Investing in the Future
Brands hurry up: High times are here.
By Faith Popcorn
While many food and beverage leaders are tinkering with their current offerings, most are missing a huge opportunity with a product that’s as old as nature itself: the increasingly legal marijuana plant.
A Mile-High Business
Don’t laugh (unless you’re already high, in which case go on and enjoy yourself), marijuana is very big business, and it’s only getting bigger. In 2016, the North American market was worth $6.7 billion, according to Forbes, a whopping 30 percent more than the year before.
Why such a boost? Eight additional states legalized marijuana in some form last year, bringing the total to 29 states plus Washington D.C., and it’s possible 10 more states will go legal this year. By 2020, the market is expected to hit $23 billion – almost the size of the salty snack market; by 2026, it’s forecast to reach a mind-blowing (pun intended) $50 billion.
All Trends Lead to Weed
Times have changed. A recent CBS poll shows that 61 percent of Americans favor full legalization and 88 percent agree that medicinal marijuana should be accepted. The rising mega-generation of Millennials is especially vocal in their support of legal weed (71 percent approve of it), and they are ripe to spend big on it, thanks to a confluence of cultural currents.
Our FutureTense Trend (one of 17 proprietary Trends in our TrendBank) indicates that anxiety is surging and the American Psychological Association reports that no generation feels the effect of stress more than Millennials. We also know they want to go natural – our Being Alive Trend reveals a craving for what’s earthy and unadulterated. These consumers want to chill with a plant, not a pill.
The quest for mindfulness is intensifying (our Anchoring Trend in action), too, as a way to offset anxiety. The rise of the Headspace app, and drop-in meditation studios like Unplug and MNDFL are examples of this cultural current in action.
Cannabis Gets Curated
Yes, some stigma around cannabis still lingers from decades of our government treating it as an illicit scourge, and its reputation as the numbing agent of basement-dwelling slackers everywhere. A sea-change is underway however, and a new image is emerging: invitation-only, five-course Dope Dinners are being prepared by chefs in private homes. In Los Angeles, White Rabbit High Tea hosts chic parties that are said to be a “cannabis fantasyland” involving edibles and more.
Your Move, Corporate America
From these signals, it’s clear that marijuana, once legalized, is positioned to be a disruptor and for years to come. Millennials would rather smoke weed than down a brew and we expect Generation Z to stay on that preference path.
As we march towards full legalization, those in the pot business are laying the foundations of a well-organized industry with “creative cannabis agencies” like Los Angeles’ Green St. creating high-design packaging and advertising. I happen to know firsthand that many Fortune 500 companies are already exploring the possibilities, from adding marijuana-derived ingredients to food and beauty products to investing in some of the high-growth businesses that are dominating the markets in Colorado and California.
Things are undoubtedly complicated for the big players, though. Some are all in with tobacco companies investing heavily, but for others, the market is rife with complications. There are issues with finances (federal law considers marijuana a controlled substance, and therefore banks and credit unions won’t accept deposits from these companies). And the fact that it’s still currently illegal to transport it across state lines means that it’ll be a while before we see a product from someone like Kraft that’s spiked with THC. But it’s coming.
Owning Your Future
My advice: Mobilize. The Fortune 200 should know this by now. They took their time getting into the bottled water business and almost missed the boat. Their play-by-the-rules, puritanical makeup has historically prevented them from getting in early and transforming tomorrow.
Now is the time to act. Sure, the biggest brands – the household names – will have to parse whether they have consumer permission to enter the cannabis marketplace. Brand value hangs in the balance, as does a parent company’s sense of corporate responsibility.
But let me ask you this: Would your average American accept their favorite peach iced tea laced with THC? Their favorite beer getting them buzzed in more ways than one?
If these products came from established corporations, they could bask in a halo of trustworthiness. Or possibly face massive pushback. Businesses are going to have to unravel the issues and innovate. It’s going to take vision and guts.
Brave new partnerships will emerge – a food and beverage brand will join forces with a pharma company to master the regulatory climate. CPG’s will suddenly seek out tobacco companies with all their know-how. Acquiring indie brands of weed will become the equivalent of the great app boom that began in 2008: A feeding frenzy in which some businesses win big and others get burned.
I have some parting words for business leaders afraid of explaining to their shareholders why they’re investing in “weed.” Think instead about how those same investors will react when they realize you missed out on what’s set to be the fastest growing industry of the early 21st century. Think instead about how you’ll feel when your biggest competitor gets there – and gets the profits – first. And you can never catch up. Don’t believe me? Let’s talk in a few years. We’ll still be here ready to help you capitalize on the changes that are coming.
Faith Popcorn is the best-selling author of The Popcorn Report, Clicking, EVEolution, Dictionary of the Future, and the upcoming Popcorn Report 2025. She is founder and CEO of Faith Popcorn’s BrainReserve, the future-focused strategic marketing consultancy. With a documented 95 percent accuracy rate, Popcorn has been called “The Trend Oracle” by the New York Times and Fortune Magazine named her “The Nostradamus of Marketing.” What distinguishes Popcorn’s brilliance is her practice of Applied Futurism, which translates her cultural trend insights into actionable business strategies to help the company’s Fortune 500 clients reposition established brands/companies, develop new models and innovate the newest products and services. She is a trusted advisor to such companies as Allergan, American Express, Avon, Bayer, Campbell’s Soup, Citigroup, GE, Johnson & Johnson, Kellogg’s, KFC, Mars, SC Johnson, Tylenol and The United States Postal Service. Visit www.faithpopcorn.com for more information.