This report examines the rapidly developing Beverages category, offering insight into an undeniable phenomenon within cannabis, as evidenced by Constellation Brands’ massive investment. The report covers the overall size of the beverage market, a state-by-state breakdown of it, an examination of segments within the category, and more. It will be useful to anyone looking to enter the infused beverages market, as well as to retailers and members of the media interested in better understanding what consumers are looking for in an infused beverage.
When Constellation Brands, an alcohol company that owns Corona, added $4 billion to its already ample investment in Canopy Growth, people noticed. Besides the fact that an alcohol company was investing in the cannabis industry, it aroused a lot of interest in the potential market for cannabis-infused beverages. Constellation is not the only major alcohol company to take an interest in cannabis—Lagunitas brewing makes a non-alcoholic, THC-infused “beer” too.
Such investments have led to countless articles about CBD-infused sodas replacing beer entirely, or non-alcoholic, THC-infused champagne being the new drink of choice on New Years’ Eve. It’s fair to speculate, but the data doesn’t exactly bear out those narratives. This report shows us what beverages are selling well, and with whom. Soda is still king. And while there may be a few true connoisseurs who appreciate getting buzzed off booze-free bubbly on NYE, the Mocktails segment—which contains alcohol imitations—hasn’t exactly taken off yet.
Beyond the general preference for sodas, we look at what kind of sodas people like, breaking down the category into flavor preferences. Interestingly enough, flavor preferences are kind of all over the place, which suggests that whatever was first-to-market in each state was what people gravitated to. This could be because of the relative novelty of infused beverages. Pricing, also, is kind of all over the place, with each state posting wildly different numbers for each Segment. Again, this probably has a lot to do with how siloed each state is in terms of product development, and federal legalization could smooth it all out.
We’ve also examined how well people prefer Beverages, and seen that while few baskets overall contain them, the majority of baskets with Beverages in them contain another category. Beverages are clearly an impulse buy, but that’s something that can be capitalized on. There’s also the matter of CBD-infused beverages vs THC-infused beverages. While CBD-infused Beverages don’t make up the majority of sales, they are a significant portion. Whether hemp-derived CBD beverages, which are newly available in bars, coffee shops, and restaurants, will eat into that share remains to be seen.
All told, beverages are a category within cannabis that’s worth watching. It might not be quite the movement that some have made it out to be, but there are a significant number of cannabis consumers who don’t drink alcohol, but still want to have a “drink” with their friends. The cannabis-infused beverage category meets a need that people didn’t even know they had, which makes it automatically interesting. However, there is certainly a plateau to that need. This report shows the market as it currently exists and attempts to understand where it might end up. For anyone looking to break into Beverages, it will be invaluable.
Data for this report comes from real-time sales reporting by participating cannabis retailers via their point-of-sale systems, which are linked up with Headset’s data analytics platform. The data included are for 2019 year-to-date, and span Colorado, Washington, and Nevada. Those data are cross-referenced with our catalog of over hundred thousand products to provide detailed information on market trends.
Headset’s data is very reliable, as it comes digitally direct from our partner retailers. However, the potential does exist for misreporting in the instance of duplicates, incorrectly classified products, inaccurate entry of products into point-of-sale systems, or even simple human error at the point of purchase. Thus, there is a slight margin of error to consider.
Over the last two years, Beverages have seen steady growth, both in overall sales and market share. Market share has gone up 0.22%, and the overall market has doubled, going from a little under $1.5 million to about $3 million. However, that’s still a relatively small portion of the overall cannabis market. Beverages, at their peak market share, were only 1.42% of sales. So, while the category has constantly gained share and grown sales, it is by no means a mass market, yet.
Lagunitas only jumped into the infused beverages market last June, and few of the other THC-infused alcohol replacement offerings are backed by brands even half as big. A few years of marketing from a company with experience selling drinkable intoxicants could really change the game, especially as advertising rules for cannabis are eased
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