Brand development key to success in CBD game

By Hank Schultz contact

- Last updated on GMT

Getty Images
Getty Images
Brand development expertise will be a key differentiator in the rapidly evolving CBD space, one stakeholder says.

Cindy Blum is the head of branding, marketing and innovation for the Elevate CBD​ portfolio at Axcentria Pharmaceuticals​.  Before her current position, Blum had an almost 20-year career managing global brands at large CPG organizations, including Unilever, PepsiCo and Kellogg’s. 

Blum said the hemp/CBD category is in its infancy, and when toddlers learn to walk, sometimes they fall down.  The big companies poised to jump into the space learned their marketing lessons years ago.

“Because the category is so new people are trying to figure out how and where to sell their products,”​ Blum told NutraIngredients-USA.

“There are a lot of brands that are starting to spend, but they may not be spending as wisely as they could.  They just don’t have the partners to get it ‘right,’” ​she said.

Blum cited the recent Dove campaign redefining beauty standards as the kind of quality messaging an integrated marketing team can bring to the table.  In the future, just saying ‘CBD’ on the label is not going to be nearly good enough.

Getting market intelligence at CVS

Elevate CBD’s topical SKUs were among the early brands featured in CVS.  Having the pharmaceutical background of the parent company, a drug contract manufacturer based in Telford, PA, made that conversation easier, Blum said.

“When the Farm Bill passed in 2018 CVS was the first retailer that said, ‘We’re in.’ Elevate CBD’s topicals were among the first 10 brands they chose,” Blum said.

Part of the advantage of getting an early start in retail is figuring out how consumers will react to the products.  Because Elevate CBD refrains from making any kind of health claims on the products (as do other savvy hemp marketers), it is left to the consumer to decide what they’re good for.  That is driven partly by where the retailers choose to place the products.  Some have them in pain management, others in stress relief, others in sleep support.

“Right now CVS is only dealing with topicals and they are sitting in their pain management category.  We don’t yet know how shoppers will navigate and where they will look for these products,” ​she said.

The shakeout is coming

But in any case, having a brand holder that can demonstrate some expertise and experience will be a plus, Blum said.  At the recent Hemp/CBD Supplement Congress in Denver that was put on the by American Herbal Products Association, Alan Lewis, head of special projects at the retailer Natural Grocers, said that recent data he had seen showed that there are a couple of big brands in the hemp products market, eight or so medium sized companies, and then 300 or more smaller players all sitting at well below 1% market share. A major shakeout is inevitable.

“I can’t think of another category in recent times with a consumable good that had such big potential benefit for health and wellness and that had such an immediate market take off,” ​Blum said.

“You have everybody in the market from experienced CEOs who know how to put together a team that really knows how to market a brand and how to make quality products all the way down to the 24-year-old kid who says, hey, I can grown hemp in my backyard,”​ she said.

 

Want to learn more? Join us for a FREE webinar followed by LIVE Q&A with a panel of experts:

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FDA is actively exploring potential pathways to permit certain cannabis-derived compounds in food or dietary supplements, but what are the key boxes that need to be ticked to move forward with CBD products that meet the quality standards required of mainstream products? What safety questions remain unanswered? Where do we stand on a potential NDI notification or GRAS no objection? What claims can be supported by the science? And what does the CBD space look like in five years?

In this webinar on Thursday, 22 August 2019 at 10:30 AM Central​​, the NutraIngredients-USA editorial team has assembled an expert panel to tell you everything you need to know about CBD. Click HERE​​ ​​to register.

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