Cannabidiol, or CBD, had its first big wave of attention in 2019 – but interest has somewhat waned since. While the US market is estimated to be worth around $10bn, in the UK it’s still valued at just £300m.
However, wellness CBD and prescription cannabis brand Cannaray believes the category is due a “second wave” and is on a mission to establish itself as the best-known brand in the market.
CBD is derived from the Cannabid sativa plant, otherwise known as hemp or marijuana. It’s a naturally occurring substance that’s used in products like oils to impart a feeling of relaxation and calm, as well as pain relief, but is crucially not a psychoactive and does not sedate or alter the mind.
The challenge around the initial “big buzz” in 2019 was that the CBD market had yet to become regulated, meaning there was still an element of doubt among consumers, explains Cannaray CMO Tim Clarke.
“When you bought products you weren’t that sure what you were getting,” he says. “People still had questions in their mind around whether it’s legal, is it safe, how do they take it and what do they use it for?”
We’re trying to move the brand away from the cannabis subculture. So everything we do across the brand is about making it easy and removing stigma.
Tim Clarke, Cannaray
A lot has changed over the last 18 months. The CBD market is now regulated by the government’s Food Standards Agency, which means consumers can be sure what they’re getting is legitimate and safe.
It also means retailers are stepping into the category in a big way for the first time. While Cannaray was previously stocked in Tesco’s in-store pharmacy, earlier this year the supermarket moved CBD into its vitamins section. According to Clarke, that was a “really big step to normalising the category”.
“It’s quite a big move. CBD is moving away from being a health food speciality and ecommerce play, to becoming more mainstream,” he says. “We’re at the start of the second wave, which is a regulated market and retailers coming in, and also the move towards creating brands.”
Cannaray’s UK and US founders believe that brand will become the most important differentiator on the business’ wellness side. Clarke was recruited in the summer of 2020, bringing with him over 20 years’ experience across brands including Reckitt (then Reckitt Benckiser), Bacardi and Innocent Drinks, where he served as CMO from 2015 to 2019.
Bringing the revolution to TV
In bid to take an early lead, Cannaray has today (23 August) launched the UK’s first major TV push for CBD with a new ad, starring Strictly Come Dancing co-host Claudia Winkleman.
Created by independent agency BigSmall – which also developed Cannaray’s visual identity, packaging design and outdoor posters – the ad shows Winkleman explaining how she thought leading the CBD revolution would mean “marching through a forest, wearing a ridiculous outfit” and shouting “CBD for the people”.
Instead, Cannaray just wants people to try the product for the first time.
The 30-second spot is a continuation of Cannaray’s ‘Join the CBD Revolution’ campaign, which launched in July with high profile outdoor executions. The campaign, planned by media agency Goodstuff, saw ecommerce sales double within four weeks.
One of the “hardest” parts of creating the campaign was deciding how best to communicate what the product does, Clarke says, as food supplement stipulations dictate the brand cannot make medicinal claims.
“People want to know how to use CBD, but I can’t tell them that because it’s not regulated for those things,” he explains. “So my approach is show not tell. [The campaign] is about demonstrating that CBD is now normal, popular, mainstream and trusted.”
Winkleman was specifically chosen as an ambassador as she is well-known, trusted and can speak with authority as an existing CBD advocate.
In a notable departure from the strategies of some other brands in the market, Cannaray does not use any cues related to cannabis, such as images of its leaves.
“The whole purpose of the campaign is to start to normalise CBD,” Clarke says. “We’re trying to move the brand away from the cannabis subculture. So everything we do across the brand is about making it easy and removing stigma.”
In undertaking consumer research prior to the campaign, Clarke wanted to establish the emotional tie to CBD, investigating how chronic health conditions make people feel. Lots of the language that came through was “dark” and “burdensome”.
“That led a lot to the brightness of the campaign. People wanted a brand which was going to be optimistic and which had values about freedom,” he explains.
Those values are similarly reflected in the sun within its logo and the ‘ray’ in Cannaray, he adds: “We’ve introduced a very positive revolution by thinking about what consumers want.”
People seem slow to the game and to realising that it’s a branded market like any other part of FMCG. That’s why we’re stepping in to take brand leadership.
Tim Clarke, Cannaray
However, Clarke remains cautious of not “over-promising”, as CBD is a food supplement and not a miracle cure for major health conditions.
“It’s very tempting as a marketeer sometimes to promise the world,” he reflects. “We didn’t do that. We’ve really calibrated it for what people want. And we’ve not tried to over explain and go into a million reasons why you should buy CBD – it’s not a hard sell campaign in that way. It’s really just demonstrating that the category has arrived, so jump on board.”
It’s somewhat unusual for a small, relatively new brand to launch straight into mainstream advertising, with most opting to kick off through digital channels. However, CBD advertising on platforms including Facebook and Google is extremely restricted due to US policies.
Regardless, Clarke still believes now is the right time for a TV campaign to build awareness of both the brand and category – particularly as distribution of its products becomes more widespread and easily accessible.
Brand vs quality
Meanwhile, the rest of the CBD market is lacking when it comes to major players.
“It’s not a very well branded market,” Clarke notes. Primarily that’s because brands have previously concentrated on differentiating their product based on quality, he explains, but with the market now regulated, quality is a given.
Media spend for the whole of 2020 across the entire category totalled less than £1m and as such no UK CBD brand can claim more than 10% prompted awareness.
“That’s why it’s important for brands to step up,” says Clarke. “People seem slow to the game and slow to realising that it’s a branded market like any other part of FMCG. That’s why we’re stepping in to take brand leadership and build the category.”
Over the next 12 months, Cannaray will be spending £3m on media – three times the spend of the category last year.
The brand’s goal is to bring more people into the market and subsequently trigger sales. Cannaray’s target audience is the over-40s who are more likely to have health problems related to chronic pain, inflammation and sleep, as well as the 20-30 year-old demographic, who experience higher rates of anxiety.
Not only is differentiating on brand going to be important to appeal to consumers, but retailers have also been looking for a business to step up and lead the category, says Clarke.
“We think that because it’s now a regulated market we will start see consolidation and so we’re keen to make sure that we are at the heart of that consolidation,” he explains.
“But we recognise that we’ve got both a category and brand responsibility. Personally I’m not interested in a bigger share of a small pie. I would far rather be leading the charge in making the category huge.”
Having said that, Clarke admits that it would be “fantastic” if two or three other brands were also committed to growing the market. He believes that categories thrive when they have strong competition and multiple brands growing the category together.
For Clarke, entering the CBD market has been an interesting challenge, as there’s no existing “roadmap” for Cannaray to follow.
“I’ve found in my career that some marketers really struggle with lack of structure and a lack of a template,” he reflects. “Don’t be intimidated by the blank sheet of paper. Go and create the roadmap yourself.”
To do so, it’s important to always come back to understanding the consumer motivation and putting that at the heart of your strategy, Clarke advises. Ultimately, Cannaray’s goal is to become both Europe’s biggest wellness CBD company and its largest prescription cannabis business.
“I’m determined to lead this revolution,” Clarke adds. “It’s not just a consumer revolution, it’s a whole category and business one.”