CHICAGO – Legal marijuana will take away 7.1% of revenues from the existing retail beer industry, per the Cannabiz Consumer Group (C2G).
The firm suggests that if cannabis were legalized nationally, the beer industry would lose more than $2 billion in retail sales. C2G also found that 27% of beer drinkers say they already have substituted cannabis for beer, or would substitute their beer retail purchases with cannabis in the future (if legal). Other segments of the alcohol industry including wine and spirits and on-premise sales are also being impacted, as are other CPG categories, brands and retailers.
In 2016, there were 24.6 million legal cannabis consumers in the United States. As legalization extends to additional states, either through medicinal or recreational legislation or both, C2G projects that legal cannabis penetration will settle at a level comparable to that of beer and wine and that a fully mature market would create a new $50 billion industry. The forecasts were generated using C2G’s CannaUse study on the cannabis mindset and behaviors of 40,000 individual participants, cannabis purchase transactions, and CPG consumer panel and point-of-sale data from IRI.
In emerging markets, a novelty impact often occurs as new users try a product simply for the experience but do not sustain its use, skewing early market predictions. C2G says that its results suggest this will not be the case with legalized cannabis.
“Those at risk of losing sales to legalized cannabis can undertake a variety of actions to offset their losses,” said Rich Maturo, chief innovation officer at C2G. “Consumers use cannabis to satisfy various social, medical and experiential need states. By understanding these needs, those at risk of losing sales to cannabis can try to offset some of the losses by understanding and speaking to a consumer’s needs. Unfortunately, there is no doubt that leakage will occur. Those companies that are gathering insights on cannabis and have the foresight to see it as presenting an opportunity in addition to a risk will fare much better than those who strictly take a defensive position.”