US: Marijuana is driving innovation in drink markets
Cannabis-infused drinks are set to become more widely available. Investment in the marijuana market is increasing as legal recreational use of the drug becomes more widespread, according to GlobalData, a leading data and analytics company.
The latest high profile investor is Constellation Brands, the distributer of Corona beers in the USA, which has just bought a controlling stake in a Canadian marijuana company in order to develop cannabis-infused alcoholic drinks.
A spokesperson from the GlobalData Consumer Analyst team, says: ‘‘We believe that Constellation Brand’s investment in Canopy Growth Corp, a marijuana growing company, is a sign that the market has potential. Widespread legalisation is making marijuana a trending ingredient, driving innovation in food and drink markets. As a result, the move to enable them to develop cannabis-infused drinks is a good one.’’
However, alcoholic drinks companies need to think beyond just flavor innovation when weighing up investments in the marijuana market. The legalisation of recreational marijuana presents a threat, as drinkers may swap alcohol for cannabis. Drinks companies may therefore lose sales to cannabis brands.
Consumption occasions for alcoholic drinks and recreational cannabis products overlap, such as the desire to relax or to celebrate. Whilst this increases the likelihood that alcoholic drinks could be substituted by cannabis, it also means drinks brands can move into this space without diluting what their brand stands for. Cannabis is therefore a natural extension for many alcoholic drinks brands.
Alcoholic drinks companies need to see cannabis as an opportunity, and not a threat. Consumers are increasingly in favor of legalising recreational use. Early investments in this category, such as that by Constellation Brands, will leave companies better placed to target this growing market.