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The Latest CBD Market Findings

May 24, 2022
May 24, 2022
CRYSTALWEED cannabis via Unsplash

Following a “gold rush” mentality, the CBD beauty market shows no signs of slowing down. When BeautyMatter explored the state of opportunity last year, we identified an estimated $28.5 billion future market, with more focus on terpenes, CBC, and CBG, as well as an increased sophistication of product offerings.

What is the 2022 verdict? We explored the latest findings from NielsenIQ, biotech company Purissima, and wellness company Cellular Goods to find out.

Dose of Wellness: CBD in Beauty & Health

  • Vitamins & supplements represent 55% of the total CBD category.
  • CBD product sales are up $4.9MM over the past two years.
  • CBD shoppers were on average 55-64 years old, with a $100K+ income and living in the western United States.
  • Products containing CBD can sell for over double the price of non-CBD items.

Interview with Anna Mayo, Client Director, Beauty Vertical at NielsenIQ

How is the CBD market and consumer evolving?

In the early days of CBD, the ingredient was making its way into anything and everything. However, the market has stabilized now, and we are seeing CBD really concentrate in the vitamins category, as well as in body lotions and pain relief gels.

In the total CBD health and beauty category, vitamins and supplements represent 55%, generating more than $32 million for the 52 weeks ending February 19.

We’re finding the core consumer of these CBD-driven wellness products tends to be older, earning a higher income, and living in the western part of the country. They’re also learning about CBD more through social media and influencers.

What can brands do to elevate themselves above the market competition? It seems like simply having a CBD-containing product isn’t enough given the boom of the category in recent years.

With so many CBD products ​available, it's likely that consumers who are interested in CBD have already tried it. If brands want to stand out from the crowd, it may be helpful to provide some sort of ​scientific evidence where CBD enhances the products. To justify the much higher price of these items, the consumer benefit is going to need to be very compelling.

CBD product brand teams also will need to work harder to reach shoppers today. As you say, it’s not enough to just be available. For one, we’re seeing that e-commerce is a key channel for CBD products, and we’re also seeing a dramatic rise in omnichannel shopping in all categories, so that’s an area where CBD product manufacturers can rise above the competition by studying who is buying their products (like the wealthier, older consumer in California), but also how that shopper is buying their products in-store or online.

CBD manufacturers can review integrated online and offline sales data to uncover shopping habits such as, perhaps, an increase in click-and-collect sales of a product and meet that shopper where they’re buying. They can refine marketing messages that reflect who the shopper is and effectively reach them and educate them on CBD where they prefer to shop.

What can we expect from the CBD beauty category in the future?

Within beauty, the CBD category has been a bit slower to take off than we had expected, and there haven't been any real breakout brands in the space. I do think there would need to be significant developments in the category to change the current trajectory of CBD in beauty. 

As I noted above, one area I see brands improving upon would be to provide more specific ​scientific evidence regarding how CBD enhances the product. Consumers are getting more educated about the products they use and claims made. And they are also more price conscious than ever. Until pricing comes down further, the consumer benefit is going to need to be very compelling. CBD beauty brands that provide the most compelling value proposition to consumers will have a competitive advantage, especially as the segment grows.

Now that consumers can shop for these products across retail channels (online, offline, mobile, etc.), brands will need to get smarter about how they identify and reach more granular consumer segments that gravitate to one channel more than another, or alternate between. 

Purissima x New Frontier Data Survey

  • Global cannabinoid demand is projected to reach over $400 billion by 2025.
  • The global CBD skincare market is forecasted to reach $3.4 billion by 2026, with moisturizers and cleansers proving the most popular.
  • The global CBD-infused topicals market is expected to surpass $400 million by 2030.
  • The cannabis consumer is maturing and seeking novel form factors, incorporating cannabinoids such as topicals in lieu of more traditional use cases like inhalants.
  • Individuals most inclined to seek out cannabinoid-infused skincare are younger consumers, cannabis consumers, and male consumers.

“Our survey partnership with New Frontier Data further reinforced our prediction that the need for new bio-based technologies to produce pure and natural cannabinoids will only continue to accelerate as efficacy evidence becomes more widespread.”

- Rob Evans, Co-Founder, Chief Business and Strategy Officer of Purissima

"The New Frontier Data survey is critical because it revealed that while most Americans believe in CBD’s therapeutic value, they also require additional education on how CBD and other cannabinoids improve overall health and wellness.”
By George Rudenko, Co-Founder, Chief Executive and Technology Officer of Purissima

Production of Cannabinoids Using Biotechnology and Synthetic Chemistry as a Path to Sustainability

  • To produce 1,000 kg of cannabigerol (CBG), a rare cannabinoid, field-based production requires 208% more time, and requires 40 acres of land, where lab-based production requires less than one acre.
  • In outdoor CBD production, CO2 emissions are 44 times higher than lab-made CBD and require 333 times more water.
  • The US and UK market are the two largest cannabinoid consumer markets.
  • Approximately 90% of cannabis sativa plant mass ends up as botanical waste.
  • Agriculturally derived cannabinoids are comprised of hundreds of compounds, e.g., trace pesticides and THC, which can impact the purity and quality of the final product. These are not present in biosynthetic production routes.
  • All current biosynthetic cannabinoid producers employ first-generation feedstocks (including corn, wheat, sugarcane, potato, sugar beet, rice, and plant oil), with some emerging cannabinoid companies exploring alternatives such as C1 (bio-methane, CO2, methanol) and second-generation feeds (crops and plants not suitable for human or animal consumption, e.g., cellulosic feedstock or waste vegetable oil).
  • Large-scale fermentation processes relying on living organisms to produce products will gradually give way to hybrid and/or biocatalytic processes where the whole organism is not required but only the enzymatic machinery.
  • Hybrid processes using combinations of fermentation, cellular, and enzyme biocatalysis and chemical catalysis will pave the way for effective, sustainable production of cannabinoids.
  • The production of cannabinoids through fermentation of microorganisms will be the next frontier for biotechnology.

“Not only is the production process [of lab-produced cannabinoids] more sustainable, requiring less land, water and producing greatly decreased biomass waste and carbon emissions than agricultural production, but lab production gives the opportunity to increase production without suffering systemic and biological restraints. Use of lab production provides a greater ability to respond to any increases in demand in the cannabinoid space, as consumers become increasingly conscious of the effective skincare and wellness applications of cannabinoids.”

- Anna Chokina, Chief Executive Officer, Cellular Goods

Key Takeaways

  • The current profile of the CBD consumer is a more mature, educated individual with a discerning eye for product quality and efficacy.
  • Biotech-produced cannabinoids will be the more sustainable procurement method as the market continues to expand.
  • E-commerce remains a key channel, but omnichannel shopping is on the rise (and will be sure to increase as and when legality increases).
  • CBD beauty brands need to provide scientific data to support the efficacy of their products, as this market segment has been slower on the uptake than initially predicted.
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