By some accounts, CBD is growing faster than cannabis in the U.S. and will soon be a $22 billion industry. This is a category set to explode with significant impact on over-the-counter (OTC) drug sales. Big pharma are not just taking notice, they’re taking action by investing in CBD in an attempt to control and profit from its growth. But can traditional drug makers protect their current cash cows at the same time as developing the new CBD products that are threatening their traditional appeal and profitability?
Consumers who report using CBD (and other cannabis products) do so for many reasons: from relaxation and sleep issues to pain management to emotional and mental health. This puts CBD in direct competition with a wide range of consumer products and early indications are that OTC medication use drops significantly among adult cannabis and CBD users. In many ways, this is of their own doing.
Mucinex promises 12 hours of relief, With “quick actin’” Tinactin, the benefit is in the positioning and Orajel does one better, promising “instant pain relief”. At the same time, reports of questionable pricing and lobbying efforts are contributing to greater suspicion of these companies and their products.
Can you imagine a natural CBD product, proven to work with the same effectiveness, making the same OTC claims, available in the same locations? Feels like a big disruption to business as usual, right?
Well, it will be if marketers approach it with both current and future consumers in mind. Current, early adopters are sold on CBD and evangelizing it as a wonder with practically limitless applications. Future consumers of CBD will take some convincing and a little hand-holding.
Instead of going the way of herbal supplements and holistic remedies that are popular but still niche, smart marketers will most likely adopt current OTC semiotics and packaging to have mainstream appeal and a sense of familiarity while marketing their differentiation in ways that are not a big leap for consumers.
At the same time, they will be rapidly innovating and testing new products to better fill existing needs in broader applications while identifying and filling unmet needs—some of which may be out of the reach of OTC drugs.
Further out, they will be planning to push beyond the category conventions and position themselves as apart from—and better than—traditional OTC drugs, with their own semiotics, points of comparison and consumer language.
This quick to-market approach with a long-term strategic vision presents a nimbleness and flexibility that cannot be matched by the status quo. This begs the question: how can big pharma have its cake and eat it too?
By Marco Marsan and Joe Konietzko of Marco Polo Explorers