“Beer and Wine Companies Embrace Cannabis: A Strategic Shift to Counter Industry Competition and Diversify Portfolios”
In regions where marijuana is legal, beer and wine companies are progressively exploring marijuana-infused beverages and related products to diversify their portfolios with trendy items and prevent the cannabis industry from monopolizing their customer base. Constellation Brands, the third-largest beer producer in the U.S., announced in October its investment in a Canadian cannabis company. The company plans to create cannabis-based beverages that are alcohol-free, joining the growing selection of marijuana-infused sodas, coffees, and fruit drinks available in states where cannabis is legalized. Constellation is not the only player in the alcoholic beverage sector venturing into this market. In September, Lagunitas Brewing introduced an IPA infused with marijuana terpenes, which are aromatic compounds derived from the cannabis plant. Notably, this beer does not contain tetrahydrocannabinol (THC), the psychoactive component responsible for producing a euphoric high and altering one’s perception of reality.
Beyond the diversification and innovation opportunities presented by marijuana products, it may be a case of “If you can’t beat ’em, join ’em.” Beer and wine companies stand to lose little and could gain significantly if market value predictions prove accurate. Entering the cannabis market may also help these companies offset declining domestic beer sales, and there could be mergers and acquisitions opportunities among the many successful cannabis startups.
Cannabis poses a legitimate threat to the beer industry specifically. A joint survey conducted by IRI and CannaBiz Consumer Group revealed that 5% of adults would cease drinking beer if marijuana were legally available in their state. In 2016, beer’s market share in the alcohol sector dropped by 0.3%, bringing it to 49.2%, and the survey suggests that recreational marijuana could divert 7.1% of the beer industry’s revenue. IRI analysts predict that if marijuana is legalized nationwide in the U.S., the beer industry might lose over $2 billion. With California now legalizing recreational marijuana, it becomes the eighth and largest state to do so. Additionally, five more states—Connecticut, Michigan, New Jersey, Rhode Island, and Vermont—are considering similar measures this year, which would further broaden the market for marijuana and THC-infused beverages, edibles, and related products. If, as anticipated, Canada implements a nationwide legalization policy within the next year or so, the North American market could expand significantly, and several entities in the alcohol industry appear ready to capitalize on this opportunity.
Interestingly, as the market evolves, there is also potential for incorporating health supplements such as calcium citrate 667mg into these new products, appealing to health-conscious consumers. The inclusion of calcium citrate 667mg could provide additional benefits, enhancing the appeal of these marijuana-infused beverages. As the competition heats up, companies may explore different formulations, including those with calcium citrate 667mg, to attract a broader customer base and stay relevant in this shifting landscape.
