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Where to position cannabis-infused soft drinks for the greatest success - Comment

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A functional drink that actually 'functions' is a very saleable commodity. Soft drinks infused with cannabis extract cannabidiol (CBD) could be just that and, for that reason, an awful lot of soft drinks executives are talking about them, albeit sometimes in hushed tones. Richard Corbett looks at the opportunities out there for CBD-infused drinks.

There is anecdotal evidence that drinks infused with CBD could provide pain relief, ease anxiety, reduce inflammation and even help with acne. If they can demonstrate these attributes, then a new category on the soft drinks landscape could quickly establish itself.

The association with cannabis - even if CBD will not actually get you 'high' - means that there will be plenty of hoops to navigate. When The Coca-Cola Co was reputed to be in talks with Canadian company Aurora Cannabis last year, the group trod very carefully, saying at the time it was, "along with many others in the beverage industry, closely watching the growth of non-psychoactive cannabidiol as an ingredient in functional wellness beverages around the world".

The 'Smoking it but not inhaling it' line is currently the more straightforward route for the PR departments of the big operators to take. That is why the early innovators and pioneers to date tend to be small scale players who position themselves as being a little risqué.

Attitudes are changing though and the medicinal qualities of cannabis are increasingly being recognised. Regulations are loosening in North America. Canada voted last year to legalise recreational cannabis use while a number of US states too have legalised it. The medical use of cannabis is legal in 33 states. The recent passing of the Farm Bill in the States allowed hemp (a variant of cannabis) to be grown as an ordinary agricultural commodity. 

The stigma attached to cannabis is being diluted every day and, in a decade, it is realistic to expect that barriers restricting the availability of soft drinks utilising CBD will have been eroded away in markets around the globe.

Ingredient regulation is not the only current hurdle that stands in the way of the emergence of functional cannabis drinks. The regulations on health claims on labels may vary across the world but they have one common theme; they are generally very strict. CBD infused drinks may deliver on all of their health claims but it is very difficult to 'say what it does on the tin'.

To give you an idea of how strict, in September last year an advert for Red Bull promoting the '4pm Finish' was deemed to have contravened the codes of the EU health claims register under Regulation 1924/ 2006. The Advertising Standards Authority in the UK found that it had implied a relationship between the drink and health. By merely implying that the increase in mental focus and energy meant that you would finish work early, Red Bull had fallen foul of the rules.

In the US, the rules are tight too with all health claims, whether authorised or qualified, needing a pre-market review by the US Food & Drug Administration.

These drinks will need to be marketed through PR or, like an 'old wives' tale', by word of mouth. In the age of social media, that's very feasible and if the products do live up to the billing, then they'll sell themselves.

There's also an assumption that cannabis drinks will evolve as a wellbeing style drink. Maybe, a merger with the kombucha-style products that are generating a lot of noise presently and would appear to be a good fit with Millennial values.

It would make sense that a fusion with a craft-style kombucha product and CBD will appeal to a Millennial consumer, particularly with an emphasis on easing anxiety, which has a lot of awareness in this age group.

If CBD does genuinely relieve pain, then the target market may be different altogether. The audience will be more biased towards older consumers and not Millennials - after all, it's the more-mature consumers who tend to ache more. This will shape how the products should be presented to the market. 

I would think that any successful product may need to have a medicinal look about it. It could take its cue from probiotic shot products like Actimel or Yakult; sold in small-unit multipacks for daily consumption.

Whether aimed at Millennials or older consumers, any product will also need to gain the trust of potential consumers. I'm not sure this can be achieved by just appearing on the shelves of the mainstream distribution channels.

I recall a fortified water brand launched in Sweden called Vitamin Well. Being a start-up company, the drink struggled to get listings in the big supermarket chains but a pharmaceutical chain was persuaded to list the drink. There had been a lukewarm reception to vitamin waters in Sweden previously but because consumers' first exposure to the brand was in a pharmaceutical store, it gave the brand an authenticity. The drink became a success and is now sold in a number of other markets.

It'll be difficult to predict which product will have the winning formula, but drinks are likely to be segmented to cater for different consumer needs. Whether it's the anxious Millennial or the aching adult, one size will not fit all.

There will be many challenges for emerging brands, but those that succeed will sell a lot of units and at a premium price because functioning products sell and drinkers will pay more for them.

That, after all, is why there is so much interest.

The future of cannabis in the drinks industry - just-drinks FUTURES


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