Supermarkets are paying increasing attention to the market for cannabidiol (CBD) products as consumer demand for these items continues to climb. Given the market potential for CBD products, that attention is well-warranted for grocery and other retailers, according to Rick Maturo, associate director of client services for the cannabis practice at Nielsen.
For 2020, Nielsen projects that the hemp-derived CBD market could reach the $2.5 billion mark — or more — in the United States. The consumer market researcher notes that its estimate is conservative, taking into account possible regulatory speed bumps in the CBD marketplace.
A naturally occurring, non-intoxicating compound in hemp plants, CBD has become a popular remedy for a range of everyday health issues. But even as various CBD offerings — mainly topical products — have streamed into stores, many retailers remain skittish about the regulatory framework regarding the sale, labeling and safety of hemp-containing products.
The federal government reclassified cannabis in December 2018, removing hemp from the list of controlled substances. Still, the Food and Drug Administration prohibits CBD from being added to food or marketed as a dietary supplement. Strong consumer demand pushed Congress earlier this year to jump-start legislation to allow hemp-based CBD in food and supplements. Eventually, that could change FDA regulations and open the floodgates for more CBD products in retail stores.
“For supermarkets and other food retailers, CBD really is a pretty attractive consideration,” Maturo said. “Number one, it definitely has the ability to drive new customers to the store, so you can steal share from competitors and get more brands to come into the store. It also has the ability to increase the basket for existing customers. So someone coming into your store and spending ‘X’ number of dollars could be spending $30 or $40 more if you’re stocking some of these CBD products.”