CBD IN FOOD & BEVERAGES
TREND
We all heard of CBD, the 2019 hottest new ingredient that’s been promoted as a cure all and can be found in everything from oat milk lattes to skin care. Unlike THC, CBD is non-psychoactive, making it more approachable and acceptable for use in food and beverages.
The National Restaurant Association survey found that three in four chefs named CBD – and cannabis-infused food as a hot trend in 2019.
CBD in food is not a fad, it is a lasting trend that made its way from the supplement market into the shelves of 7Eleven as well as the bar and restaurant scene with chefs and mixologists all over the country experimenting with the new ingredient. Just five drops of CBD oil turn happy hour into an even happier hour for the guest as well as for the bar - because margins on CBD drinks are huge.
PRODUCT
Hemp-derived CBD in food is still a gray area. Even though CBD-infused waters can be purchased in major convenience store chains in California, it is not an FDA-approved ingredient.
The city of West Hollywood has given out a handful of licenses to restaurants that are now allowed to sell Cannabis infused foods. One is the Lowell Farms Café that offers dishes like Brioche French Toast with Cannabis Pairing under the slogan “The end of prohibition is here.
Eat, drink and smoke cannabis at Lowell Café”.
Other cities are closely monitoring this trial and could follow suit very soon. The demand is definitely there in LA.
In packaged drinks however, the reach of CBD is much wider and there is an open space between soft-drinks and alcoholic beverages that’s about to be filled: the premium adult beverage space.
Companies like Oki sell their CBD infused waters at 7Eleven or Chevron gas stations and CBD drinks from Sweet Reason or Recess can be ordered online.
Oki claims, their iced-teas and infused waters “provide an easy way to get the complete natural benefits of broad-spectrum hemp in the pleasant and convenient form of a drink”. A 12 pack of 16fl oz water bottles sells for $60 and contains 20mg of broad-spectrum hemp extract.
MARKET
Legislation is currently being worked out on the federal and state level, where each state is adopting its own strategies for dealing with CBD in food and beverages. Indiana, Utah, Texas and Florida require a QR code that allows consumers to look up batch numbers, potency and other ingredients.
Some states allow adding cannabidiol to food, but others such as California, Maine and New York City have sided with federal regulators in banning such a process.
Whether restaurants are allowed to add CBD to their dishes depends on local laws.
Declining alcohol consumption over the last few years is opening up new opportunities in the dynamic premium adult beverage space. CBD infused retail drinks as well as CBD mocktails at the bar are the response to health awareness and concerns about artificial sugars in soft drinks and efforts to limit alcohol intake. The high margin on these products has beverage companies racing to fill that middle ground between alcoholic and non-alcoholic drinks.
Corporations like Ben & Jerry’s published statements in support of legalizing CBD in food so that they can enter the market with a CBD infused ice-cream as soon as it is legal. “Currently, the FDA prohibits adding CBD to food and beverages. But change is on the horizon: They’ve set a public hearing on the legalization of CBD-infused foods and beverages for May 31st 2019, and we’ve submitted a comment to them in support of legalization.”
Oki beverages have a suggested retail price of $5 per 16-ounce bottle; a 16.9-ounce bottle of Nestlé Pure Life water, by comparison, is about 13 cents.
In 2019, the European Food Safety Authority (EFSA) reclassified the ingredient as an unauthorized novel food, meaning companies operating in the space now must seek EFSA approval to continue using it.