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US: Pandemic cuts sales of hemp retailers by 75%

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Photo: DR

Hemp food and beverage sales in the United States of America (USA) are down 75% this year compared to the same period in 2019, according to New Hope Network/Nutrition Business Journal.

Even so, companies should not give up on this business area, according to the speakers at the Virtual Meeting of Colectivo do Cânhamo, held last December 9, as there are opportunities for growth in the beverage category.

During the COVID-19 pandemic, retail purchases fell across all industries, as did sales in the restaurant industry, said Claire Morton Reynolds, senior analyst for the food industry. New Hope Network/Nutrition Business Journal, based in Boulder, Colorado. The majority of hemp/CBD (Cannabidiol) food and beverage sales occur in convenience stores and retail, according to Justin Singer, CEO and co-founder of Caliper Foods, Commerce City, Colorado.

But beyond that, federal regulations also come into play. Retailers are hesitant to sell CBD foods and beverages as the Food and Drug Administration (FDA) determined that CBD derived from the full use of the hemp plant cannot legally be used in foods, beverages and dietary supplements as CBD has only been approved for use in the drug Epidiolex. “Sometimes it's possible to label (a food or drink) just hemp and not CBD or THC, and put it in a wider range of retailers,” Singer said. The speaker further said he sees opportunities for hemp/CBD in several categories: ready-to-drink drinks, bars, drink mixes, recovery products, ice cream and coffee.

CBD in drinks and food

“I think ready-to-drink beverages are an untapped category,” Singer said. “The idea that this segment has reached its limit in independent grocery stores and convenience stores makes me want to laugh. This is a great opportunity that is still waiting for investment”.

Ari Sherman, president and co-founder of Evo Hemp, in Boulder, noted that hemp/CBD can be an excellent alternative to alcohol. Product categories such as vitamins and minerals are another option, giving cereals and food bars as examples.

Singer also argued that companies need research and development and experimentation to get the right flavor out of products and a sufficiently long shelf life. “CBD is in fact the most bitter substance any food scientist has ever encountered, even more bitter than caffeine,” he said.

Lack of experience working with hemp

“This is all new science, the way the full spectrum plant works in formulations,” Singer said. “There are no shortcuts in formulations when working with a new ingredient. It is necessary to test so we can make assumptions.” The food and beverage category represents just 0,5% of the US hemp market. Supplements make up 69%, while cosmetics are at 24% and the pet category at 7%.

The total hemp-based CBD market in the US stands at $912 million in 2020, up 0,4% from 2019, when the growth was 115%. The New Hope Network / Nutrition Business Journal expects sales growth to pick up in mid-2022 and the market to reach nearly 1,4 billion in 2023. Projections for 2020 differ from those presented in 2019, when New Hope Network / Nutrition Business Journal estimated a market to exceed 4 billion in 2023, in the US alone.

 

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[Disclaimer: Please note that this text was originally written in Portuguese and is translated into English and other languages ​​using an automatic translator. Some words may differ from the original and typos or errors may occur in other languages.]

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I am one of the directors of CannaReporter, which I founded together with Laura Ramos. I am from the unique Island of Madeira, where I currently reside. While I was in Lisbon at FCUL studying Physical Engineering, I became involved in the national hemp and cannabis scene and participated in several associations, some of which I am still a member of. I follow the global industry and especially legislative advances regarding the different uses of cannabis.

I can be contacted by email at joao.costa@cannareporter.eu

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