While CBD has proven to be a boon in the consumer packaged goods market, the opportunity for manufacturers and retailers is not limited to humans: there is a growing market for CBD in the pet segment.
According to the 2020 Pet Industry Green Paper by Nielsen and Headset, hemp-based CBD pet products will represent 3%-5% of all hemp CBD sales within the U.S. by 2025. In fact, joint projections show that the pet sector may yield one of the highest conversion rates within the consumer packaged goods (CPG) industry (37%).
Almost three-quarters of current CBD consumers have pets, and almost one-quarter of U.S. pet owners already use CBD for themselves, their pets, or both, noted the report. Nearly 26% of U.S. adults with dogs are using hemp-CBD products. Half of those already use CBD for their dogs, while the other half only use it for themselves.
“The perceived positive effects of cannabis and CBD have created new markets, reinvigorated traditional CPG categories and also fueled legalization efforts,” said Cy Scott, founder and CEO of Headset, an analytics service provider for the cannabis industry. “It’s no surprise that cannabis and CBD are becoming a popular way to treat pets naturally, driving another exciting market category for cannabis while energizing the pet industry.”
Across the array of products in the hemp-CBD realm, tinctures (plant material dissolved in ethanol), powders and gels have the highest median selling points. As with traditional supplements, prices increase as potency, purity and quantity increase. For example, consumers can buy a 330 mg bottle of dog formulated full-spectrum CBD extract including 100 mg of active CBD oil for as low as $24.99. That potency is typically recommended for small breeds. For larger breeds and larger animals, such as horses, consumers can expect to pay as much as $220 for products with 1,200 mg of active CBD oil.
In looking at hemp-CBD opportunity across the two most common household pets, there is greater pricing and sales opportunity for dogs than cats. That opportunity is primarily based on animal size, as dosages and potencies are typically lower for smaller animals.
To date, tinctures account for nearly 70% of the hemp-CBD pet products researched for the Pet Industry Green Paper, which suggests greater opportunity across powders, gels, treats and topicals.
“Understanding the dynamics at play in the cannabis space and their impact on the pet industry is critical,” said Maria Lange, vice president of strategic initiatives at Nielsen. “Despite open questions around regulations, hemp-CBD is exploding in the pet space.”
This piece originally appeared on Supermarket News, a New Hope Network sister website. Visit the site for more grocery trends and insights.