Soft, hot and alcoholic drinks have been at the nexus of social interactions and an essential lubricant facilitating cultural evolution for millennia. Brewing in Mesopotamia, wine symposia in Ancient Greece and a coffee takeaway in any contemporary metropolitan city have the same common thread running through them: beverages and the rituals and communities surrounding them. Cannabis drinks, still relatively niche and only accounting for a low single-digit share of cannabis sales in the markets where they are available, hold the potential to disrupt established drinks ecosystems and the traditions surrounding them, starting with alcoholic drinks.
Alcoholic drinks and the intoxicating allure of mindful drinking
The correlation between alcoholic drinks and cannabis products consumption rates has been the subject of much speculation, varying scientific research findings and – increasingly – strategic concerns from the part of an alcohol industry already on the defensive.
Adopting the point of view of the consumers themselves, a clear pattern emerges, a pattern that, in the long run, should keep alcohol industry executives awake at night. According to Euromonitor's Voice of the Consumer Cannabis Survey in 2022, nearly half of adult use and about a third of CBD consumers acknowledge the substitution role that cannabis can fulfil, with a surprisingly high 20% of the general population being able to see them as antagonists.
However, it is when looking into the country-specific survey responses and comparing legal versus illicit markets that the direction of travel becomes apparent. In 2022, respondents to Euromonitor’s Voice of the Consumer Cannabis Survey in legal US states were much more likely to substitute alcohol with cannabis when compared to illicit markets (34% of total population in US legal states versus – for example - 14% in Spain and Italy and 18% in the UK and Mexico), a fact highlighting the importance of accessibility and, ultimately, normalisation. And that normalisation wave is advancing fast, gaining momentum as cannabis becomes embedded in popular culture as much as when legislative frameworks evolve.
From bong water to sophisticated fmcg proposition
But how cannabis beverages look, taste and are being positioned and promoted is key. Following the initial stages of their evolutionary progress, the category is gradually formulating distinct identities, focused demographic targeting, and unique brand propositions.
In THC-forward offerings, an unashamed embrace of a fun, inclusively recreational positioning is a running thread across the board, but the approaches are becoming ever more polarised. On the one hand, pioneering products like Uncle Arnie’s, that is one of the leading Californian brands and has amassed a cult following over the years, are focusing on high-dosage offerings, primarily targeting cannabis connoisseurs and seasoned consumers.
On the other hand, products like CANN, supported by Hollywood royalty and household names like Gwyneth Paltrow, start playing a key role in reaching out to consumers beyond the cannabis ecosystem. Embracing LGBTQ causes and enticing “cannacurious” drinkers via low-dose offerings, approachable and increasingly more sophisticated flavour profiles that feel non-intimidating, as well as building holistic brand narratives that go beyond an overreliance on cannabis lingo and cues, will all be instrumental in growing the nascent cannabis beverages segment into the mainstream.
Accessibility and a casual, non-intimidating positioning are driving CBD drinks launches
Accessibility and a casual, non-intimidating positioning - distancing new brands from the potential risk of traditional, negative associations of cannabis - would appear to be the driving forces behind some of the most successful CBD drink launches. Recreational cues are replaced with more subtle, health and wellness-orientated design choices. Meanwhile, in terms of actual formulations, CBD remains the protagonist and hero ingredient, but it is also joined by additional functional elements, vitamins and/or nutrients, a direction that is becoming ever more important as the segment reaches high levels of maturity and saturation.
Monolithic CBD-only offerings will, hence, inevitably fall by the wayside at the same time that flavour profiles become more sophisticated and follow in the footsteps of artisanal soft drinks or craft RTDs. CBD-forward alcohol alternatives or adjacent might remain relatively niche for the moment but they also hold potential when cross-pollinated with the booming no/low alcohol trend, adding much needed functionality to the non-intoxicating mix.
Harnessing the on-trade
Nevertheless, equity, aspirational consumption and communal drinking rituals cannot fully flourish without a physical hub, and the hospitality industry is essential for providing it. As legislative initiatives gradually open the floodgates, the emergent cannabis on-trade will be the key to unlocking the real potential of the beverages segment, placing it on an even footing with adjacent, established drinks categories.
And yet, simply reusing the centuries-old formula of bars, clubs and pubs will not suffice. From the more subtle and indirect lighting to a shift away from high-energy music and atmosphere towards experiential offerings ranging from board games to video games – cannabis lounges will have to reinvent the role of a social hub through the prism of a substance that is very different from alcohol.
Barriers to uptake range from delayed onset and outset of effects to lack of on-trade presence and from an unconvincing value proposition due to absence of scale all the way to merchandising still being in its embryonic, exploratory stages. As these barriers are slowly resolved, cannabis beverages could encapsulate a paradigm shift in the ways we drink, form communities and, ultimately, socialise.
Euromonitor International provides data, insight and full report analysis covering the 24 most significant markets for cannabis. Particular focus is given to forecast data and future market potential. These reports are available here.
For an overview of the key markets for cannabis to watch, see the article Global Trends in Cannabis: The Next Big Markets.