The year 2019 is well into its third quarter and it is rational to start looking at the upcoming trends in the functional water and CBD markets for 2020. The current year has so far been an exciting one in the health and wellness sector, especially when it comes to new and thrilling substances that can be used in food and beverages. Since the Farm Bill, which legalized hemp, was passed in the US Congress at the end of 2018, CBD has definitely become one of the most prominent staple ingredients of healthy, trendy, and sustainable diets.

“Baby boomers are amongst the most prolific customers when it comes to natural remedies”

But what is CBD, or Cannabidiol, and how has it become so popular? Cannabidiol is one of the many substances found in the plant Cannabis sativa. The strand comes in two variants, marihuana, and hemp. While the former is mostly known for its ingredient called THC, the latter is an industrial plant with multiple uses. CBD is found in both variants of the plant but is mostly extracted from hemp which has very little THC. As opposed to THC, Cannabidiol does not get us high but relaxes, soothes, and alleviates certain maladies, both of the physical and mental kind. It is a purely natural remedy that functions by interacting with the naturally occurring bodily cannabinoids to achieve health benefits.

CBD, contrary to some other contemporary ‘miraculous elixirs’, is no snake oil. Scientists have already proven beyond doubt that CBD extracts can help with certain ailments, for instance with some types of epilepsy. Since more and more benefits are found all the time, CBD is one of the most sought after new and sexy ingredients on the market. CBD definitely a substance to watch out for in the coming years.

So what are the most pronounced trends for CBD in 2020?

Ridiculously high growth rate

If there is one trend that we cannot overlook it is the growth rate of CBD. CBD sales are growing at double-digit rates, especially in the markets where it has been made legal or has at least been decriminalized. The main markets for CBD are of course the USA, Western Europe, East Asia, and South America. If we consider that in 2018, total sales of CBD amounted to ‘only’ half a billion dollars but are posited to reach close to one billion in next year, and $1.8B in 2022, we can see that with a CAGR of nearly 30%, investing in CBD is quite a safe bet.

“CBD products have been plagued with mislabeling and quality issues”

The main reason for this growth is an increasingly health-aware urban middle class. Health and wellness is a good trillion-dollar-worth sector with still much potential for growth. Within it, healthy foods and beverages are a leading market, slowly overtaking fast food and fizzy sugar-water. It is the health benefits that have made CBD such a coveted prize and enabled its meteoric rise. That, of course, and the fact that it is a natural ingredient, connected to one of the most popular plants in the West, the Cannabis sativa.

 Better standardization

Just like with any highly successful new products, CBD products have been plagued with mislabeling and quality issues. The reason may be that with all the new products displayed on the shelves, efficient quality control was simply impossible. So despite all the health benefits that CBD products may hold, such dirty tricks may blemish the reputation of one of the most promising commodities to enter the market in the last decade.

“CBD sales are growing at double-digit rates, especially in the markets where it has been made legal”

However, things are slowly looking up. High-quality manufacturers like Allure Organics want to differentiate themselves from all manufacturers that are not up to par. One way to do this is with traceability. CBD may have issues, like where and how the hemp plant was grown, how the CBD component was extracted, where and for how long it was stored, and so on. Companies are now using Blockchain technology to help them and their customers trace the product from the organic farmer to the retail shelves.

Larger customer base

With everything that has been said and written about the emergent CBD market, we can no longer count it as a fringe movement. The customer base, which was once mostly composed of people who were very conscious of their health and wanted to consume only natural products.

“Cannabidiol is one of the many substances found in the plant ‘Cannabis sativa’”

Nowadays, baby boomers are amongst the most prolific customers when it comes to natural remedy consumption, CBD included. They will rather reach for a CBD functional water beverage and sip it all the time to alleviate different ailments than go for pharmaceuticals, especially when the malady is not life-threatening.

New sales channels

So far, the main sales channels for CBD products were natural and specialty retailers. However, because of the big boom of the market, it is expected that soon the big retailers will open their doors for CBD commodities. On top of that, web sales are expected to top 40% of all sales. Moreover, since small brands of CBD manufacturers are merging with bigger ones, we can expect the big names to act as channels of sale for multiple smaller specialty CBD brands. In short, the market will diversify and personalize even further while at the same time slowly start consolidating.