By Pam Chmiel
Functional wellness drinks, Ready-to-drink (RTD) cocktails, and THC beverages commanded the spotlight at the BevNET CPG trade show in NYC last week. Many hemp-based brands, such as Brez, Calexo, Cantrip, Recess, and Cheech and Chong’s High & Dry, filled the beverage coolers around the event for attendees to taste. The Flyers Cocktail Co., a local NYC company, impressed with their RTD THC-infused classic cocktails, reaching the final round of Bevnet’s Best New Beverage Showdown. The winner was Pretty Tasty, a functional wellness beverage that added a new twist to the trend by focusing on collagen as the star functional wellness ingredient.
Cannabis Hits The Bullseye With RTD
RTD cocktails were the buzzphrase heard most often throughout the event. Suzy Richard, VP of Sales at SPINS, a leading CPG data and insights provider, spoke about RTD cocktails as the fastest-growing category in the beverage sector. SPINS data also affirmed that younger consumers are increasingly opting for nonalcoholic options. Further supporting this evidence is Coachella’s announcement of The New Bar, the festival’s first nonalcoholic bar, catering directly to this evolving consumer preference.
Neal Cohen, founder of alcohol RTD cocktail line Tip Top Cocktails, shared insights during the panel discussion “Spirit World: What We’ve Learned About RTDs.” He said they found most consumers are reaching for RTD cocktails to stock home refrigerators rather than on-the-go single cans, which made his company pivot from selling single cans to case packs of four. They also learned that four sells better than an eight-pack because of the $20 vs. $40 price point.
GoPuff Wants Cannabis
GOPUFF is an 11-year-old delivery service specializing in convenience store items like snacks, drinks, and ice cream that is dabbling with selling hemp-derived beverages. Max Crowley, VP of merchandising at Gopuff, shared the following insights about the potential for cannabis CPG products as a menu offering:
GoPuff’s beverage sales are 40% of the business, with alcohol claiming 2/3 of transactions. 80% of customers are under 34 years old. GoPuff incubates new products through its membership program, which offers deep discounts on new products as a way for new brands to enter the market.Cannabis Industry Leaders Weigh In
Ian Dominguez, Delta Emerald Ventures’ CIO, and BREZ hemp drinks founder Aaron Noshbisch represented the cannabis industry onstage for the panel discussion “Why CannaBevs Matter To All Beverage Categories.” Jeff Klineman, BevNet’s editor-in-chief, opened the conversation by saying, “We could spend all day talking about the impact of cannabis on the entire beverage business and how everything is going to be affected by this little molecule.”
Noshbisch boasted Brez generated $1.9 million in D2C sales last month and said their next step is to enter brick-and-mortar stores. He also added his excitement for the emerging THC beverage sector because “there hasn’t been a growth category in the CPG beverage sector in a while,” and believes the collision between trends like functional wellness ingredients, nonalcoholic beverages, and cannabis are the components to spark growth.
Dominguez pointed out that infused drinks have undeniable product market fit and demand, but there needs to be more retail outlet types to get the sector off the ground. And the 3,000 or so beverage distributors in the United States need to be willing to push THC-infused beverages.
States like Minnesota are helping to set standards by allowing hemp beverages for sale in other outlets besides a dispensary. Dominguez also quoted a few stats that should encourage other states to follow their lead:
Bars in Minnesota saw 30% of their sales related to THC drinks. Minnesota liquor stores are witnessing hemp beverages gaining market share much faster than the years it typically takes for new brands or categories to get traction.Opportunities For Growth
The functional wellness category and RTD cocktails were clear standouts at BevNet NYC, presenting new opportunities for innovation in cannabis beverages. Suzy Richard, from SPINS, a data company, offered insights into growing your category by adapting existing product lines with ingredients tailored to specific consumer needs throughout the day. These needs include:
Hydration drink for a morning hangover. Mushroom-infused coffee to kickstart the day is seeing growth. A midday energy drink that provides focus and mood support. Mocktails are a nonalcoholic option for socializing during cocktail hour. Sleepy Girl Mocktail is viral on TikTok because of its tart cherry juice recipe, which is naturally high in magnesium and a trending functional wellness supplement. Bedtime elixirs to help with sleep issues are always popular.Richards suggested looking at drinking rituals to determine which beverage you are lined up to. And looking at vitamin, mineral, and supplement trends will also signal what is coming for beverages.
It’s Not Just The Cannabis Industry
Securing funding is difficult in any industry, and similar to the cannabis industry, the beverage industry is notoriously expensive to launch a business, making it even more challenging for THC-infused beverage brands. Ryan Williams, founder of FABID, an investment banking services provider, highlighted a 40% decline in funding for independent CPG (consumer packaged goods) brands over the past three years. However, demonstrating strong profitability and efficient operations can significantly improve your chances of securing an investment deal.
A Budding Future
The BevNet NYC show underscored the exciting potential of THC beverages, with functional wellness and RTDs creating fertile ground for further innovation. As the nonalcoholic movement gains momentum, with new retail concepts like Boisson (NYC), Seshy (SC), and Sans Bar (TX) emerging across the country and dedicated to these beverages, the stage is set for mainstream acceptance of THC-infused drinks.
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