2020 National Study of CBD Use
IN CLEAR FOCUS this week: CBD marketing agency Bigeye’s podcast reveals results from its 2020 National Study of CBD Use. Beauty brand expert Alexandra McClay joins us to discuss key findings from the study. Alex shares her personal experiences of building a new beauty line and reflects on consumers’ concerns about the quality control of Cannabidiol-based products. We also discuss what Martha Stewart’s endorsement of CBD could mean for the long-term adoption and growth of this dynamic category.
Adrian Tennant: You’re listening to IN CLEAR FOCUS, fresh perspectives on the business of advertising produced weekly by Bigeye. Hello, I’m your host, Adrian Tennant, VP of Insights at Bigeye. An audience-focused, creative-driven, full-service advertising agency, we’re based in Orlando, Florida, but serve clients across the United States and beyond. Thank you for joining us. Today, we’re going to be talking about the national study of cannabidiol use that Bigeye published this week. Consumer’s receptivity to CBD use has been growing rapidly since the 2018 farm bill legalized industrial hemp production. Since March we’ve also been dealing with the COVID-19 pandemic. The CBD industry has reported a rise in the number of people using the product – up from 15% of US adults at the beginning of the year, to an estimated 18% last month. Yet in spite of this booming market, there’s been a lack of published sales data or detailed information about CBD users’ attitudes and purchasing behaviors. Until recently CBD sales were not captured by the largest scanner data agencies, such as Nielsen or IRI in the way that consumer packaged goods are. CBD product sales also occur in many unmeasured channels, such as cannabis dispensaries, vape shops, and online via e-commerce where there often isn’t syndicated data or reporting. So earlier this year at Bigeye we decided to undertake our own primary research to really understand CBD use and to help our clients identify opportunities that tap into this dynamic market. We collected data from around 800 respondents aged 18 years and older. To qualify, they had to be resident in one of the 50 United States, the District of Columbia or Puerto Rico, and have purchased a product containing CBD within the past six months. They completed a 32-question online survey. The sample reflected US population demographic characteristics divided evenly between age groups. The first thing we asked respondents was how long they’ve been using products containing CBD. We learned that this is a pretty new behavior for most respondents. Almost three quarters – 74% – of respondents have been using CBD products for two years or less. We asked users how they first learned about CBD. In the top spot, 40% of respondents reported learning about CBD from friends and family recommendations. Referrals from healthcare professionals and social media tied for second place with 11% each. So what are consumers actually using CBD for? Turns out it’s a lot of things. To support our analysis, we aggregated the results from the 37 potential indications selected and grouped them into six categories. First of all, well over one-third of all respondents – 38% – are using CBD products for mental health or to treat neurological disorders. This is especially true of respondents aged under 35. Female and male respondents are equally likely to use CBD to treat anxiety, stress, and depression. Respondents aged 18 to 34 represent almost half of all users in this category. And among respondents using CBD for mental health and neurological disorders, 35% have been using CBD products for less than one year. One third of all respondents seek out CBD for its pain-relieving properties. Respondents identifying as female are more likely to use CBD for pain relief. Respondents aged 55 and older represent over one-half of all users in this category. The third most popular use of CBD is for sleep and relaxation with 36% of respondents identifying this indication. This is an important use of CBD products for respondents age 35 to 44 and those age 65 and older. Half of the respondents selecting indications in this category have been using CBD for less than one year. Respondents identifying as male are most likely to use CBD to aid sleep and relaxation. This could be as a result of trying traditional over-the-counter products and not being satisfied with the results or just wanting to avoid prescription sleep medications, which have well-documented side effects. Eighteen percent of respondents are using CBD to treat medical conditions. Of the respondents that selected indications in this category, 63% identify as male. Over one-quarter of respondents using CBD to treat medical conditions at aged 45 to 54; over one fifth are aged 55 to 64. The penultimate category of CBD use that we analyzed for the study is the catch-all “other” selected by 11% of respondents. This includes use of CBD for a pet, sexual health, recreational, and spiritual use, to aid sports performance or post-exercise recovery. Respondents identifying as male are significantly more likely to use CBD to treat other conditions. Eight percent of respondents selected the indication “for a pet.” As is the case with their owners, the primary indications for CBD use on pets are anxiety and stress plus joint and muscle pain. Selected by 8% of respondents, the final category of CBD use is beauty and to treat skin conditions. This category reflects both the use of CBD as part of a general skin care regimen, as well as the treatment of specific conditions that can affect both men and women. Almost one-third of the respondents using CBD for indications in this category are age 45 to 54. One quarter are aged 35 to 44. Overall, reflecting the inclusion of skin conditions as well as general beauty skincare products in this category, respondents identifying as male are as likely as females to select these indications. However, focusing on beauty and skin care use, 59% identify as female 39% as male. To help us unpack these findings, it’s my pleasure to welcome a special guest to the podcast. Alexandra McClay is an experienced consultant and business development professional working across large global brands as well as early stage startups within the beauty and wellness industries. Previously in leadership roles with Johnson and Johnson, Elizabeth Arden, and Burt’s Bees, today Alex is spearheading all commercialization activity for a new consumer brand in the CBD and supplement space. Welcome to IN CLEAR FOCUS, Alex!
Alexandra McClay: Thank you. Pleasure to be here.
Adrian Tennant: So what first sparked your interest in CBD as an ingredient for beauty and wellness products?
Alexandra McClay: My first interest was sparked quite frankly, on a personal level. Once I found out that my mid-70 year-old father was using CBD on a daily basis, it piqued my interest. And so I quickly started to kind of study up on the benefits of CBD and started to become sort of a connoisseur of taking CBD myself. And from there, you know, really just looked at all the multi benefits of this new active ingredient and what it could do for the industry that I’ve been in my whole career – in beauty and wellness. And so from there, as I continued my journey and educating myself in this space, I was bridged to large cannabis companies that were looking to develop branded products within the beauty and wellness space. And from there, everything just sort of started to explode.
Adrian Tennant: Well, CBD use has exploded since December 2018, when, as I mentioned in the intro, the federal government legalized regulated production of hemp with the Farm Bill. This year, sales are estimated to be around $5 billion. What’s contributing to this continuing growth?
Alexandra McClay: I think it’s a few different things. I think you’ve got large conglomerates that are getting into the space and that are partnering with big beverage or food companies. You’ve got smaller players that are coming to this space, sort of like indie brands, like Lord Jones that is catching the attention and the eye of celebrities. They’re starting to use the, you know, the foot cream for when they wear stilettos on the red carpet. And I think all of this together, you’ve got consumers that are already what we’ve called “Canna-curious.” And so all of this groundswell is kind of making CBD become a little bit more mainstream and you see the celebrity endorsements that are starting to help make it a little more mainstream.
Adrian Tennant: Now for listeners who are not familiar, can you describe the different types of products that CBD is most commonly available in?
Alexandra McClay: Sure. So typically you’re going to see CBD in what we call topicals. So anything you’re putting topically onto the body or your skin, or even potentially hair, and that would be in the form of gels or creams, lotions, even washes, there’s bath bombs. We started seeing things like scrubs. And then the ingestibles, which is anything you’re going to take orally – and that could be in a pill format, it could be a powder you mix in a drink. One of the most popular formats is in a tincture, which would either be an oil-based or water soluble, which you take underneath the tongue. And then you have other products like gummies, chocolate, other formats that you can ingest as well.
Adrian Tennant: The rising popularity of CBD products has also brought greater scrutiny from the US Food and Drug Administration, which last November issued warning letters to 15 companies for illegally selling products containing CBD. But given the significant level of interest among consumers, where does the FDA stand on this now?
Alexandra McClay: Great question. So first I want to clarify that the companies that were selling the CBD who had warning letters, were not necessarily selling it illegally. What they were doing was making claims that were illegal. So, hemp-derived CBD is legal, but you cannot claim things that are egregious like cures cancer or any of the multitude of other things that some of the companies are misleading consumers on. And so then you’re going to get into an issue with the FDA or even the FTC. My understanding right now, if you talk to the experts in the industry, is that the FDA has not yet ruled. They want to see more research, but the trend in the area in which the direction they seem to be going is treating CBD as a dietary supplement. As you would a melatonin, a vitamin C, other dietary that you would take as a dietary supplement. And any of the legal experts – and I have been working with the legal counsel as I’ve been developing this brand – their coaching is to follow all the guidelines, the labeling requirements, the product claims the ingredient listings as a dietary supplement, and then you’ll be considered to be the most compliant as it relates to any regularity.
Adrian Tennant: It’s a fast growing market full of opportunities, and you’re currently developing a new consumer brand, including some products that contain CBD. So Alex, how do you navigate this landscape with the continuing uncertainty around its regulation?
Alexandra McClay: That’s a great question. And I think what we’ve done is we’ve consulted with different bodies, whether it’s legal in the label, review, regulatory, and really are trying to understand what I’ll call the big gray area and understanding where we fall within that gray area. With our brand, we’re trying to be as conservative as possible, and we’re not making egregious claims where not warranted. But if there’s another active ingredient that is an FDA monograph ingredient, for example, mentor or camphor, we are labeling it as such as an OTC product and following the FDA guidelines. The CBD that’s within it is just sort of another active ingredient. So hopefully that’s clear, we’re trying to follow what we anticipate to be the guidelines by the FDA and not do anything that would put us on the radar as stating anything that might be egregious or above bounds of what we’re currently seeing in any FDA OTC monograph product.
Adrian Tennant: Let’s take a short break. We’ll be right back after this message.
Dana Cassell: I’m Dana Cassell, Bigeye’s Senior Strategist. Every week, IN CLEAR FOCUS addresses topics that impact our work as marketing professionals, often inspired by data points reported in consumer research studies. At Bigeye, we put audiences first. For every engagement, through our own research, we develop a deep understanding of our client’s prospects and customers – analyzing their attitudes, behaviors, and motivations. We distill this data into actionable insights to inspire creative brand-building and persuasive activation campaigns – with strategic, cost-efficient media placements. If you’d like to know more about how to put Bigeye’s audience-focused insights to work for your brand, please contact us. Email email@example.com.
Adrian Tennant: Welcome back. We’re discussing the results from Bigeye’s 2020 National Study of CBD Use. I’m joined Alexandra McClay, beauty and wellness expert. You’re focused on the beauty and wellness space. Are there any special considerations for how products containing CBD designed for application to the skin need to be formulated?
Alexandra McClay: Absolutely. And what we’re doing that we think is a little unique and proprietary is that we actually have some technology and some patented delivery systems that are enabling us to formulate in a new and more novel way, with the CBD. Mainly a lot of CBD you’re going to see is going to be an oil-based. And it’s problematic if you want to have a water based formula, for any type of skincare products or even vaginal lubricants, it’s more natural to be a water-based. And so we have a water soluble, a sort of nanotechnology. We also have a delivery system that helps penetrate deeper into the skin that is more efficacious, in terms of the delivery method. And so you’re going to get faster, better relief, but it’s a little more challenging to formulate with because it is a powder and it’s an encapsulated powder. And it can at times, kind of tweak the formula in terms of the scent or the aesthetics. And so we do have to play around quite carefully with the different aesthetics. It also helps to have a very high quality CBD, but at times a higher quality CBD might have more of that hemp aroma. It takes a long time and a lot of careful consideration, to really design something that you’re putting on the skin because you want it to not only feel great, smell great, but work really well.
Adrian Tennant: Are there any considerations too, for shelf life with CBD, compared to other types of ingredients?
Alexandra McClay: Yes, absolutely. Anything that you’re going to do really in terms of skincare and cosmetics, you’re really looking at a one- to two-year shelf life regardless. CBD you’re you should be doing – if you’re doing the formulation work properly – it should be third-party tested and should be viable for one year. And you should be able to provide those third-party lab tests directly to the consumers to provide transparency and traceability. But in general, we’re looking at a 12- to 24-month shelf stability.
Adrian Tennant: How do you determine what is an appropriate amount of CBD to be included in a product?
Alexandra McClay: Great question. It really depends at the end of the day, what you’re trying to solve for – what is that need state? So for something that I might put into a facial oil, that’s really about greatest aesthetics, anti-inflammatory, antimicrobial, I probably would put in a little bit less milligrams in terms of that strength, especially since it’s going to be used daily. Then if I know that I have a topical pain relief product that is going to address acute joint pain, then I’m going to want to put a very strong amount of CBD into that type of product versus a facial cream or oil.
Adrian Tennant: Are there any issues that you found around combining CBD with other ingredients?
Alexandra McClay: You know what? I have not. The biggest difference that I’ve found in doing anything in terms of formulations topically is the challenges with oil-based versus a water soluble. The oil can be challenging in that it does tend to separate, and it definitely needs to work in concert with other ingredients, but it does formulate very nicely with other botanical natural oils. And so what you get is this wonderful sort of recipe and cocktail of other ingredients that also have key known properties similar to CBD. So if the goal is anti-inflammatory, I may be using other ingredients that also have strong anti-inflammatory products. So it’s not just CBD standing on its own, but working in concert.
Adrian Tennant: Just last month, lifestyle guru Martha Stewart launched her own CBD wellness line in partnership with a Canadian company, Canopy Growth Corporation. Sold online through Canopy’s site, the line includes flavored oils, soft gels, and gummies – apparently inspired by French baked goods including blood-orange cheesecake, berries, and cream tartlets – sound delicious! Alex is Martha Stewart’s involvement designed to appeal to an affluent female demographic do you think, or is it more about connecting with Boomers?
Alexandra McClay: That’s a great question. I think specific to Martha Stewart, her brand I think really does span across multiple generations through some of the partnerships and work that she’s done with Snoop Dog. I think there’s a Boomer appeal. There’s certainly a Gen X appeal, which is my generation, who grew up listening to Snoop Dog. So I really think that in general, when these large companies are looking to utilize, whether it’s Martha Stewart or Rob Gronkowski or any of the other celebrities, I think it really is about one: dispelling, any myths, making CBD sort of mainstream, and also it’s about what size of a megaphone does that give you as a brand? I don’t recall the exact number of followers that Martha has, but it’s in the millions in social media. And with some of the restrictions that are placed on advertising for CBD, having a celebrity who can speak to the masses just helps generate that brand awareness as well as creates a comfort level for people who are canna-curious and want to jump into trying the products.
Adrian Tennant: Well, Martha Stewart is not the only celebrity to be getting on board with CBD as you mentioned. Willie Nelson and golf legend Greg Norman also have their own CBD brands, both belong to the Boomer generation, which is redefining what it means to age. In our study, we also captured information about respondents’ pastimes and interests, and we did find that regardless of age or generational cohort CBD consumers are more likely than average to take multivitamins, natural supplements, and to meditate. How do you think CBD fits into this trend toward health and wellness?
Alexandra McClay: I think that my understanding is that people are, they call it “50 is the new 30”, their life expectancy is longer than ever. The interest and the need for overall health and wellness is at peak levels. And what goes along with that is trying to have the most natural, I think, health solutions possible. We see this within food. We’ve seen this within the personal care and beauty industry. It doesn’t surprise me that these consumers are taking more vitamins and natural supplements and meditating. They’re looking for alternatives. My belief is they’re looking for alternatives to taking OTC – over the counter – or prescription medication. And CBD being a plant-based solution, provides them the ability to do that and have a lower bio burden or body burden. And it’s going to be more efficacious and healthier in the long run. So it’s not surprising that CBD goes hand-in-hand with some of these other natural wellness solutions.
Adrian Tennant: We learned from our study that over one-third of CBD users are concerned about the potential for scams and black market companies. While another third are concerned about a lack of quality control. What do you think needs to be done to reassure consumers about the safety and efficacy of CBD-based products?
Alexandra McClay: I think it’s a really valid concern because we are in an unregulated sort of territory right now until the FDA comes out with their specific guidelines and rulings. What I would suggest is that people need to do their own research. You can look at other governing bodies. The American Arthritis Association has put out their guidelines around buying CBD products. You want to make sure that you are looking at products that have been third-party tested. So you have the traceability and the transparency of where the ingredients are coming from and what the lab results are saying. I think you want to see labeling that is clear. Ingredient lists that are comprehensive. And, you know, look to the website to make sure that this is a brand that has a FAQ section, maybe a CBD 101, are they providing content and helping to educate consumers that are curious about CBD.
Adrian Tennant: We asked users how much, on average, they spend on CBD products per month in total. In the full report, we break the results out by condition, but the key data points are that over two thirds – 67% – of CBD users spend up to $99 per month on products containing CBD. Over one quarter – 26% – spend between $100 and $199 monthly. For the most frequent indications, consistently around one-third of CBD users spend $50 to $99 per month. The full report, which you can download for free from our website, provides more details about the attitudes that characterize different groups of CBD users and identifies which factors are most influential in their decision to purchase and use each category of product. We asked survey respondents how likely they are to continue using products containing CBD long-term. It’s very clear that existing CBD users are true believers in its efficacy. 88% are somewhat or extremely likely to continue using CBD long-term. An estimated 18% of the US adult population is currently using CBD. But if those 88% plan to continue doing so long term, the other 82% of the US market represents an untapped opportunity. Alex, was there anything in our CBD report that stood out to you or that surprised you?
Alexandra McClay: I think what really surprised me the most was that there’s still a relatively low percentage of the population who have tried CBD at this point in time. You know, I think there was a statistic that 74% of the folks who have tried CBD have done so just within the last two years. So this is an industry that’s really in its infancy. And we know that people also stated in your report that they intend to use these products in the long-term. I was really sort of encouraged, but also surprised to see like the more people that enter in, and then the more people that enter in that are going to continue with the long-term use, it really just provides huge growth potential in this industry, in this sector.
Adrian Tennant: Alex, thank you so much for joining us today to discuss the results from Bigeye’s 2020 National Study of CBD Use.
Alexandra McClay: Great, take care – thank you!
Adrian Tennant: My thanks to our guest this week, Alexandra McClay, beauty and wellness expert and company founder. You’ll find a link to the CBD report on the IN CLEAR FOCUS page at Bigeyeagency.com under “Insights.” Just click on the button marked “Podcast.” If you haven’t already, please consider subscribing to the show on Apple Podcasts, Spotify, or your favorite podcast player. And remember if you have an Amazon Echo device, you can use the IN CLEAR FOCUS skill to add the podcast to your Flash Briefing. Thank you for listening to IN CLEAR FOCUS, produced by Bigeye. I’ve been your host, Adrian Tennant. Until next week, goodbye.