Catch a buzz means something different as people are becoming more accustomed to friends and family using marijuana instead of alcohol. THC products and beverages are becoming more mainstream, and the stigma is wearing off. People openly discussing whether they prefer to catch a buzz with marijuana or alcohol is commonplace.
Smoking may continue to be a way that marijuana is enjoyed but there are limitations to smoking – you still can’t do it inside. The global cannabis beverage market was measured at $575 million in 2020 growing to $915 million in 2021, with projections for 2028 being as high as $19 billion. Right now, the THC beverage space accounts for only 1% of sales of THC, leaving room for considerable growth. Michigan, a state where recreational sale and use is legal, has seen a 247% growth in THC beverage sales in the second quarter of 2022 since the year prior. Beverage companies, like Pabst Blue Ribbon and Constellation Brands, have made their first moves, so what’s yours?
Pabst Blue Ribbon announced the opening of a new manufacturing facility and distribution center in Desert Springs California solely focused on THC beverages that will triple their THC beverage production. Constellation Brands purchased 20% of Canopy Growth Corp and expanded this owner stake to 40% in 2020.
Is the Risk Worth the Reward?
Over the last 50 years, Americans’ sentiment on legalization of marijuana has changed dramatically, jumping from 12% of Americans believing it should be legalized in 1969 to 68% of Americans in 2021. While that’s all well and great, a decision has to be made by a company to delve into an entirely new category of product. And that may be more of the risk to your image and how it will look if you release a THC beverage.
Times are changing – it’s time to ask what your customers want. Eighteen States have legalized recreational marijuana use, so choose how you will market to these consumers, not if. MAi can help you navigate these high tides.
Where do we start?
With a newer product, like THC beverages, concept testing helps you gauge how well a product will be received if brought to market. 25% of total revenue and profits come from the successful launch of new products, and if we look at the trajectory of THC beverages so far, success is imminent.
Before releasing a THC beverage, concept testing will help you decide the best ways to market and message to your consumers by assessing purchase interest among your key targets and segments. Most importantly, it allows you to see what customers like and dislike about a product so you can emphasize the positive and refine the negative.
How do I talk to my target?
Language is a tricky thing. Knowing how your target talks about a product, service, or idea can provide valuable strategic information for positioning and communications.
Our approach to understanding language provides you with more than just the specific words consumers use – we also identify and quantify which ideas drive the key measures you care about.
We do this with a process called Text Science – a revolutionary and comprehensive approach to ensure your products and messaging resonate with your target.
If you would like to see Text Science in action, take a look at a case study on the hemp category which has been used by manufacturers to understand disconnects in understanding what hemp is and how it can be beneficial to certain consumers: Consumer Acceptance of Hemp-Infused Products Case Study
Where can your brand grow?
If you’re considering a debut into the THC beverage market, you may already have products in the alcohol or beverage category. Equity StretchingTM takes the passion people have for your brand to an adjacent category where it can be loved just as much. This tool provides you with a look at which products will best fit your brand and reveal areas that may attract new customers without alienating the current ones. Make sure the area you are delving into improves your brand image and does not pose a risk to your current customers.
Let’s take Pabst Blue Ribbon as an example since they are already moving into the category of THC beverages. It’s important to keep their loyal customers because they’ve maintained growth for the past 10 years with a grassroots marketing strategy. Their new High Seltzer will not only allow some of their current customers to give this a chance but its attracting new customers who may not typically drink a lager, such as their flagship beer.
What are your customers looking for?
What do your customers look for when they are buying a THC beverage? What is the best way to speak to them about your product? That’s where Text ScienceTM comes in. Using our approach to Text Science during concept and product testing gives us a chance to look at what the positives and negatives are in the customers’ own words and identify key drivers that may have been missed with typical attribute statements.
During messaging, using the customers’ own words to market on the shelves can produce better results compared to researcher-defined statements/levers. This is a new category. We want to make sure you’re on the right side of history.
What do you need to invest to make it worth it?
Of the tens of thousands of new products brought to market every year, 95% fail, costing limited resources that could be applied to development. Our volume forecasting will reduce your risk and put you in the other 5%. We can see how interested your customers are in a THC beverage, how likely they will buy your new product, and how likely they are to be repeat buyers. Success is loyalty. In the beverage industry, Coca-Cola didn’t become a leading brand by selling one coke to each person, they sell hundreds to everyone. Using volume forecasting will help you understand what resources are needed to push your product to the top.
There is no road map or GPS for this emerging market, but the more wrong turns you take, the more costly the product will be. MAi Research is helping companies make their way into this emerging market, so let us help build your road map to success. Take an in-depth look at how we help companies make the jump here!
Download our THC Beverage Market PDF: MAi Research – Rise of the THC Beverage Market
Read our case study on the consumer acceptance of the hemp category: Consumer Acceptance of Hemp-Infused Products Case Study
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