As consumer preferences change, the road to failure in the beverage industry is paved with sugar. But cannabis holds a new opportunity for drink makers looking for the next trend in consumer tastes, especially as legalization spreads among states and new marijuana users look for more social ways to consume.

"Beverages are the most exciting consumer packaged good out there with incredible growth potential," says Erik Knutson, founder and CEO of cannabis-infused drink manufacturer Keef Brands, who was in New York City last week for the beverage-industry BevNet conference. "I think cannabis beverages are the new soda."

In 2018, soda sales have hit a 30-year low as consumers flee for healthier drinks, according to Bloomberg. Meanwhile, cannabis beverage sales, which hit $35.6 million in 2017 across California, Colorado, Oregon, and Washington, are on the rise. In Colorado alone, beverage sales increased 11 percent from 2016 to 2017, and sales are already up 12 percent in the first quarter of 2018, according to marijuana data firm BDS Analytics.

Companies in the cannabis industry are trying it all--from non-alcoholic wine infused with THC to THC cold brew coffee. "I think eventually the drinks sector will be the largest edibles sector," says Knutson. "People don't get together and eat slices of a brownie. It's not social. Sipping on drinks is what we know--you get together and you drink."

Lauren Rudick, a partner at cannabis-focused law firm Hiller, who was on a BevNet panel with Knutson on Thursday, says cannabidiol (CBD)--the non-psychoactive compound in cannabis--could become an even bigger mainstream ingredient for the beverage industry compared with tetrahydrocannabinol (THC), which is responsible for marijuana's high.

Hiller's Rudick believes CBD will become the new calcium or vitamin C. "It's the perfect wellness product, and there are going to be many CBD-fortified foods and beverages," says Rudick, of the cannabis compound associated with anti-inflammation, pain relief, and other benefits. Keef Brands' Knutson says he is already working with six large beverage manufacturers to formulate drinks with CBD for "the mass market."

Meanwhile, beverage behemoths are already positioning themselves for the cannabis craze. Last year, Constellation Brands, which makes Corona, Svedka, and other alcoholic beverages, bought a 9.9 percent stake in Canadian cannabis producer Canopy Growth for $191 million, and now has plans to develop THC-infused drinks. In March, the head brewmaster of Blue Moon, owned by MillerCoors, announced that he quit and is launching non-alcoholic THC-infused beer company Ceria Beverages. Even wine and spirit distributor Southern Glazer made a deal to have its Canadian arm distribute cannabis products for a Canadian marijuana company. Laguintas, the California beer company, has partnered with cannabis concentrate maker AbsoluteXtracts to add hops to a vape pen.

Stuart Dimson, the founder of small sparkling probiotic drink maker Doctor D's and another BevNet attendee, says he is considering jumping in too. "CBD plays right into the health-conscious probiotic-drinking crowd," says Dimson, whose products are sold in just under 2,000 stores throughout the U.S. "CBD is the real healer; it's the new hot ingredient."   

 

 

Published on: Jun 11, 2018