By Beau Whitney, Senior Economist, New Frontier Data
There are some key findings in New Frontier Data’s recently published The EU CBD Report: 2019 Overview that are notable regarding both CBD and industrial hemp when it comes to consumer purchases and consumer sourcing. In many ways, sourcing and purchasing behaviors seen in the European Union (EU) are like those occurring in the United States. While consumer decisions are reflections of respective regulatory regimes' constructs, as well as each individual country’s cultural influences at hand, there are distinct parallels between the U.S. and EU markets.
Regardless, as referenced in the report, there is a growing general awareness about CBD in the EU, as the benefits of using CBD are becoming better known and more enticing for the public. Consumers are sharing information amongst themselves, which serves as a major source of education drawing consumers to the market. In fact, 63% of respondents who had been recommended CBD were done so by a friend, followed by a family member’s making the suggestion (28%). Given the lack of data on the market, word of mouth remains the dominant source for education about such products. As the market matures and more mainstream promotional and advertising outreach comes online, that is expected to change.
Not only do friends routinely introduce CBD to consumers, but they represent main sources for both supply and brand information, too. Based on the EU data, 55% of CBD purchasers stated that friends influence their CBD purchasing decisions. Once a consumer has begun making purchases, friends and family remain influential when it comes to switching brands and otherwise adjusting their purchasing patterns. Though price is the most influential determinant (40%) for switching brands, friends' influence rates a close second (at 33%).
The EU market has parallels to the U.S. market in that friends and family are heavy influencers in creating awareness about CBD products and which types of products to buy. For example, CBD products are primarily sourced via online or direct-purchasing channels (based on New Frontier Data’s The CBD Report: 2018 Industry Outlook). The U.S. market data is in the process of being refreshed and will reflect the influx of retailers in this space; since the EU’s is a more mature market, it has more mature distribution channels than in the U.S.
New Frontier Data plans to provide more market analysis about both CBD and industrial hemp throughout the course of 2020.
The preceding article is from one of our external contributors. It does not represent the opinion of Benzinga and has not been edited.