Whole Foods' CBD expansion reflects category 'explosion'

Dive Brief:

Whole Foods will expand distribution of topical CBD products to stores in 13 new states this month, the company announced in a press release.
With the additional stores, CBD products will now be available in 359 Whole Foods locations across 30 U.S. states. The grocer is also adding an exclusive lineup of CBD bath items from Pacha Soap Co.
Topical CBD products and the new products from Pacha Soap Co. will be 25% off from Oct. 4 through Oct. 6 as part of Whole Foods’ fall bath, beauty and body care sale. Prime members can get another 10% off the discounted price.

Dive Insight:

Whole Foods’ global senior category merchant Jennifer Coleman said in a statement that shoppers have expressed a growing interest in CBD products, but that growth isn’t unique to the natural grocer. During a panel at Groceryshop in Las Vegas on Wednesday, Bethany Gomez, managing director at the Brightfield Group, said the industry is expected to clear $5 billion in sales this year — a 700% growth rate.

"The real explosion that we’ve seen in this market both prior to the Farm Bill passing [in 2018] and in 2019 is really unprecedented," Gomez said. "And this is really coming from a wide variety of angles."

As CBD products become available in more retail outlets and new items come on the market, Gomez said there is a new cohort of "glam users" emerging, which are people who use CBD as a part of a wellness lifestyle as opposed to managing health symptoms or pain.

"They’re using it to take a bite out of their day, to relax, to unwind, swap out for their afternoon cup of coffee, swap out for their glass of wine at the end of the night," she said. With so many different use cases, Gomez said there is still major potential in the future market.

For Whole Foods and other retailers, the increasing awareness of CBD is building a category that could boost high-margin health and beauty spending and motivate shopping trips. Traditional grocers like Kroger and Dierbergs are now testing the waters for CBD, and online brands such as Thrive Market and Brandless are just a couple of companies that are sources for CBD products.

As CBD becomes more prevalent, Gomez and other panelists noted there is still a need for consumer education on how and why to use it. Retailers will need to be particularly diligent about how they train employees to sell it and what claims they can make to customers.