POS & Back O ce

Consolidation Impacts CBD Market

C-stores are seeing success with cannabidiol (CBD) in 2022, despite overall dollar sales dips around 20%, according to IRI U.S. convenience data for the latest 52 weeks ending Dec. 26, 2021.

“What we saw in 2021 was not as explosive of growth in the market compared to years past,” noted Brightfield Group Senior Insights Manager Brian Maclver. “There was a lot of consolidation. … At the peak, (there were) 3,500 brands in the CBD space. That’s cut down to roughly 2,000 now, and more consolidation is coming in the year ahead.”

Brightfield Group projects the convenience and gas station CBD market will hit roughly $221 million for the 2022 year and $449 million by 2026.

At Waltham, Mass.-based Global Partners’ stores, topical CBD is “down significantly,” said James Bryan, the convenience chain’s category manager of HBC, CBD and grocery. But edible/ingestible CBD is growing in the states where Global Partners sells it: currently Connecticut, Rhode Island and Vermont, with New York planned for 2022. Overall, the company operates approximately 1,700 locations, primarily in the Northeast.

Best-sellers for Global Partners’ Alltown convenience stores are gummies. “And what I’ve found,” Bryan said, “is a price point anywhere between $5 and $10 is the sweet spot. … I think it’s just very much impulse-driven.”

U.S. CbD Market Size Overview

Source: Brightfield Group, US CBD Market Industry Update, 2021

FAMILIAR FORMAT

Following the U.S. Postal Service’s ban on vape shipping, CBD electronic smoking device dollar sales were up a massive 500% at c-stores, according to IRI data.

Still, Brightfield Group’s MacIver noted that the overall CBD space is trending more toward gummies. “The bulk of the growth is in the edible sector right now,” he said.

MacIver attributed this trend in part to the familiar format of gummies, plus the overall move toward wellness. “Some of the main reasons (people) consume CBD is for physical relief, relaxation and sleep,” MacIver noted. “Just under 50% (of CBD consumers) are daily users. And what that tells me is that people are integrating these CBD products into their daily wellness routines. If you look at, for example, the vitamin space, a lot of those are soft chews now, with those fruit flavors. So a CBD gummy is something (consumers are) familiar with because they have those products in the vitamin space.”

Another form of CBD primed for growth in 2022 is drinks, which is expected to take up about 10% of the c-store CBD market size this year. “(Brightfield Group is) projecting that at $44 million for 2022,” MacIver said, “and we’re looking at $1.3 billion (overall) by 2026, with convenience and gas stations capturing roughly $151 million of that market.”