Connect with us

Feature

Drinks surge predicted amid “lipstick effect”

A global surge in the cannabis drinks market has been predicted in a new report, as consumers seek out small luxuries now and beyond lockdown.

Published

on

It suggests that every segment of the cannabis drinks market – including alcoholic drinks,  energy drinks, fruit juices and teas – is growing; with the global market on track to be worth US$5.8bn by 2024.

The report points to a so-called “lipstick effect” – the theory that sales of small indulgences spike during times of recession and economic hardship. 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 than luxury.

Cannabis infused drinks are an ideal example of this, according to data and intelligence firm Prohibition Partners which compiled the Disrupting Drinks report.

It say cannabis drinks are expected to benefit from the period of self-isolation, which is causing consumers to stockpile cannabis products as part of: “The home entertainment line-up in regions where people watch more television and spend more on ancillaries that facilitate in-home leisure, in-home socialising and the trend towards the ‘big night in.”

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 three per cent.

“Our research has found that cannabis-drinks, however, are poised for much bigger growth and point towards an almost 45 per cent compound annual growth rate for the cannabis-infused segment of the drinks industry.”

Cannabis-infused beverages are recognised for relaxation, reducing anxiety and promoting calm –  characteristics much sought after at a time of unprecedented upheaval and uncertainty.

In countries where CBD is legal, including the UK, cannabis can be infused into both alcoholic and non-alcoholic drinks. Indeed brands such as Vita Coco and Lagunitas have already launched CBD offerings.

In countries where THC is legal, including the US, Canada, the Netherlands, brands are beginning to produce non-alcoholic THC drinks that have often been designed to visually and gustatorily mimic alcoholic drinks – so they may look or taste like beer, or gin, or wine, mirroring the more traditional effects of cannabis.

As part of its study, Prohibition Partners polled over 15,000 adults across North America and Europe on their usage, purchase and attitudes towards cannabinoid-based products.

Consumer demand for drinks products is seemingly strong, with one in four consumers or would-be consumers of other cannabinoid-based products willing to try cannabis-infused drinks.

Meanwhile, 28 per cent of people who have already tried infused beverages say they intend to buy more in the coming three months.

Despite the inevitable economic downturn, cannabis product markets are expected to record strong growth as consumers look for help relaxing and de-stressing – and as the most popular format, drinks will likely be the greatest beneficiary, the report suggests.

This already growing industry has been further driven by COVID-19 shining a spotlight on respiratory illness and lung disease in an unprecedented way and having a knock-on effect on how people choose to consume cannabis, the study says.

People are reportedly avoiding smoking and vaping in favour of other formats such as edibles, including drinks.

Furthermore, governments throughout globally are searching for ways to bolster flagging economies and cannabis-infused beverages have the potential to deliver, Prohibition Partners says.

Working parents were particularly responsive in its research. Almost 70 per cent 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 in the household.

This could indicate 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 aged 25–44, the study authors say.

Stephen Murphy, co-Founder and MD of Prohibition Partners, says: “We are on the cusp of a drinks revolution, for centuries, legal socialising has either involved alcohol, or sobriety; outside of caffeine and nicotine, ultimately you either consumed alcohol in varying qualities, or you didn’t.

Cannabis infusions bring a third choice to leisure consumerism, and consumer research from Prohibition Partners finds that it’s a choice a lot of people plan to make.

“With global consumers now embracing health focused alternatives, the emerging cannabis drinks market is one of the most exciting sectors within the drinks industry; cannabis infusion will truly disrupt the drinks market and become a highly lucrative source of revenue for those companies ready to embrace it and a new source of social stimulation for consumers around the world.”

How cannabis is disrupting drinks globally is set to be discussed at the new online global event Prohibition Partners LIVE – running in place of the annual Cannabis Europa conference usually held at the Southbank in London, Cannabis Europa on 22nd-23rd June.

Trending

Cannabis Health is a journalist-led news site. Any views expressed by interviewees or commentators do not reflect our own. All content on this site is intended for educational purposes, please seek professional medical advice if you are concerned about any of the issues raised.

Copyright © 2023 PP Intelligence Ltd.