How recreational cannabis will impact grocers’ shopper connection
Recreational cannabis is now legal, but its move mainstream is still unfolding. Cannabis culture is undergoing a huge branding metamorphosis, with the “stoner” stereotype falling away and use becoming normalized. This disruption will accelerate next year once infused edibles become available, expanding cannabis’s appeal and furthering direct competition against various products.
To unpack why cannabis legalization matters for grocery retailers’ shopper reach, I sat down with Kantar Consulting’s expert, principal analyst Kate Senzamici, to understand how cannabis plays across the retail market. Here are highlights from this conversation:
Why does cannabis legalization matter for mainstream retailers, considering they can’t sell cannabis directly?
Legalization matters because it marks the emergence of a roughly $5 billion industry—one in which Canada will be a global trailblazer.
Cannabis is unique, and worth paying attention to, because it’s so diverse in applications and use-cases: as a product, it’s relevant across all retail channels and virtually all retail categories—from prescription drugs, to personal care, to apparel. It has health and wellness applications, social and experiential applications, and natural and sustainability [applications]. Cannabis can really play in virtually every corner of the retail market.
It’s also necessary to understand that cannabis consumers are your consumers too.
What are the biggest impacts legal recreational cannabis will have on mainstream grocery and drug stores?
A lot of attention is around marijuana’s impact on the alcohol and tobacco industries. But there are huge implications across prescription drug, over-the-counter (OTC) medicines, and wellness products as well.
Here, cannabis will influence shifts in share of wallet across grocery and drugstores. As legalization broadens access beyond licensed medical users, we will see more shoppers turning to cannabis as an alternative—or supplement—to traditional treatments. Shifting OTC and prescription use could eliminate a drugstore or grocery trip, or at least cut down on aisles visited in a given trip.
On the other hand, this can be a point of entry for pharmacies. Retailers such as Shoppers Drug Mart are willing to dispense cannabis—though this will likely not be until after the first year of legalization, and may vary by province.
Increasingly cannabis—whether it’s in the form of non-psychoactive cannabidiol (CBD), THC, or both—is used as part of stress-reduction. That can include anti-anxiety, sleep, or other ways that consumers need help unwinding.
CBD in particular is already a big trend across wellness and beauty categories in the US. This will influence further share of wallet shifts as shoppers trade out of categories or brands to cannabis-enhanced products.
And in general, cannabis often fits nicely into shoppers’ desire for natural products, especially when it comes to health and wellness needs.
How should consumer brands be prepared and respond?
Consumer brands must understand when and how cannabis is being used, and consider how to align their products with or compete against the category. For example, is there an element of your portfolio that complements an evening wind-down routine? Identifying moments helps highlight where brands can play.
Also get to know the consumers. They’re diverse. Kantar Insights has already identified four segments of Canadian consumers, with differing demographic profiles, wants, and uses for cannabis. Being relevant to the range of consumer types and use cases will unlock broader applications and opportunities for traditional brands.
For more information about Canada’s cannabis consumer segments, or to discuss how your company can avoid missing out on this opportunity, email me at: Robin.Sherk@kantarconsulting.com