The U.S. CBD market is reaching a pivotal moment where the first-movers continue to generate significant revenue, larger manufacturers enter the space, driving increased market activity and swallowing up market share, and more brands of all sizes start to find their own specialized consumer segments through integrated brand and market entry strategies. As the market continues to grow, companies need to prioritize their points of differentiation in an increasingly saturated market by identifying hyper-targeted consumer segments and working to ensure their brand resonates as much as possible. Once consumers are identified, how they are reached is absolutely critical. Opportunities for online advertising are currently limited due to Google and Facebook's policies and this has proven to be challenging for many brands coming online, leading them to leverage SEO and creative approaches to social media to influence consumers.
cbdMD, one of the leading brands in the industry and the only pure-play CBD company on the New York Stock Exchange, has approached the market in a unique way. One highly publicized event in the press has been an endorsement with Bubba Watson, the professional golfer, but the companies’ efforts did not stop there - cbdMD has worked to identify and create partnerships with a variety of athletes across the spectrum, only working with those who actually use the products. This has enabled them to gain greater penetration and trust with a sports fan consumer base as well as normalizing CBD use for sports viewers – who may not be athletes themselves, but rather regular people who suffer from many of the ailments these products are being used for by their role models.
Additionally, cbdMD has gone after another market completely separate from that associated with sports: Pets. By leveraging high-engagement accounts on social, and the ever-growing internet culture around animal pictures and videos, cbdMD has been able to get visibility in one of the fastest growing product segments. In fact, our data shows that the CBD pet market is expected to grow to over 12 times its 2018 size this year, producing $401 million in sales. In addition to their pet product sales, this approach to the market enables them to target both pets and their owners, who often come to their site to buy for their pets and stay to purchase items for themselves.
Through these partnerships and social strategies, they have also engaged in numerous PR and charitable efforts to gain additional visibility and consumer trust. They are the official founder of National CBD Day (8/8) & National Hemp Day (2/4) and it is this combination of awareness across a large variety of platforms and mediums that has enabled cbdMD to steadily grow revenue.
As more people become aware of CBD and educated on its use cases, they will expect the brands they purchase from to be present and active in the realms of their own personal interests. Our consumer insights show that both Fitness and Pets are two primary topics of CBD-related conversation, indicating that cbdMD has struck a chord with two very different, but passionate, consumer segments, which has led to rapid growth. Companies look to further penetrate mainstream markets beyond first-to-market, natural health-oriented consumers. Trend followers should look to emulate cbdMD’s efforts, using creativity and strategy to move forward - despite hurdles presented by often outdated or misinformed advertising and marketing policies - and effectively reach target consumers who otherwise would not know about nor seek out CBD products.
