Cannabis ‘poses long-term risk’ to US alcohol industry
By Jules Scully - Feb 26th, 08:52
Increased cannabis consumption in the US “poses a long-term risk” to the alcoholic beverage industry, according to new research from the IWSR and BDS Analytics.
Though legal cannabis is currently only a fraction of comparable alcohol sales, the study shows that the risk to beverage alcohol is expected to expand as cannabis acceptance and consumption grows, particularly among beer and spirits drinkers.
The report also notes that millennial consumers represent 45% of ‘dualists’ (those who consume both cannabis and alcohol), which it says is a “sobering statistic” for alcohol companies who are trying to maintain sales in this important demographic.
Titled ‘Beverage Alcohol, Cannabis and the Changing U.S. Consumer: What are the Real Risks and Opportunities to Consumption Behavior?’, the report is an initiative between IWSR Drinks Market Analysis and BDS Analytics, the consumer research analysts in the fields of beverage alcohol and cannabis respectively.
The US cannabis industry has surged in recent years – ten states have now approved adult recreational use of cannabis products and 34 states have approved cannabis for medicinal purposes.
Jessica Lukas, vice-president of BDS Analytics, said: “Our research shows that up to 40% of adults 21 and over consume cannabis in states where it’s legal. Cannabis presents substantial opportunities across consumer industries, including new occasions that alcohol cannot and will not play."
“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.”
Brandy Rand, IWSR US president, added: “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."
“It’s important that alcohol brands pay attention to their consumers, recognising that some occasions may result in a decrease in alcohol consumption in place of, or alongside, legal cannabis.”
The news follows a study by the Distilled Spirits Council published last month, which suggested that spirits sales have not been negatively impacted in the three US states that have legalised recreational cannabis the longest.
It revealed that since recreational cannabis was legalised, spirits sales grew in Colorado by 7.6%, in Washington state by 5.4% and in Oregon by 3.6%.
Distilled Spirits Council chief economist David Ozgo said: “Simply put, the data show there has been no impact on spirits sales from recreational marijuana legalisation.”FoodBev
US jealousy sparked trade wars, says Chinese ambassador
21/05/2019 - 10:48
The US is jealous of China’s rapid economic growth and achievements in the past few years and was using the trade wars to frustrate and stall it, Lin Songtian, the Chinese ambassador to SA said.
Walmart reveals plans for a new corporate campus
20/05/2019 - 17:04
Corporate America has been under political pressure to ramp up investments at home.
Cape Town micro-brewery takes on light beer market
09/05/2019 - 11:33
For decades, beer connoisseurs the world over have held heated debates over which is better; a lager or a light beer.
Autograph Gin wins Best Gin in Africa award
02/05/2019 - 13:56
The International Gin Guide Award, released their awards for 2019 on the 30th of April 2019.
Is it time to introduce a minimum unit price on alcohol?
25/04/2019 - 11:10
In May 2018, Scotland introduced a minimum unit price of 50p per unit (8g) of alcohol, with the aim of reducing abusive drinking. Research had shown that a large proportion of very cheap alcohol consumed in Scotland took the form of heavy drinking, resulting in drunkenness and other socially unacceptable behaviour.