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CBD beverage makers stake positions as category emerges

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Some brands are touting flavors, others are highlighting a state of mind and several are putting the star ingredient, CBD, boldly on the center of the container.

At the BevNET industry conference in Santa Monica, Calif., this week, CBD or hemp-derived beverages, were widely touted as the next big thing to hit the industry. New brands are proliferating, from grassroots start-ups to well-financed companies with experienced beverage-industry leadership.

“It’s the Wild West,” says Gwendolyn Wyard, vice president of regulatory and technical affairs at the Organic Trade Association.

Both camps are waiting for what will happen when the global beverage giants – Diageo, PepsiCo, The Coca-Cola Company, AB InBev – enter the market through their own development or brand acquisition.

Speculation is that these companies, along with big box retailers like Target, Walmart and major grocery chains, are waiting until the FDA clarifies its regulatory approach for products containing the non-hallucogenic CBD or cannabidiol, commonly derived from the hemp plant.

“What am I doing today that will allow me to compete with Coke, Pepsi and AB-InBev?” asked Benjamin Witte, founder and CEO of New York City-based Recess, during a panel, The Race for Distinction in CBD.

Witte is positioning Recess CBD-spiked, flavored sparkling waters around how they make you feel. Cans feature a tagline, “Calm, Cool, Collected.” The website is prominently headlined, “We canned a feeling” one that is “not tired, not wired.”

Witte believes it’s the more abstract feelings that will draw consumers to CBD beverages rather than detailed ingredient breakdowns, such as milligrams of CBD.

“Consumers don’t want to hear 50 facts about hemp. They want to know the feeling they’ll get,” said Witte. “It’s not the caffeine category; it’s the energy category.”

Mood33 hemp-infused herbal teas is another brand using feelings to get through to consumers. Mood33’s six mood formulations include joy, peace and passion.

“Mood33 is essentially a tea brand with hemp as a hero,” said co-founder Eric Schnell, who was also a co-founder of the organic, bottled tea brand, Steaz. One of the most popular mood33 teas is the “joy” peach tea, a flavor that is popular with regular bottled brands.

In addition to highlighting mood, mood33 distribution is focused on small chains and mom-and-pop stores in high density markets like New York City and Los Angeles, following the early footsteps of Snapple and Arizona teas.

“There are too many sparkling herbals,” noted Schnell. “We are marketing gulp-able tea. We know the consumer in this category.”

The facts are key to Jonathan Eppers, the founder of Vybes. It’s somewhat medicinal looking label touts 25mg hemp CBD in each bottle. He started his company when he discovered how CBD helped him manage stress and anxiety. “CBD changed my life,” he said. “I consider it medicine.”

Vybes contains a higher dose than the 10 mg a bottle found in many CBD brands. “People are not going to spend $8 on a beverage just because it tastes good,” said Eppers. “We try to focus on the science in the bottle and the way it makes you feel.”

CBD-infused sparkling water, Daytrip Beverage Co., from San Francisco, is run by former executive at Rockstar Energy, Joey Cannata, who thinks that once the FDA makes clear its regulatory POV, “the floodgates will open.”

“Right now the pond is pretty small, but it is there, with regional players where there’s less risk for them to do it” said Cannata. “No offense to Coke, Pepsi and Diageo, a lot of their growth over the years has come from mergers and acquisitions activity.”

Original Article: https://www.campaignlive.com/article/cbd-beverage-makers-stake-positions-category-emerges/1668527

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