Beating the Wrap: EU Cannabis Marketers Face Packaging Challenges
By Oliver Bennett, New Frontier Data Special Contributor
Despite the twin constraints of the ongoing COVID-19 pandemic and a regulatory pause on CBD applications for inclusion to the EU’s Novel Food Catalogue, there remains a strong upward trend in Europe’s CBD and medical cannabis industries. The U.K. market alone in 2019 was valued at £300 million (USD$356 million) by the Centre For Medicinal Cannabis, while New Frontier Data projects the EU CBD market (i.e., 27 countries, not including U.K.) to reach €8.3 billion (USD$9.9 billion) in 2020. In the wellness sector, CBD is one of the fastest-growing product categories in the U.K.– worth more than the its vitamin C and D markets combined, and expected to be worth £1 billion (USD$1.19 billion) by 2025. Some also expect that Europe will become the world’s largest legal cannabis market in the next five years with France, the U.K. and Spain reviewing current legislations, and Germany, Italy, and the Netherlands expanding existing programmes.
Yet there is a feeling that there remains far to go on the marketing and branding front. As one design advocate described, the cannabis and CBD sector needs to act on “removing confusion, demonstrating integrity, and making the health benefits crystal clear to the consumer… to cut through all the white noise and suspicion associated with CBD products”.
As the market matures and grows, questions of marketing and packaging come increasingly into play. At the more visible consumer end of the market CBD products cluster of niches (e.g., from beauty and skincare to wellness, soft drinks and more), all are needing suitable packaging and branding. According to a recent GQ article, “CBD and, by association, cannabis are undergoing something of a brand overhaul.” From earlier days of clip art and oft-used imagery of the seven-pointed cannabis leaf, there has been a move to greater sophistication in packaging – albeit with the overall colour scheme for many brands remaining green.
Across the various sectors, CBD packaging varies greatly. Wellness brands, for example, tend to communicate efficacy via pharmaceutical-style packaging: As one packaging expert says, packaging should “explain the benefits to be found where modern science and botanical know-how meet” – and make that message evident to the consumer.
Within each sector, branding offers further differentiation and start-ups are finding unique voices. Some embrace a renegade branding associated with the erstwhile illegality of cannabis, such as U.K. CBD company Mr. Nice, inspired by the nickname of the British cannabis smuggler Howard Marks. The brand Aver offers CBD products aiming to calm burned-out professionals associated with urban stress. Some hope to separate CBD from its cannabis origins — as in upmarket U.K. CBD brand Lady A, with an identity by Michael Wolff and NB Studio featuring tinctures, balms, capsules, and vape pens, and founded by Alexandra Dunhill, descended from the tobacconist Alfred Dunhill.
At present there is not much brand loyalty in the EU CBD market. Of those who have tried CBD,32.1% reported always using the same brands, with 25.3% saying that they would occasionally try new brands. Price and access are two key factors in the purchasing journey.
The pandemic may further change packaging and point-of-sale preferences. Euromonitor International’s research manager, Marguerite LeRolland, has reportedly suggested that COVID-19 may yet increase demand for the demonstration of safety, provenance, and transparency of ingredients in beauty products. She added that consumers may also seek simplicity and minimalism, with signature ingredients associated with immunity, protection, natural healing, and strong alignment to health, therapeutics and wellness.
There are regulations to observe in cannabis/CBD packaging and labelling. At the level of high-street CBD brands, child-resistant packaging is mandatory with twist-off caps and other packaging technologies. In terms of the packaging across Europe, levels of CBD and THC should appear very clearly, though THC by law in Europe may not yet exceed 0.2%. CBD products should state whether they are “full-spectrum” with other subjects, or made with isolates with other cannabinoids present. Where THC products are allowed, it has been argued that effective THC labelling and packaging could help reduce any risk of accidental overconsumption of cannabis edibles.
As there are restrictions on CBD advertising in the U.K. and across the rest of Europe, packaging and point-of-sale presentation become doubly important. Premiumisation in the market helps with visibility, and ancillary publicity, as well as with in-store displays and retail curation.
Packaging styles are vital to the sector, with growing resources such as Ziplock bags, droppers, creams and pipettes or droppers. Ethical and sustainability issues are often part of CBD and cannabis products’ sales strategies, and there is a move towards the naming of ingredients along with potential allergens, nutrition advice and warnings. In the U.K., cannabis-based products need to include the active herbal ingredient, expiry date, ratio of THC and CBD, and “keep out of reach and sight of children” warnings, as subject to the European standard covering non-reclosable packaging for medicines, and that covering similar packaging for non-medicines.
As branding helps both to guide consumers and promote quality standards, it is to be encouraged in a nascent industry. Yet, in an immature sector with plentiful regulatory confusion, it remains in its infancy. With issues in the CBD market such as incorrect labelling – the Centre for Medicinal Cannabis reported that 62% of its sampling of U.K. high-street products studied featured less CBD than promised – branding could also help to add accountability.
The CBD industry nevertheless faces hurdles to effective marketing resources while companies are still often denied access to bank accounts, credit cards, loans, or online payments from companies like PayPal and Stripe. Marketing in the sector is also held back by not knowing levels of future enforcement to expect. For now, U.K. businesses may continue to sell pre-existing CBD products before 31 March 2021. Clarity for the EU-wide industry may take longer still.