EU Advertising Restrictions Keep European Consumers Uncertain About CBD
By William Sumner, Hemp Content Manager, New Frontier Data
The European CBD market is at a turning point: Though both consumers and investors remain excited about the CBD market, disruptive forces like the COVID-19 pandemic and rulings by the European Food Safety Authority (EFSA) threaten to stymie growth.
At a critical time in the industry, New Frontier Data has released the EU CBD Consumer Report Series: Market Size & Demand. Examining the market forces affecting the CBD industry in the European Union (EU), the report reveals significant insights into consumer attitudes and brand preferences.
The EU CBD Market Remains Immature
While industrial hemp cultivation is nothing new to the EU market, CBD remains largely unknown to a large percentage of the European public. As of Q4-2019, only 56% of Europeans had heard of CBD, compared to 86% of Americans, respectively. Among Europeans surveyed, only 46% had a positive view of CBD.
Brands hoping to make inroads in the continent’s market will have to close the knowledge gap. For early market entrants, that presents significant opportunities to build customer loyalty before competitors have established a footprint.
Tight Regulations Limits Brand Messaging
Brands looking to make a splash in the EU CBD market will find themselves severely limited in comparison to the U.S. market. The EFSA is debating whether to classify CBD derived from hemp flower as a narcotic, and individual markets like Germany place burdensome requirements on what may or cannot be said on product packaging.
The issue of messaging become more complicated when considering the reasons why EU consumers use CBD. Approximately 46% of them use CBD for either medical reasons or pain management, while 33% do for unwinding, with another 18% reportingly taking it for general wellness.
Though in the U.S. brands can circumvent regulations regarding making medical claims by marketing CBD as a general wellness product, in the EU brands are restricted from same. In Germany, for example, even customer testimonials are prohibited. A CBD company looking to make an impact in the EU market will need to walk a fine line to avoid restrictions or penalties.
The Most Loyal CBD Consumers Are Medical Patients
Although CBD brands are forbidden from making claims about medical uses or general wellness, the most loyal CBD consumers are those who use the substance for medical reasons. Approximately 56% of medical CBD users report spending €50 (USD$59) or more a month on CBD, compared to 46% of those who use CBD to unwind. Another 53% of medical CBD users also say that they always purchase familiar brands, compared to 31% of CBD consumers using it to unwind.
Despite the strict advertising regulations limiting what brands can say, CBD companies should be strategic in how they build their brand, aligning their interests with the broadest ranges of consumer preferences.
For more insights into the CBD markets in Europe or North America, consult New Frontier Data’s available analyst reports.
