Interview: Talking Cannabis Beverages with Kindred Canada EVP David Prodanovic

The Kindred Canada portfolio of cannabis beverages includes the brand everie.

For a preview of future trends in cannabis beverage in America, look to Canada. Our neighbors to the north officially legalized recreational marijuana nationwide in 2018. That provides a look ahead for how the industry might play out longer term in the U.S., as CBD’s popularity continues to grow, and federal legalization increasingly gains support in Washington D.C.

With that in mind, we recently sat down with David Prodanovic, Executive Vice President and General Manager, Kindred Canada. Kindred is the Canadian cannabis brokerage firm for Breakthru Beverage.

Beverage Wholesaler: What do consumers look for in cannabis beverages?

David Prodanovic, Executive Vice President and General Manager, Kindred Canada

David Prodanovic: High THC and great taste are two characteristics driving consumer behavior when it comes to cannabis beverages. Beyond that, consumers seek options at a more affordable price point, plus products that contain natural flavors and low sugar. The latter two speak to the broader health-conscious consumer behavior trend that transcends industries. Our portfolio captures a good mix of options for consumers, including two different brands of tea bags that are a mix of THC and CBD, and CBD sparkling beverages in a can, all of which have been well received in the market.

BW: What’s the demo for CBD drinks? How about THC?

DP: For CBD drinks it’s a lifestyle choice. We see health-conscious consumers looking for benefits to help with sleep, anxiety and pain management, among others. When it comes to demographic trends, it leans slightly towards female consumers, both current and new CBD users.

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THC drinks are different in that we see male consumers favoring this format, often with the highest THC possible. In most cases these drinks are sought out by current cannabis consumers.

BW: How important are flavors for these drinks?

DP: It’s the most important factor, along with sugar content. Those products that offer great taste and low sugar are leading the pack. Health-conscious consumers are always looking for approachable, natural flavors that are not overly sweet. Our portfolio has a diverse mix, and we counsel our suppliers on high-performing trends in the marketplace, working more as a partner in that sense. This is not unlike trends in the beverage alcohol space.

BW: How important is functionality in cannabis beverages?

DP: The pandemic amplified an already rapidly growing trend for consumers seeking the products they want — when and where they want them. That’s why cans are and will remain the leader, given their ease of use and mobility. When we look at the current market, cans made up nearly half of total cannabis beverages, far outpacing the next closest options like powders or bottles.

BW: What’s next for cannabis beverages?

DP: Right now, cannabis beverages only represent about 2% of total cannabis sales. But we’re confident in the growth potential of this segment, and expect to see year-over-year growth for the next three to five years. There is a high likelihood that these products will gain a similar percentage of market to other edibles in the near future, which is a priority for Kindred, because we see this as a great way to grow the consumer base and, therefore, the size of the market. Drinks also fit into established lifestyle activities, so the more we can get our brands into existing occasions the better  

And of course, innovation is key. Producers need to remain innovative with every aspect of their product, similar to the ready-to-drink (RTD) market, to capture and keep consumer interest.

BW: When will cannabis beverages enter the mainstream?

DP: Cannabis beverages represent a critical opportunity for the industry, given their widespread appeal to regular users as well as new consumers. We see beverages as a critical component of overall industry growth, as consumers enter the market and try products other than flower.

Ultimately, the size of the segment will be somewhat limited, due to current restrictions in place on quantity of active ingredients, as well as a relatively high price point compared to other segments. Regardless, we see a bright future for cannabis beverage, and are excited to help expand it to more consumers.

Kyle Swartz is editor of Beverage Wholesaler. Reach him at kswartz@epgmediallc.com or on Twitter @kswartzz. Read his recent piece Interview: Southern Glazer’s April Alejandro on Diversity and Inclusivity.

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