“Vodka. Happy water for fun people.”
“Alcohol! Because no great story started with someone eating a salad.”
“I like my water with barley and hops.”
Drinking slogans remind us that alcohol is both fun and funny. We drink to celebrate, we drink to relax, we drink to socialize. Drinking culture is so woven into our daily lives that we may only notice when we run into a teetotaler. 136.7 million Americans aged 12 or older reported using alcohol in the past month and U.S. alcohol sales totaled $253.8 billion in 2018. The alcoholic beverage market is colossal. From trendy craft brew to biodynamic wine, there’s something for everyone. Despite this, recent figures have shown that alcohol consumption is decreasing in America. Health and wellness trends have created a consumer who is mindful about what they eat and drink. It can be difficult to reconcile a lifestyle that’s meant to be curative with the glaring evidence of the harm alcohol does to the body. An increasing number of health-conscious consumers are looking for the social benefits of drinking without the damage.
A ‘Budding’ Renaissance
Those in cannabis’s corner have always seen beyond the stereotypes associated with the plant. They understood it's healing properties; alleviating chronic pain, restoring cancer patients’ appetite and easing the anguish of trauma. Far from being the “gateway drug” we’ve been warned about, cannabis offers an alternative to some of the more powerful pharmaceutical treatments prescribed to those suffering from pain (including, ironically, opioids). Cannabis evangelists helped catapult its legal status from a schedule 1 drug to fully legal in many states. It didn’t take long for the good word of weed to spread, changing our perception its users. Today’s cannabis consumer is focused on health and well-being, is 30 years old on average, and of particular importance to the growing cannabis market, is a high earner - 65% of cannabis users have a household income of $75K or more.
Cannabis is having its moment. The legal marijuana market is growing quickly and shows no signs of stopping. In the United States, the market size was estimated at $7.06 billion in 2016 and is expected to grow at a CAGR of 24.9% from 2017 to 2025. Since becoming legal in Canada in 2018, our neighbors to the north have shown a healthy appetite for the plant; Canadian sales reached $1.6 billion in 2018. North America isn’t alone. Worldwide demand for marijuana is propelling legalization for both medicinal and recreational use in many countries. Private and public investment in marijuana has led to an increasing number of companies operating in the marijuana market. These companies are using marketing tactics traditionally aimed at beer and cigarette consumers. They are working under an assumption that marijuana is an alternative to beer and cigarettes. However, when it comes to the consumer of recreational substances, it is rarely an either-or situation.
The Crossover Consumer
Since the legalization of recreational cannabis, analysts have been eager to understand the impact on the beer and alcohol industry. According to a recent study completed by the alcohol industry trade group, it doesn’t appear as though consumers are swapping cocktails for weed. Per capita alcohol sales in the states with the longest-standing recreational cannabis markets (Washington, Oregon and Colorado) have remained unaffected. Beer, on the other hand, might be feeling the squeeze. Already faced with national slumping sales, beer has taken a hit in states with legal recreational marijuana. Early theories point to beer and marijuana sharing the same consumer demographic (young and male).
The introduction of recreational weed reshapes the consumer landscape in which spirits and beer play. Both industries need to understand their consumer in the context of the other. The person who drinks a glass of wine at the end of the day to unwind is not the same person who can drink a glass of wine at the end of the day or take two puffs from a vaporizer to unwind; the psychographic profile of this consumer will have to expand.
Tabor Consulting explored the profile of this new consumer. Key to our findings is why each group uses their preferred substance(s) and what that means for crossover opportunities in both the alcohol and recreational weed markets and we’re proud to make our findings available here.
Sources
2016 National Survey on Drug Use and Health (NSDUH)
https://thefreshtoast.com/news/what-does-the-new-marijuana-consumer-look-like/
https://www.grandviewresearch.com/press-release/global-legal-marijuana-market
https://cannabusinessplans.com/cannabis-legal-market-size-projections/
