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The global cannabis beverages market size stood at USD 367.4 million in 2019 and is projected to reach USD 8,521.6 million by 2027, exhibiting a CAGR of 50.9% in the forecast period.
Cannabis has showcased a rapid surge in terms of mass consumer appeal around the world. Its recreational use is far greater than the medicinal utilization, taking into consideration the illegal consumption. The global market is expected to gain momentum from the increasing penetration of cannabis in the untapped ‘mainstream’ consumer market. The legalization of cannabis is gaining impetus worldwide which is primarily fuelled by the increasing recognition of cannabis possessing a range of legitimate medicinal benefits and therapeutic distribution channels.
COVID-19 Pandemic Affects In-store Operations and Sales of Products
Governments of various countries have imposed strict lockdown and social distancing measures across the world. Market closures, diminished eating-out trends, and the dampened demand for cold beverages have resulted in the aggravation of the market. The food services sector and other food businesses such as the bakery sector, beverage servings, and dairy are facing a huge decline in their revenue generation since January 2020, thereby resulting in the less sales of cannabis beverages.
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High Popularity of Cannabis-infused Beverages Owing to their Benefits is a Prominent Trend
Majority of the cannabis-infused consumables that made their first market appearance were baked commodities such as cookies, brownies, or confections such as candy bars and gummy bears which are generally viewed as unhealthy. Beverages have emerged as the most accessible way for the consumption of tetrahydrocannabinol (THC) as far as the whole gamut of edibles is concerned. Moreover, cannabis-based beverages are showcasing robust popularity owing to their superior functional benefits, portion-controlled doses, ease of administration, and availability.
Fundamental Transformation in Beverages Industry to Support Growth
Cannabis consumers are no longer limited to smoking flowers with joints, pipes, or bongs, but have their choice of an increasing variety of products, including concentrated and infused products. The beverages industry in itself is undergoing a fundamental transformation with the ingredients and additives. Consumers, especially in the developed markets of North America and Europe are constantly shaping the category amidst ‘all-natural’, ‘chemicals-free,’ and with ‘recognizable and herbal formulations’ trends and developments.
Growing HoReCa Sector and Modern Trade Practices to Proliferate Revenue
The beverages boom, as showcased in the off-trade sales channels such as restaurants, clubs, lounges, and more, is further expected to facilitate the sales of customized cannabis-infused drinks. Although THC has remained the major attraction among the consumers for experiencing the 'euphoric high,' the market is exhibiting a dramatic evolution with the robustly growing popularity of cannabidiol (CBD)-infused beverages. There is a robust demand for healthy edibles within the cannabis beverages industry which has further pushed the sales of CBD-infused drinks. Thus, the high demand for these beverages is also providing a radical shift to the overall cannabis beverages market share.
Stringent Restrictions on Selling Cannabis Products Worldwide May Obstruct Growth
Cannabis beverages are popular as they offer THC effects to the consumers, which is not permissible in several developing as well as developed economies. Governments of such nations are imposing laws for the manufacturing and marketing of THC products in the industry. Furthermore, consumers are not aware about the products and their benefits which is also impeding the significant growth of the market.
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Non-alcoholic Segment to Grow Rapidly Backed by High Demand for Nutritious Products
The entire segment of alcoholic beverages is facing the risk of disruption given the cannabis' ability to replicate the effect of alcohol with zero calories and with established health benefits. The current trend in the beverages space is also resonating favorably for infused products and herbal formulations. The global industry has exhibited a robust popularity of low and no-alcoholic drinks that have reduced calories along with the nutritional superiority. The emergence of these beverages category is primarily driven by private-label brands and start-ups which are intensively capitalizing on the therapeutic benefits of cannabis and developing products that would facilitate cannabis consumption in a social, widely accepted, and healthier way.
Online Retail Segment to Lead Fueled by Enhanced Autonomy & Privacy
These beverages have showcased rapid demand over the e-commerce channels which offer enhanced convenience, privacy, and autonomy regarding the choice of the products. Cannabis has exhibited greater sales from licensed dispensaries which opens up a plethora of opportunities for specialty stores to display innovative and flavorful beverages infused with active principles from cannabis. Moreover, such distribution channels are expected to act as ‘one-stop-for-all’ regarding cannabis-based edibles which are set to gain a greater growth trajectory amid the rapidly spreading legislation wave. But, the hectic lifestyles of millennials will make them retain the online channels for the purchase of cannabis beverages.
North America Cannabis Beverages Market Size, 2019 (USD Million)
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North America is at the forefront of the cannabis-infused beverages sector, spearheaded by the U.S. where the functional beverage market is exhibiting an exponential growth trajectory. Cannabis-infused products, especially the category of hemp-cannabidiol (hCBD), received a major thrust after the passing of the 2018 U.S. Farm Bill which legalized the usage of hemp and hemp-derived CBD products nationwide. North America generated a revenue of USD 335.1 million in 2019 and is anticipated to emerge dominant in the global market during the forecast period.
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Cannabis-based beverages have exhibited a negligible growth in the developing regions such as Asia, Oceania, and Latin America owing to the ban of THC products in the market. The gradual uptick in legalized recreational use of cannabis has sparked the interest of manufacturers to capitalize on cannabis consumables. However, the use of cannabis is not allowed in countries such as India, China, and others.
Manufacturers are Consistently Focusing on Delivering Novel Cannabis-infused Beverages
The cannabis beverages market growth is highly regulated by various government bodies across the world. Dynamic, competitive, nascent, and untapped market structures have been present in the global cannabis beverages space. The market is also showcasing extensive investments by key players in the production and supply of raw materials for developing innovative and novel beverages. Recently, Constellation Brands invested USD 4 billion in the Canadian cannabis producer, Canopy Growth. Also, in December 2018, Labatt, a subsidiary of AB InBev partnered with Tilray, another Canadian cannabis beverages producer, to conduct research of non-alcoholic beverages infused with THC and CBD.
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The market research report provides qualitative and quantitative insights on the cannabis beverages industry and detailed analysis of market size and drive the growth rate for all possible segments in the market. The market is segmented by type, distribution channel, and geography. Based on type, the global market is categorized into flower/bud and concentrates. The market is also segmented by distribution channel into medical, recreational (which further includes edibles and topicals) and industrial hemp. Geographically, the market is segmented into four major regions, which are North America, Europe, Asia Pacific, rest of the world. The regions are further categorized into countries.
Value (USD Million)
By Distribution Channel
Fortune Business Insights says that the global cannabis beverages market size was valued at USD 367.4 million in 2019 and is projected to reach USD 8,521.6 million by 2027.
In 2019, the North America market value stood at USD 335.1 million.
Registering a CAGR of 50.9%, the market will exhibit steady growth in the forecast period (2020-2027).
The non-alcoholic segment is expected to be the leading segment in this market during the forecast period.
The growing HoReCa sector is one of the major factors driving the growth of the market.
Aurora Cannabis Inc., Aphria Inc., Cronos Group Inc., and Tilray are some of the major players in the market.
North America dominated the market in terms of share in 2019.
The increasing legalization and approvals are expected to drive the adoption of these beverages.
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