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Cannabis in Food and Drink - US - March 2020

OVERVIEW
What you need to know
Definition
EXECUTIVE SUMMARY 
Market overview
The issues
Trust and safety are concerns
Edibles and drinkables are hard to get right
The opportunities
Creativity moves brands beyond ready-to-eat options
Cannabeverage is not Alcohol 2.0 (but adult beverage brands should still take note)
Better-for-you brings opportunities
Key trends
Consumers are sweet on edibles
Consumers slower to cheers with cannabis
Good taste is always in style
Canna-foodies are the key crossover
What’s next
MARKET LANDSCAPE
A tale of two markets
Adult beverages as key competitive set
Figure 1: Total US retail sales and forecast of alcoholic beverages, at current prices, 2014-24
Figure 2: Total US retail sales of Adult Beverage, by segment, at current prices, 2014 and 2019 (est)
Functionality may offer latitude on important attributes
Figure 3: Perception of food launches with functional claims versus without functional claims, Jan 2017-Dec 6, 2019
A unique spin on beverage
Figure 4: Perception of drink launches with functional claims versus without functional claims, Jan 2017-Dec 6, 2019
MARKET BREAKDOWN
Competition comes from everywhere
Interest outpaces experience (for now)
Figure 5: Experience or interest in cannabis consumption methods, October 2019
High quality highs worth the price
Edibles, munchies and snacks – oh my!
Figure 6: Preferred snack flavor types, by age, November 2019
Consumers are a little salty
Figure 7: Usage and interest in food and beverages with cannabis as an ingredient, January 2020
General favorite flavors reinforce opportunities
Figure 8: Preferred snack flavor types, November 2019
THC vs. ABV
Figure 9: Perceptions of alcoholic beverage and cannabis, July 2019
MARKET PERSPECTIVE
Dosing can be tricky for both brands and consumers
Changes in regulations can change the game
Cost of entry is high for cannabis cuisine
Medical edibles require a different approach
Seeing through the smoke
BRAND LANDSCAPE
Trend drivers – what motivates consumer behavior?
Brands to watch
California blazes the trail towards on premise
Infused ingredients elevate at-home edibles
Etsy x Cannabis = semi-homemade
Boozeless adult beverage
Pot gets a culinary edge
Canna-cookbooks turn consumers into canna-chefs
Stigma stifled by education (the more you know!)
THE CONSUMER – WHAT YOU NEED TO KNOW 
Flavor comes first
Cannabis creeps up on alcohol
Familiarity finds favor with flavors
USAGE AND INTEREST
Sweet teeth and an eye for nutrition
Figure 10: Interest or experience in food /drink with cannabis ingredients, January 2020
More men show thirst for cannabis
Figure 11: Interest In food /drink with cannabis ingredients, by gender, January 2020
Youth more open to indulge
Figure 12: Interest in food /drink with cannabis ingredients, By Age, January 2020
In good taste
Figure 13: Interest or experience in food /drink with cannabis ingredients, by important qualities, January 2020
REASONS FOR INTEREST
Edibles inspire curious consumers
Figure 14: Reasons for interest in food and beverage with cannabis as an ingredient, January 2020
Women take their edibles seriously
Figure 15: Reasons for interest in food and beverage with cannabis as an ingredient, by gender January 2020
Young and fun
Figure 16: Reasons for interest in food and beverage with cannabis as an ingredient, by age January 2020
Easing into affluence
Figure 17: Reasons for interest in food and beverage with cannabis as an ingredient, by household income January 2020
REASONS FOR LACK OF INTEREST
Non-users are just not that into edibles
Figure 18: Reasons for lack of interest in food and beverages with cannabis, January 2020
Younger palates require more from cannabis
Figure 19: Reasons for lack of interest in food and beverages with cannabis, by age, January 2020
Disinterest tracks with lifestyle incompatibility
Figure 20: Reasons for Lack of Interest in food and beverages with cannabis, by income, January 2020
PRODUCT FEATURES
Taste over THC
Figure 21: Important attributes in food and beverage with cannabis, January 2020
Women want more from edibles
Figure 22: Important attributes in food and beverage with cannabis, by gender, January 2020
You can’t outdose bad taste
Figure 23: Important attributes in food and beverage with cannabis, by age, January 2020
Affluence influences product attributes
Figure 24: Important attributes in food and beverage with cannabis, by household income, January 2020
Talk about taste, but make it approachable
Figure 25: Important attributes in food and beverage with cannabis, by information source, January 2020
Taste tracks with adventurous eaters
Figure 26: Attitudes and behaviors related to food and drink choices, by important attributes in food and beverage with cannabis as an added ingredient, January 2020
Using beverages with cannabis as a replacement for alcohol
Figure 27: Attitudes and beliefs about cannabis in beverages – CHAID – Tree output, January 2020
PURCHASE LOCATION
Cannabis requires specialization
Figure 28: Preferred purchase location for food and beverage with cannabis as an ingredient, January 2020
Women emphasize specialization, medicalization
Figure 29: Preferred purchase location for food and beverage with cannabis as an ingredient, by gender, January 2020
Youth open to on-premise
Figure 30: Preferred purchase location for food and beverage with cannabis as an ingredient, by age,  January 2020
Traditional retail appeals to affluence
Figure 31: Preferred purchase location for food and beverage with cannabis as an ingredient, by household income, January 2020
Edibles require expertise
Figure 32: Preferred purchase location for food and beverage with cannabis as an ingredient, by product attributes, January 2020
Pricing provides baseline for strong products
Figure 33: TURF Analysis – Product features, January 2020
FOOD ATTITUDES
Cultivate interest by emphasizing safety
Figure 34: Attitudes about food with cannabis as an ingredient, January 2020
Expertise may build trust…
Figure 35: Attitudes about food with cannabis as an ingredient, by gender January 2020
BEVERAGE ATTITUDES
Canna-beverages compete with adult beverages on multiple fronts
Figure 36: Attitudes about food with cannabis as an ingredient, by age, January 2020
Spirits, beer get more competition from cannabis
Figure 37: Attitudes about beverage with cannabis as an ingredient, by gender January 2020
Adult beverage trends will evolve with cannabis
Figure 38: Attitudes about beverage with cannabis as an ingredient, by age January 2020
Parents have an eye on beverages
Figure 39: Attitudes about beverage with cannabis as an ingredient, by parental status January 2020
DISCOVERY
Cultivate interest through established authority.
Figure 40: Discovery of food and beverage with cannabis as an ingredient, January 2020
Women want personalization
Figure 41: Discovery of food and beverage with cannabis as an ingredient, by gender, January 2020
Youth more open to culinary cannabis
Figure 42: Discovery of food and beverage with cannabis as an ingredient, by age January 2020
PURCHASE AND TRIAL 
Consumer trust comes first
Figure 43: Behavior related to food and beverage with cannabis as an ingredient, January 2020
Women especially need to feel trust…
Figure 44: Behavior related to food and beverage with cannabis as an ingredient, by gender January 2020
Young consumers are trust seekers
Figure 45: Behavior related to food and beverage with cannabis as an ingredient, by age, January 2020
APPENDIX – DATA SOURCES AND ABBREVIATIONS
Data sources
Consumer survey data
CHAID
TURF
Abbreviations and terms
Abbreviations
Terms

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