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03/13/2020

CBD: a consumer and CPG perspective

Dan Ochwat
Executive Editor
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The legal U.S. CBD market could surpass $24 billion in annual sales by 2025, according to a report from Brightfield Group, a research firm with expertise on the category, and private label suppliers are heavy into it, offering products for retailers to introduce as private brand items. Store Brands’ recent report showcased a few of these players.

However, among the potential, perhaps retailers are exercising some caution?

Surveying marketers at major consumer goods companies, a Trends study by sister publication Path to Purchase IQ found that CBD was named the “least valuable” topic of interest to their organizations in 2020 among 13 identified topics.

It's a little striking to see a reaction like this when there's been so much talk of CBD's potential. Perhaps CPGs are not interested in CBD because private label is entering the market so strongly, or maybe there’s little interest because retailers are showing little interest?

There also is a possibility that retailers are cautious due to a lack of clarity from the federal level, particularly the Food and Drug Administration. A recent report to Congress from the FDA suggested that the agency would continue to delay explicit action until it had more conclusive answers on CBD's safety and toxicity — a position that industry trade group the Council for Responsible Nutrition balked at. The organization said the report, "amounts to more bureaucratic can-kicking, and Congress should recognize it as such and take action now to declare CBD a lawful dietary ingredient. That will direct FDA to allow CBD in dietary supplements and impose that significant regulatory framework on these products."

Overall, the CBD situation remains murky.. To read more on how CPGs are reacting to CBD, how retailers are approaching the category and what CBD means to consumers, checkout the magazine’s feature here.