The outbreak of novel coronavirus has jeopardized the future of many industries. The world economy is seeing an unprecedented collapse and markets are moving towards recession. Disruption of daily lives and low purchasing power are hitting the consumers hard. The anxiety and stress are on the rise as well. Thanks to the medicinal properties of CBD that continue to provide solace in difficult times.
Like other industries, the future of the CBD industry remains unpredictable. People stockpiled CBD just like essentials before the lockdowns. However, nationwide shutdowns, impeding supply chain, and economic slump adversely affected the thriving CBD industry. The market leaders with a big brand name and an online presence are doing well. But, small companies that depend on in-store purchases are at a loss. The CBD entrepreneurs are as anxious as the customers. In this grave situation, when health and wellness becomes a primary concern, you can always bet on CBD products and a wide variety of CBD edibles from Lazarus Naturals for enormous benefits.
Unique demand patterns surround the CBD industry. Solely used for a range of health issues, the legal CBD industry can be considered recession-resistant. The category-wise sale shows a different scenario. Few products like edibles captured 51% of the market but, the sale of many others noticed sheer degrowth or no change during Covid-19.
Here are five such CBD products that faced the lack of demand during Covid-19 and affected the growing sales.
This CBD product has witnessed a degrowth of 13%. The reason is quite probable. COVID-19 is a respiratory illness that is likely to get worse by smoking. The Gen Z customers who contribute to the maximum revenue of joints are keeping away to follow the self-care routine during Covid-19. The decline in sales is also due to the fear of transmission of coronavirus infection as CBD joints are consumed socially by sharing with multiple people.
Covid-19 added to the woos of the vaping industry. Firmly recovering from the vaping health scare, the outbreak significantly declined the market share of the vaping. The choking supply chain played a major role in the downswing. The coronavirus had a significant impact on the manufacturing and supply of vaping hardware that is imported from China. Lack of people, processes, tools, closure of ports, and many other factors restricted the supply network. The disposable vape pens did show a 9% jump in the starting days of coronavirus, but again with limited supply, the growth was shortlived.
The growth curve for this item has shown no significant changes during Covid-19. Generally, taken for pain relief, its market share remains the least among other products but almost steady. There is no record of stocking-up or inventory growth. Neither there is any rise in consumption levels.
CBD concentrate has seen a decline of 11% during the first few months of the spread of the pandemic. The decline in walk-in customers and closure of stores during lockdowns has hit the retail business of concentrates. Also, concentrates use vaping and dabbing that are already in a declining phase during coronavirus. Most customers avoided the stock-up purchasing of concentrates for health concerns and the involvement of costlier equipment.
CBD topicals have shown degrowth of almost 13%, just like rolls. Whereas the CBD products like CBD foot cream to relieve anxiety exhibit an ascending trend, the purchase of products like lotions, cream, salves especially, used for skincare, were avoided. No stockpiling was done and the inventory level with the retailers climbed to 14 weeks supply as compared to 13 weeks before the pandemic.
The Bottom Line
CBD industry tends to be volatile during Covid-19. Consumption patterns have changed and so do the economic conditions. Online sales are a hit and retail is a miss. The sudden upsurge of CBD sale seen previously, maybe the result of virus-centric stockpiling. And, the downtrend of many CBD products is shocking. The businesses that survive will have lesser and better competitive markets. But whatever be the market scenario, the presence of CBD in the shopping cart will be inevitable, all thanks to the therapeutic properties it possesses.