In crowded market, CBD companies must stand out from the pack

BOULDER — While hemp-derived CBD products are more popular than ever, the days of new companies being able to whip up a topical cream or tincture, slap a label on it and make millions of dollars are likely over.

Roughly 1,000 CBD product manufacturers have flooded the market in recent years.

“Name one other class of consumer goods anywhere in the world where there are 1,000 different brands,” Todd Runestad with New Hope Network, a Boulder-based natural-products-industry news and analytics firm, said Wednesday during a Boulder Startup Week panel. “The answer is: There aren’t any.”

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CBD products can be found anywhere from health and nutrition shops to grocery stores to book stores to doctors’ offices.

The wide availability and fierce competition require companies to find unique ways to make a splash if they want to break into the market.

“You have to innovate, and you have to differentiate,” Runestad said.

Companies can differentiate themselves based on hemp-seed genetics and farming and extraction techniques, he said.

“The other thing you should do — you must do, you have to do — if you want to be in this business is have a story,” he said. “Everyone has a story: You’re a fair-trade coffee company that’s planting trees for every bottle you sell; you’re a veteran and you offer veterans discount.”

While the competition for natural-products manufacturers in the CBD space has grown significantly, so, too, has the demand. That is expected to continue.

Sales of hemp-based CBD supplements are expected to reach $520 million in 2021, roughly double the sales total in 2018, according to Nutrition Business Journal data.

Of the natural-product consumers who are aware of CBD, only about 30 percent have actually purchased CBD, the journal found. But 57 percent said they’ve considered buying CBD. This discrepancy indicates that there is still room for new consumers to enter the market.

“There’s no question that there are tremendous business opportunities within this space,” Claire Morton, a senior industry analyst with the Nutrition Business Journal, told Boulder Startup Week panel attendees. “… While a lot of that opportunity has already been realized, I think this is just the beginning — especially when it comes to food and beverage opportunities.”