A report released by Headset in March stated that advancements in marijuana infusion technology and the introduction of new brands into the market would boost cannabis beverage sales. The marijuana analytics firm noted that since the start of last year, cannabis beverage purchases had grown rapidly in Canada, making up roughly 4% of overall purchases.
At the moment, the cannabis beverage market is filled with numerous SME craft companies. Many large-scale manufacturers of alcoholic manufacturers are keen to enter the market, with most of them working to develop new products. For instance, Heineken recently introduced to the market Hi-Fi Hops in its beer category, which provides zero-calorie, zero-carb and cannabis-infused drinks.
HEXO also entered into a partnership with Molson-Coors to develop Truss while Canopy Growth, which is the biggest producer of cannabis in Canada, partnered with Constellation Brands. Companies such as Truss Beverage have plans to launch new cannabis-infused beverages in the coming months. A survey carried out last year by the company found that the category’s awareness was high, with more than 85% of potential marijuana consumers. It also discovered that more than 30% of respondents ingested cannabis beverages because these eliminated the need to smoke.
So, what does an increase in marijuana-infused beverages mean for the alcohol sector?
A study conducted by the University of Georgia in 2017 found that since cannabis beverages were legalized in the United States, wine and beer purchase orders had dropped by more than 10% over the past decade. Additionally, product-level retail sales data from last year shows that in Canada, cannabis-infused beverages have recorded significant rates of growth in comparison with other products in the edibles category.
A separate study conducted by Mintel closely examined consumer interest drivers with regard to marijuana edibles. The study noted that the use of cannabis usually had various functions, including allowing people to sleep better, decreasing stress and anxiety, and enhancing relaxation.
In combination with appealing taste, the study explained that these factors created a good opportunity for product differentiation, adding that cannabis-infused beverages that provided the right doses to consumers could be useful to manufacturers. The study concludes that beverages and edibles were generally regarded to be more discreet and convenient as well as healthier and more expensive.
This may soon be remedied, however, with more products set to enter the market. Different products from different companies in the market will likely bring about a decrease in prices, which will in turn boost demand further.
As demand soars, sector players, such as BevCanna Enterprises Inc. (CSE: BEV) (OTCQB: BVNNF) (FSE: 7BC) in the cannabis drinks segment, will likely deliver greater shareholder value while they grow.
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