Can Big Alcohol and Big Cannabis Coexist Peacefully?
There’s no denying that cannabis use is already becoming more accepted. In fact, people are already widely replacing their booze habits for some healthier, safer pot instead.
That isn’t very good news for the alcohol industry.
The latest report from the International Wine and Spirits Research (IWSR) firm, which collects information on the booze industry, may send shivers to alcohol industries. Entitled, “Beverage Alcohol, Cannabis and the Changing US Consumer: What are the Real Risks and Opportunities to Consumption Behavior?”, the rep states that legalizing cannabis has given birth to an “explosion of growth” in the marijuana sector. As a result, around 40% of people above 21 years of age now consume pot where it’s legal.
The publication, done in cooperation with BDS Analytics and the IWSR Drinks Market Analysis, explains that the growth of the legal cannabis industry poses its own risks for the beverage market.
“Cannabis presents substantial opportunities across consumer industries, including new occasions that alcohol cannot and will not play,” says BDS Analytics vice president Jessica Lukas. “Consumers will continue to look to cannabis products over alcohol for occasions when they are feeling creative, need to get motivated, or seeking health, medical or wellness benefits.”
“Though not yet mainstream, cannabis adoption is certainly growing in states where it’s legal and does pose a risk to the beverage alcohol industry in the future,” says IWSR US President Brandy Rand. “It’s important that alcohol brands pay attention to their consumers, recognizing that some occasions may result in a decrease in alcohol consumption in place of, or alongside, legal cannabis.”
The report states that while the two substances are very different, not everyone is spending all their money on cannabis now instead of alcohol. But it still sends a warning that beverage companies need to do their homework in order to meet new needs of consumers particularly as the markets overlap.
Demand For Beer Drops, Wine And Craft Beer Increase
Consumers these days seem to have less of a preference for beer. They’re trading their Corona for craft beer, instead. The report states that beer volumes have seen a drop in the US alcohol market; last year, beer accounted for 78.3% of the entire country’s alcohol volume, a slight drop from the 78.9% in 2016. However, there seems to be a spike in consumer interest when it comes to craft beer, as 2018 saw a 4.7% increase while on-site consumption in breweries around the country continue to see a surge.
On the other hand, 2018 was a good year for wine; it marks the 24th year in a row that the wine market saw continuous volume growth. Given that there are some 13,000 winegrowers in the United States, there seems to be no slowing down since there were almost 1,000 more new ones in 2018.
Opportunities For Big Cannabis In The Alcohol Market
So far, all states that have legalized cannabis aren’t allowed to sell both pot and alcohol in the same shop. However, alcohol companies can benefit from entering the cannabis industry particularly because they’re already so skilled when it comes to the tricky aspect of operating in a highly regulated industry.
Big Alcohol and Big Cannabis may actually be able to peacefully coexist. And Big Alcohol knows this. One of the biggest news in the industries last year was Constellation Brands purchasing a 38% share in Canopy Growth, amounting to a cool $4 billion.
Last year as well, Molson, a Coors subsidiary, announced that they would be partnering with Hydropothecary for creating cannabis-infused, non-alcoholic beer. There were also some rumors that Coca-Cola was in talks with Aurora, potentially for making some CBD-infused drinks.
At the end of the day, for an individual with no health issues, there’s no reason why it has to be one or the other. But for those who have given up the bottle for some joints instead because of certain ailments, then there’s good reason to get stoned instead of drunk.
Many people actually do enjoy mixing pot and booze; it can be a really delightful experience but it depends on who you ask. There will always be the people who think it should be one or the others, and there will always be those who believe that a night of wine without weed is unthinkable.
Beverages that can get you high already to exist in the market, and there’s still lots of room to grow. When these drinks become more widely available, consumers will no longer need to choose just one. It’s the best of both worlds!
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