CBD awareness is going up, but this is not reflected in sales, says Brightfield Group

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According to Brightfield Group (see infographic below), in Q4 of 2020, cannabidiol (CBD) experienced an increase in awareness. In Q3, only four brands had at least 20% consumer awareness, which increased to 14 brands in Q4, with nearly all the top CBD brands in the U.S. having over 10% awareness. However, despite the increase in awareness, purchasing and loyalty have remained largely the same.

The top brands by awareness according to Brightfield Group are Garden of Life (29.4% awareness), HempFusion (28%), Charlotte’s Web (27.5%), CBD Clinic (26.9%), and HempMeds (25.8%). The CBD brands that saw the best increase in awareness between Q3 and Q4 were CBD Clinic, Diamond CBD, Vitaleaf Naturals, Hemp Bombs, and CBD American Shaman. However, only 45% of the brands saw increased purchasing. This means that CBD brands need to pay close attention to their purchase funnel as customers become more aware but not yet loyal to any particular brand, says Brightfield Group. Awareness grabs can therefore not be the only strategy for success, because while important and successful, they don’t necessary convert down the funnel.

“Celebrity endorsements as well as using influencers or brand ambassadors on social media have been strong awareness drivers. Some companies that have leveraged this include HempFusion, Medterra, GreenRoads, CBDfx, CBDistillery, cbdMD, NuLeaf Naturals, and Koi CBD,” said Jamie Schau, international research manager at Brightfield Group. “Pet Releaf had various ‘famous IG dogs’ promoting their products, and CBDMedic likely owes much of its awareness to [Rob Gronkowski, AKA] Gronk. Martha Stewart and Playboy brands, naturally, owe virtually all of their name recognition to their previously existing followings. Major supplements brands like Garden of Life had existing awareness based on their other lines of products.

“Some more non-traditional methods of garnering awareness: Sagely Naturals sponsored the LA Marathon last year; cbdMD had a national television advertising campaign entitled ‘Conquer the Day’; Paw CBD launched an advertising partnership with Trip Advisor and had its own national TV campaign which occurred during the Puppy Bowl on Animal Planet and Discovery Plus. They also have a successful podcast, a route other brands are pursuing to generate awareness as well as educate.”

Awareness initiatives that educate may be an important way to drive purchasing, as some consumers are still hesitant to try CBD products. “Of the consumers who are not using CBD today, many report they are ‘happy’ with the current products or medicines they are using to treat conditions. However, there is an opportunity to inform this same consumer group on the benefits of CBD, as many also report they just don’t know enough about CBD products,” says Schau. “Also, skepticism around CBD actually working or its potential to get one ‘high’ has been reported as a deterrent. The brands that can deliver on the education of product benefits, as well those top CBD consumer product attributes/expectations (fast effects, taste, and fresh ingredients) will be in better positions to increase penetration.”

Another strategy to draw in customers in the CBD space has been to offer discounts to encourage online purchases of products. Unfortunately, as a result of all these discounts, 53% of CBD consumers now report buying CBD products with the best discount. So, while discounts attract new customers, they do not create loyalty. However, loyalty can be earned if the product purchased provides the desired effects.

“Price is indeed a key purchase driver for US CBD consumers, with 69.2% listing it as a top attribute in their CBD products – however, nearly as many (67.9%) list desired effects as a top attribute – thus price and quality/efficacy have to be considered heavily in developing and marketing products, as a cheap product that does not offer quality will not survive,” explains Schau. “Other primary purchase decision factors are product formats, dosage and taste, as well as consumers’ perceptions/assumptions when it comes to a product’s effects, especially when they are looking at CBD for support with sleep, pain/physical relief, or relaxation – the most sought after product effects. Friends and family continue to be a major influence on purchase behaviors, as almost one-third of CBD purchasers first learned of CBD via friends or family in Q4 2020.

“Quality products deemed from the consumer lens are those that meet consumers’ expectations, fast – primarily from a ‘desired effect’ perspective. In addition, attributes such as ‘tastes good,’ ‘fresh’ and ‘made with quality ingredients’ are all table stakes, so ensuring these three are in place is a must.”

"Conversion Calamity: Getting Past Awareness in US CBD" from Brightfield Group