COVID has been the roughest period that most food brands can remember. But the crisis has brought opportunities as well as challenges. One is an acceleration of the health and wellness trend among consumers. One sector to benefit from this – although it is often at pains to point out the current lack of hard evidence linking it with improved health – is the CBD industry.
According to the Harvard Medical School in the US, CBD may prove to be an option for managing anxiety, insomnia, and chronic pain, although more research is still needed. It is a cannabinoid extracted from the cannabis plant. Containing little or no THC, the compound in cannabis which causes users to get 'high', CBD can be added to food and beverages.
More than 8 million UK consumers are now buying CBD products, according to data published in May by Alphagreen.io, which sells certified CBD products. Spending exceeding £150 million in the first four months of 2020 alone, putting the market on target to achieve revenues of £450 million over the year as a whole, which would represent 50% growth compared to 2019.
London-based CBD manufacturer Love Hemp, one of the UK’s best-selling CBD brands, experienced a surge in online sales during the COVID-19 pandemic. From January - May 2020, online sales rose 107% compared to the same period the previous year.
“The COVID-19 pandemic is profoundly affecting consumer markets and is accelerating existing trends within the consumer sector,” said Love Hemp CEO Tony Calamita. “We’ve seen an uptake in the interest of health and wellness during the pandemic, as COVID-19 reinforces the importance of being healthy and maintaining a strong, balanced immune system.”
Existential threat to CBD industry
The CBD industry has just been dealt a potentially dangerous blow, however, with the news that the European Commission is considering classifying it as a narcotic instead of a Novel Food. While a decision won’t be made before September, it could mean that hundreds of CBD and hemp (also derived from the cannabis plant) products would be unable to legally retail on the European market.
The ruling could strike a ‘final blow’ to the entire hemp sector, warned the European Industrial Hemp Association. It called the move “political, rather than legal, and absolutely not based on the latest scientific literature nor inspired by the current debate at the United Nations level.”
Love Hemp’s Calamita agreed. “It’s beyond a joke,” he told FoodNavigator. “It's a ruling back from the 1960s or 70s. Narcotics are dangerous and addictive, of which CBD is not. For me, anyone of sound logical mind wouldn't support such a thing.” He added he feared the discussion within the EC was not motivated for the for the good of consumers. “I think it's being made for the good of particular individuals or industries.”
However, now it has exited the EU, any changes won’t apply to the UK. Calamita is therefore hopeful, like the UK’s Association for the Cannabinoid Industry, that the move could ultimately prove an exciting opportunity for Britain to emerge as a global leader in CBD R&D.
“It's a shame as we already do a decent amount of trade throughout Europe,” he said. But “as part of the big picture it's OK because we've positioned ourselves as a global brand… We're moving into America and Canada and we're doing a lot of work in Asia. So, in the grand scheme of things it's potentially a small blip.
“In any negative situation for people that position themselves right and strategize themselves correctly they can take advantage of any bad situation and this is no different.”
A thriving start-up
Launched as a bedroom business in 2014, Love Hemp has over 80 products, including edibles (such as chocolate and jelly domes), oils, sprays, cosmetics, and vapes, and has around 1,200 retail listings, including in Boots, Sainsbury’s, Holland and Barrett and Ocado.
Over the past few years, the brand has seen the demand for CBD products rise on the back of increased concern among consumers for health and wellbeing. Its consumers are mostly made up of women aged 25-30. This cohort is “interested in holistic wellbeing and attracted to us a lifestyle brand," the CEO told us.
One of Love Hemp's recent triumphs was launching Europe’s first functional spring water infused with CBD in Sainsbury’s in 2018. Proof, reckons Calamita, that consumer attitudes towards CBD are shifting quickly and there is space in grocery and mainstream food and beverage for CBD.
“There are only a handful [of retailers] that are being resistant to CBD listings now. Pretty much all the retailers have CBD now or are in advanced discussions to start listing CBD products.
“We've seen it progress from absolutely zero knowledge and understanding to where are today where most people have heard of CBD and have tried it.
“Conceptions are moving a big way forward. A lot of the negative stigma is starting to come away especially with national retailer listings and so many A list celebrities and recognised, respected people using it. I don't think we are far off it becoming an everyday accepted product with none of the negative connotations associated with cannabis.”
He also hopes to tap into growing demand from athletes using CBD as an aid to recovery. He too stresses that more studies are needed, but for him CBD is a ‘miraculous magical compound’ offering a range of potential holistic benefits including better sleep, mindfulness and reduction in inflammation.
“CBD is very powerful at that from studies we've seen and anecdotal evidence from consumer reports.”
He added: "There's big demand for CBD in every country in the world. CBD is arguably the most incredible and fantastic thing to hit health and wellness for any of our lifetimes.”
