston has warned that a spike in alcohol use disorders is on its way owing to a shift in alcohol purchase and consumption habits during the crisis.
The emerging cannabis drinks segment, however, could lessen that impact. Consumer research conducted by Prohibition Partners has found that four in 10 consumers who have or intend to purchase cannabinoid-infused beverages do so as a replacement for other intoxicating substances.
How Cannabis is Disrupting Drinks Globally, is set to be discussed at the online global event Prohibition Partners LIVE – set to run in place of the annual Cannabis Europa on June 22-23.