The CBD beauty industry could be worth $25 billion globally in the next decade, according to a report from Jefferies. Here’s what we think our industry should take away from this report.
Guest Post by Peter Horvath, CEO, Green Growth Brands
A recent report from equity analysts at Jefferies makes a bold claim: sales of CBD beauty and personal care products could reach USD$25 billion globally in the next 10 years. And I’m not surprised. As creators of CBD skincare and beauty products, we see demand growing, literally, every day. Here’s what I think are the five most important takeaways from this report — and what consumers can expect from this new wave in the beauty industry. (We’re excited, to say the least.)
- Legalization Drives Interest
The legal U.S. cannabis market is close to $10 billion already and could grow to $60 billion by 2025, according to Euromonitor. Since 2014, search trends for CBD alone have grown over 2,400 percent, When the Farm Bill passed in December 2018, making CBD and hemp products federally legal, interest really took off — despite the fact that other cannabis products remained illegal. And online search patterns regarding cannabis correlate directly with markets where cannabis regulations are relaxing. Clearly, people are curious.
Within the cannabis industry, women represent the fastest growing customer demographic. Particularly within the beauty industry, attracting and retaining women consumers is critical to brand success. That’s why our company is creating brands by women, for women — that men can also enjoy.
- A Focus on Wellness
Consumers’ continued interest in wellness, natural ingredients and medicinal benefits have sparked curiosity about CBD. However, what’s not in products is just as important as what is in the products. Consumers want natural ingredients that will make a difference on their appearance and overall health, without sacrificing on product quality and experience.
CBD is also benefiting from the lasting trend of “super” ingredients in food and other industries. According to Jefferies, CBD is generating interest based on strong anecdotal feedback from users about its therapeutic outcomes and benefits, such as its anti-inflammatoryand antioxidant properties. While this feedback hasn’t yet been proven through formal clinical trials, CBD has gained credibility (and celebrity endorsements) within the skincare industry.
Green Growth Brands’ own CBD brand, Seventh Sense Botanical Therapy, works hard to educate customers about CBD and other ingredients in the products they purchase. On the Seventh Sense website, we list ingredients for each product, and we dive into the benefits of the specific botanicals we’ve chosen. We use transparency and education to earn their trust in Seventh Sense as a beauty and skincare brand and as a high-quality CBD brand.
- Consumers (and Influencers) Want Results
Like other beauty and skincare trends, influencers and beauty content creators are leading the CBD trend. According to Jefferies, these influencers are usually around three months ahead of the general public. And as with other beauty trends, influencers expect the products they endorse to deliver results, because their followers place so much trust in them and their recommendations. And followers are a precious commodity – lose their faith and they’ll lose their numbers. So CBD beauty products need to be more than just new and different – they need to demonstrably effective to build believers online. CBD skincare is searched four times more often than CBD makeup—consumers are clearly more interested in potentially powerful effects than in merely aesthetic benefits.
While CBD beauty industry is also being driven by consumers’ interest on the medicinal benefits of these products, scientific claims around these products can be risky. Jefferies compares CBD to SPF: the results may be validated, but not yet scientifically and clinically proven. For creators of CBD beauty products, the challenge then becomes discussing the power of these products without making unsubstantiated medical claims.
Our approach has been to create a range of products that are impactful on their own, with CBD as an added benefit. Every Seventh Sense product contains natural, carefully selected botanical ingredients that make a meaningful and noticeable difference in consumers’ daily routine. And we offer a spectrum of products, from body lotions and muscle care balms to a new line of creams, sprays and oils for nighttime sleep routines.
Jefferies also notes that CBD beauty products may not significantly expand the beauty market; instead, if proven more impactful, CBD products may simply replace consumers’ non-CBD products. But I don’t quite buy that. I believe that by creating exceptional retail experiences and high-quality products, the industry may expand to attract new consumers who might otherwise have shopped for these types of products.
- The Impact of Digital Platforms
The metrics don’t lie. Online search trends for CBD beauty increased by about 240 percent over 12 months, and overall search activity for CBD has focused heavily on skincare. While many trends in beauty and skincare peak and disappear, CBD is tracking differently. Compared to other beauty trends, CBD has had a slower and steadier build, suggesting CBD may be more sustainable than other trends in the long-term. Smart CBD companies have turned these searches into clicks, particularly on sites that combine both education and multiple product options.
Despite influencers leading interest in CBD beauty, social media presences for CBD brands remains relatively small compared to other beauty brands. One CBD brand that has been particularly successful online is MILK Makeup; this success is due to their more affordable price point and their ability to inspire content among beauty influencers.
We’ve taken a similar approach with Seventh Sense by pricing high-quality CBD beauty products in the $20 range, allowing the brand to be more accessible to the average consumer.
- Creating an Unforgettable Experiences
As retailers with decades of experience, GGB knows that retail success comes from creating exceptional experiences for consumers. In an industry where consumer confusion is common, education is an important part of the retail experience. That’s why Seventh Sense’s website dedicates an entire page to explaining CBD to consumers. Additionally, full ingredient lists are available on every product page and on all product packaging.
Supply is another crucial component of consumers’ experiences with CBD brands. Beauty brands require access to manufacturing and production infrastructure at large enough scales to ensure that products are high-quality, consistent, affordable and available at all times. Jefferies doesn’t expect the CBD beauty industry to differ, meaning brands need to deliver on consumers’ established expectations, from the product’s quality to the shopping experience to consistent availability online and in-store.