;; MARCH ;;;; WINSIGHT GROCERY BUSINESS
walking into a dispensary where THC is sold is ;part of;
a completely di;erent data set. This market hasn’t been
born enough to really measure anything at this point.”
While the hemp-derived CBD market has soared in
recent years, the lack of data regarding existing hemp-de-
rived CBD sales—combined with the ambiguity of how
such products will be regulated and sold—makes it di;-
cult to accurately predict sales.
However, the Farm Bill certainly opens the doors for
mainstream retailers, such as Walmart and Target, to
begin merchandising hemp-derived CBD products, and
as more retailers enter the space, more su;cient data will
become available. Given these projections, hemp-derived
CBD retail sales are projected to reach ;;.; billion to ;;.;
billion by ;;;;, Hemp Industry Daily estimates.
Realizing Grocery’s Potential
xamining the smaller specialty
health food stores and smoke
shops that have pioneered CBD
paints an optimistic picture of the
category’s future in grocery.
For example, natural food
stores have seen a more than
impressive ;;;; increase in
sales of hemp-derived CBD products over the past ;;
months, according to Chicago-based cannabis market
research ;rm Bright;eld Group.
While CBD is certainly still a niche market, a glowing
opportunity for competition lies in the fact that sales of
these products tend to perform poorly in marijuana dispen-saries, where they are overshadowed by cannabis-based
CBD and THC products, the report says. Also, new opportunities to gain consumer trust are likely to emerge as
larger, well-recognized manufacturers move into the space.
“As far as grocery is concerned, there’s trust implied
there. There’s loyalty,” says Patterson. “I think they have a
unique opportunity to further build that loyalty with the customer. And maybe even accentuate it, and that’s ultimately
what this category can do for the standard grocery retailer.”
CBD’s migration onto grocery shelves has the potential
to move the category into the mainstream due to the sheer
number of outlets available compared to the smaller sum
of natural grocery stores and smoke shops. For example,
if only ;;; of natural grocery stores and ;;; of smoke
shops carry CBD, the retail footprint would exist in only
about ;,;;; stores, according to Hemp Industry Daily.
Yet if penetration moves into just ;;; of conventional
retail channels—including convenience stores/gas sta-
tions, drugstores, supercenters, warehouse/club stores
and grocery stores—the footprint could expand ;vefold
to ;;,;;; stores. P H
While the CBD landscape may seem daunting from a legal perspective, many grocery
retailers are diving in headfirst and see the 2018 Farm Bill as an opportunity to take
their crop of o;erings to new heights.
E-commerce is one of the most exciting opportunities coming to light, says Amanda
Nelson, nutrition program specialist for Portland, Ore.-based New Seasons Market,
which has been carrying CBD products since before the Farm Bill was passed. Nelson
says the new regulations open up distribution opportunities such as grocery delivery
for hemp-based products across state lines.
However, many consumers are in the dark in regard to the ins and outs of hemp,
which provides an opportunity for retailers to connect with these shoppers through
education. While putting better-for-you items in a designated section of the
store—instead of incorporating them throughout—is often frowned upon from a
merchandising perspective, it is an approach that is widely recommended for CBD until
consumers become more knowledgeable about the category.
MarketHub Retail Services co-founder and President Blake Patterson identifies
himself as a “huge believer” in category compartmentalization, and advocates that CBD
products—from pain relief to coconut bites and tinctures to salves—all need to “live in
one spot. Putting it next to the Tylenol is not going to work.”
For the most part, retailers are keeping CBD in its own section of the store, usually
under lock and key. Betty Bailey, wellness department manager for Alfalfa’s Market in
Boulder, Colo., says the arrangement gives her team a chance to connect with shoppers
and help them navigate the new o;erings.
Alfalfa’s keeps its hemp items in a case that it dubs the “hemporium,” which Bailey
says is “great for many reasons because it protects against theft but also really
encourages dialogue with customers” and allows sta; to “interface with everybody that
comes through to purchase it.”
To further its CBD outreach and education, Alfalfa’s featured a “New Relaxed You”
New Year’s campaign, which Bailey said was a great success because shoppers are
“always excited about hemp promotions,” and it attracts new customers who otherwise
might pass the section by or be intimidated by price points.
New York-based Fairway Market, which recently debuted a private brand CBD line,
takes a similar approach, with the products in a segregated locked case, and promotes
them through social and blog posts, pamphlets and its monthly magazine to “educate
consumers and make sure they know we’re in the business,” according to Jason Bidart,
VP of private brand programs for Fairway.
Downers Grove, Ill.-based Fresh Thyme Farmers Market also carries an array of
CBD products in its wellness department, including body lotions that it integrates on
shelves, and a more extensive selection of oral formulations in a locked glass case.
Looking forward, Jourdan Samel, co-founder of Boulder, Colo.-based Evo Hemp, says
that while he also recommends keeping CBD in a designated section of the store, these
products may be able to move into other aisles once they become more widespread.
Lucky’s Market, which Samel names as a leader in the space, is expanding CBD outside
of the designated section but with ample signage to point to CBD-based products.
While retailers’ legal teams often get in the way of the ability to carry hemp products,
Samel says he’s surprised to see that drugstores such as CVS and Walgreens, which are
strongly considering going forward with carrying edible hemp items, are more open to
the category than retailers such as Whole Foods Market, which he says has remained
Retailers That Are Paving the Way