CannabisNewsWire
Editorial Coverage: CBD-infused beverages look set to hit the
market in a big way in 2019.
- Cannabidiol (CBD) is widely used in health and wellness
products after spectacular growth in recent years.
- Several companies are lining up to launch CBD drinks following
legal changes in the United States and Canada.
- Integrating these new offerings into wider product lines is
accelerating CBD’s race for mainstream attention.
Youngevity International Inc. (NASDAQ: YGYI) (YGYI
Profile) is one of the first to launch, with a CBD
coffee coming in May and a CBD water in the works. The
Alkaline Water Company Inc. (NASDAQ: WTER) (TSX.V: WTER),
which is constantly growing its U.S. distribution network, plans to
add a CBD bottled water to its range. The New Age Beverages
Corporation (NASDAQ: NBEV) is adding CBD to its line of
organic cold coffees and teas. Heineken (OTCQX:
HEINY) has also entered the market by developing a
cannabis-infused sparkling water through Lagunitas, its U.S. craft
brewer. And the biggest investment in the overall cannabis space
has come from Constellation Brands Inc. (NYSE:
STZ), which has invested $4 billion in a Canadian cannabis
company.
To view an infographic of this editorial, click here.
Crossing the Boundary Between Two
Industries
The most exciting new developments in business often come when
separate trends or industries combine. For example, it was the
combination of previously separate cameras, phones and portable
music that brought us the smartphone, a technology that has
transformed our lives. And while not every combination will be as
socially disruptive as that computer in your pocket, each one
brings new possibilities.
One of the hot crossover moves this year is the combination of
the markets for beverages and for cannabidiol (CBD). The emergence
of CBD over the past few years has transformed the cannabis space
and allowed hemp producers to reach beyond their original markets.
Beverages continue to be a powerful industry, in part through
sporadic bursts of innovation such as the rise of energy drinks.
Now one of those bursts is coming again as these two trends combine
to produce CBD-infused drinks.
The Rise of CBD
In many ways, the popularity of CBD has caught businesses by
surprise. Only a few years ago, it was an obscure chemical compound
found in cannabis and hemp, not even the part of cannabis that got
users high. Now it’s a newsworthy growth industry, with CBD
products appearing on the shelves of health shops, pharmacists and
vaping stores, as well as on dedicated online outlets. The trend
has also led to the rise of new companies as well as investment
from the likes of Youngevity
International Inc. (NASDAQ: YGYI). CBD isn’t
everywhere yet, but it’s feeling close.
Though it wasn’t predictable, the rise of CBD is easy enough to
explain. Since cannabis legalization began in the 1990s, extensive
research and development has been conducted regarding the plant.
One of the results is a greater understanding of and focus on the
range of chemicals found in cannabis, instead of just the
high-inducing THC. As researchers started finding and reporting
evidence that CBD could be beneficial for health and wellness, a
gold rush began.
One of the big advantages of CBD, especially for an
omnidirectional lifestyle company such as Youngevity, is that it
can establish a strong presence in markets that THC can’t reach.
Shops that don’t sell cannabis are sometimes willing to stock
CBD-infused products. Some jurisdictions allow the sale of CBD but
not cannabis. With the cannabis space gaining momentum, CBD creates
a route into that sector with fewer restrictions.
This is particularly true because of hemp, a form of cannabis
that doesn’t contain THC and that the federal government legalized
three months ago. CBD can be extracted from hemp, making it a
profitable cash crop. A Youngevity subsidiary has recently acquired a 45-acre base in Florida purely for
the purpose of meeting the demand for CBD.
CBD Beverages
The U.S. government’s widespread legalization of hemp through
the passage of the 2018 Farm Bill last December has opened the way
for a whole range of CBD endeavors. One of the most popular trends
is expected to be CBD beverages.
Youngevity, which already has a strong presence in both
beverages and CBD via its CLR Roasters and
HempFX brands, has made the most of its
established expertise to move quickly into this promising young
market. The company has added a CBD-infused coffee to its
Javalution coffee brand, which will go on sale at
the end of May.
“We are extremely pleased with the taste of the product,” said
Ernesto Aguila, president of CLR Roasters. “It is very exciting to
bring a new product to market that has so much interest within the
coffee beverage category. I have not seen a door opener like this
since Javalution Coffee Company created the first fortified
coffees.”
CBD beverages are more than just a novelty; they’re a way to
make CBD consumption better fit with people’s everyday lives and
socializing, and to blaze a trail for cannabis drinks to follow. By
putting CBD in drinks, manufacturers such as Youngevity are making
it possible for consumers to enjoy their CBD in common social
settings, such as cafes, bars and restaurants. While one person
orders an alcoholic drink and another sips a soft drink, a third
could be enjoying a CBD drink, all at the same time. YGYI’s move
helps brings CBD consumption into the mainstream.
YGYI’s strategy has been made easier by the relaxed approach of
the FDA. While that authority claims jurisdiction over the use of
CBD in food and beverages, the government entity hasn’t done much
to limit its use. In the 21st century, the public will
to suppress cannabis use is fading, and resistance against CBD
appears to be almost nonexistent. A door has been opened, and
companies such as Youngevity are walking in to make the most of
it.
The Bigger Beverage Business
Part of bringing CBD into the mainstream is integrating it with
other product lines. As long as CBD is separate in its own corner,
persuading people to give it a try will be challenging. However,
when it’s presented as simply one more option among a variety of
beverages, raising awareness and use of the substance stands a
better chance. That’s precisely what Youngevity is aiming to do
through a recently announced
agreement with water company Icelandic Glacial.
The deal will see the two companies work together as exclusive
cross-marketing partners for the next three years. Icelandic
Glacial drinks will appear alongside Javalution and other beverages
in Youngevity’s direct-sales network.
Beyond this, the companies will also collaborate on creating new
products targeting the lifestyle, health, food and beverage
markets. A drinkable CBD product will be at the forefront of these
developments, creating a connection between the purity of Iceland
Glacial’s water and the relaxing potential of CBD.
This deal hasn’t just increased Youngevity’s product range. It
has given the company more opportunity for growth and product
development that will appeal both to the core CBD market and to a
wider beverage consumer base.
A Changing Drinks Market
It seems that CBD might become the latest big disruptor in the
beverage industry, which was last shaken up by the rise of energy
drinks 20 years ago.
The fastest growing premium water brand in the US, The
Alkaline Water Company Inc. (NASDAQ: WTER) (TSX.V: WTER),
is distributed through more than 150,000 stores, including nine of
America’s top-ten retailers by size. In 2018, the company announced
a range of drinks targeting the health and wellness markets,
including a water infused with vitamins and minerals and another
with CBD. The company is waiting on FDA approval before launching
its CBD water, but once the product is ready to go, it will have
great reach thanks to the company’s strategy of regularly increasing its distribution network.
Founded in 2016, the New Age Beverages Corporation
(NASDAQ: NBEV) is a young and vibrant company with a focus
on healthy drinks produced in an environmentally and socially
responsible way. In January, the company announced a deal for the distribution of CBD-infused beverages
under its Marley brand. The Marley range of organic cold coffees
and teas is already an established brand for New Age Beverages and
a natural fit for entering the CBD market.
Hi-Fi Hops, Heineken’s (OTCQX: HEINY) cannabis
beverage, was launched last
year in two versions: one with 10 mg of THC and one with 5 mg
of THC and 5 mg of CBD. The product is sold in California’s
cannabis dispensaries and is the result of a collaboration between
AbsoluteXtracts, a manufacturer of cannabis-based products, and
Lagunitas. “The idea of being a part of a no-calorie beverage
infused with cannabis seemed like a perfect next step in our
product innovation and a natural way to marry our past with our
future,” said Lagunitas CEO Maria Stipp.
Beverage giant Constellation Brands Inc. (NYSE:
STZ), which owns Corona beer and Svedka vodka, has made
the biggest financial commitment so far to advancing CBD beverages.
The company has invested $4 billion in Canopy Growth Corporation,
one of Canada’s largest cannabis producers. The two companies will
be working together to produce cannabis drinks, giving the sector a
significant boost to its public profile thanks to Constellation’s
marketing reach.
CBD drinks are a natural combination of two popular consumer
sectors, and with so many companies invested in them, this looks
likely to be the year they take off.
For more information on Youngevity, visit Youngevity
International, Inc. (NASDAQ: YGYI)
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