The market for CBD-infused products is red hot and growing at a rapid rate.
According to Brightfield Group, the top categories for CBD products over the next five years are tinctures, gummies, topicals, capsules, and drinks.
Nathan Wogman
Each category will reach over $1 billion in product sales by 2026.
According to the Chicago-based forecasting firm, pet products are forecast to reach nearly $1 billion in annual sales, and beauty and personal care offerings can reach a half-billion dollars a year.
These projections include not only off-the-shelf finished goods but also products that have customized formulations and ingredients.
Differentiate Through Custom Formulations.
Many products that enter the market—including those that are white-labelled—are more or fewer commodities with little differentiation from competing brands.
The value proposition for these offerings is primarily economic. We are delivering a white-label CBD product at price points lower than the competition, which has been essential to retailers and others in the sales channel.
While supporting the economy remains important, many retailers are now recognizing that consumers want products that are reliable, relevant, and effective in addressing their particular conditions.
For example, a golfer will likely want a CBD product to address their specific ailments rather than just a generic topical rub. Meanwhile, a dermatology practice may be interested in providing a product to combat acne, but it may also want to add an essential ingredient for preventing sun damage.
Specific products are far more appealing than generic offerings in situations like these.
Few would dispute this. However, this industry is in its adolescence, and retailers and others in the sales channel may feel that creating customized products to address a specific market segment is too complex or expensive.
In reality, the opposite is true. With the influx of modern technology and advanced processing, experienced CBD manufacturers have the expertise and resources to manufacture and deliver bespoke products far more quickly and cost-effectively than expected.
By choosing a manufacturer with the background and technology to cost-effectively create customized products, retailers can begin to build a loyal, discerning, and long-lifecycle customer base.
Choosing Your Manufacturer
Brands should consider several keys to success when choosing a manufacturer to create a custom product.
Retailers should select a supplier with its own processing plant, which can add custom ingredients and has sufficient capacity to meet demand.
Suppliers who outsource manufacturing lose the ability to control end-to-end product formulation and ensure it meets the required specifications, quality, and consistency.
It is important to consider the cost of goods so the product can be priced right for the market. Although it may be easy to assemble a “dream formula” for a particular market, if the cost of ingredients becomes too high, it will likely fall short as a viable product.
Packaging selection should be carefully considered, and product labelling must meet regulatory compliance.
Additionally, tracking the chain of custody is vital.
A brand must be able to trace the ingredients and manufacturing process from when the cannabinoids are extracted from hemp to the end product—with a batch code printed on the finished package. This is needed for a retailer to comply with a product recall, if necessary.
By working with a manufacturer that understands and controls the complete supply chain, retailers can be confident that their custom formula is high-quality, consistent, and compliant.
Conclusion
CBD manufacturing and business processes have evolved to the point where it is both technically and economically feasible for retailers and wholesalers to offer customized products that capture lucrative market segments, delight customers, and build brand loyalty. These products complement selling white-label products, giving savvy retailers compelling options for generating revenue and building a solid customer base.
By partnering with a CBD manufacturer that understands the custom products market and has the capabilities and expertise to formulate products at reasonable costs, providers can confidently offer an effective, safe, compliant, and profitable product that will differentiate them in a highly competitive market.
Disclaimer: https://hempindustrydaily.com/how-to-capture-the-market-for-customized-cbd-products
