CBD has very quickly become mainstream in the UK shedding its image as a ‘legal stoner alternative’, to become one of the hottest ingredients receiving endorsements from celebrities, sports personalities and more.
Since CBD exploded onto the UK scene there have been many different iterations and products to hit the market, and with every imaginable product available from gummies to infused coffee, it seems the sky is the limit. But with the Novel Foods Act requirements coming into play in March 2021, there is a dark cloud hanging over CBD companies in the UK.
What is the FSA’s Stance on CBD and the Novel Food Act in the Light of COVID-19?
The Novel Foods Act (given oversight by the Food Standards Authority in the UK), gives some background as to why CBD firms are pivoting to topicals.
The CTA submitted a request to the FSA for an extension to the 31 March 2021 deadline, only to receive a response (dated 9 April) that the FSA deemed that CBD firms will have had over two years to submit their applications and that COVID-19 had not rendered CBD businesses incapable of submitting their applications to meet the deadline.
The CTA was quick to refute the FSA’s assessment, saying that, “we consider this demonstrably incorrect. Many of our members have had to furlough staff, and in lockdown, business activities will clearly reduce. Staff in the laboratories and other ancillary industries will also be in lockdown, and therefore capacity will be substantially reduced.” Especially in light of the way that many CBD businesses have pivoted to aid the NHS and other healthcare facilities in response to the COVID-19 pandemic.
The CTA also went on record saying, “A refusal to extend the deadline could see companies that have committed to this fight, potentially fail in the future when they do not have the time to fulfil the requirements for novel foods”.
To read more about the novel food and the regulations for CBD, please have a look here.
Is the market ready for CBD topicals?
Despite the CTA and many individuals petitioning for CBD not to be classed as a novel food, the FSA has been unyielding in their stance which as only been reinforced with their refusal to offer an extension and only those with a valid application can continue to sell their CBD products after next March. It’s no surprise then, that CBD manufacturers are shifting to focus on CBD topicals which present a vast market with great opportunities for growth and expansion, but are not bound by the Novel Food Act.
While the market looks good for topicals, there are a few consumer-centric hurdles that producers will need to navigate. Consumers still have a number of concerns about CBD, which has had a negative impact on the uptake of CBD topicals in non-consumers to date. Chief among the concerns are the quality of the product (52%), the dosage accuracy (45%) and consistency between batches (35%).
This means that for a company to do well, there is a need to educate their customers about where the CBD is sourced from, the manufacturing and testing process and how to use the product optimally. This thinking is supported by 25% of non-consumers who say that they did not know enough about CBD, and 45% who have reported looking for a reputable source of information.
How are CBD sellers responding to the topical CBD opportunity?
While governmental oversight would go a long way to helping people learn more about CBD products, there continues to be a lack of transparent regulations and standards. So, in the light of the UK’s CBD novel food designation, and the disruption that it has caused to the industry, the manufacturers of CBD topicals are setting their own standards and making them available to the public.
The two main benefits that the transparency offers are consumer education and consumer confidence. Whether the secondary goal of alleviating concerns of government oversight (or lack thereof) is another matter, but proactive steps taken by retailers such as Sephora are setting the bar high.
For CBD-infused products, their standards include:
- CBD sourced from US-grown hemp
- Only containing full-spectrum or broad-spectrum CBD extracts (no CBD isolate)
- Certificates of authenticity for all products, to be supplied to customers upon request
- Tested a minimum of their times for purity and quality
- Comply with Sephora’s “Clean Sephora” standards (which bans the use of ingredients parabens, mineral oils and other possibly toxic ingredients
This will make a big difference for consumers as the transparency will allow them to do their own homework before purchasing, and they know that the products they are using are ‘clean’ and ‘safe’. Given the lack of federal guidelines and the relatively obscure standards observed by most CBD-producers, Sephora’s approach offers an interesting alternative for potential consumers as it addresses their concerns about the lack of information and certainty regarding CBD-infused products.
What market share do CBD topicals have at the moment?
According to research by New Frontier Data, most people choose to consume CBD orally, with oil and tinctures being the most popular at 53%, followed by pills and capsules at 22. CBD-infused topical and cosmetic products are gaining traction although their market share is under 20% which is low when you consider the scope of CBD topicals that includes massage oils (6%), body moisturisers (5%), bath products (4%) and facial skin products (4%).
Are there certain types of products should CBD companies be focusing on?
In order for CBD companies to grow, they need to be reaching new customers that haven’t tried CBD before. In addition to building trust through transparency and education, research shows that the types of products that non-consumers are interested in closely mirror the products on the market that are already proving to be the most popular. Massage oil is the most popular at 7%, body moisturising products at 5%, and both bath and facial products at 3%.
What benefits are people looking for from CBD topicals?
With much research being done on the effects of CBD when applied to the skin, preliminary studies are showing that CBD can help with:
These are common concerns for many in the UK which show that the marketing opportunities for CBD-infused topicals in the UK are close to limitless as over 10 million adults live with arthritis and related conditions, up to 15 million live with eczema, and over 30% of women in the UK (across all ages) have tried an anti-ageing cream. And with women in the UK spending over 1.15 billion pounds a year on facial skin care, there are exciting opportunities for CBD brands that can match their products with the market demand.
What about combining CBD with other ingredients?
CBD offers the much-lauded entourage effect, which increases the efficacy of each of the health and wellness supporting benefits of CBD’s individual compounds. But it is also thought to work in synergy with other naturally occurring skincare ingredients such as:
- Peppermint and lemon essential oils for energy
- Lavender essential oil for sleep
- Lemongrass for relaxation
- Copaiba essential oil for inflammation
In terms of bases and carrier oils, the best options are jojoba oil, beeswax, shea butter and cocoa butter. This presents an opportunity for CBD companies to align their products with other ingredients that are already established in the marketplace. Using other essential oils and high-quality carriers could definitely help with market penetration.
Whatever the arguments, the fact remains that unless a CBD company has a valid application that is submitted prior to the 31 March 2021 deadline, they will no longer legally be allowed to sell their products in the UK. Unfortunately submitting an application is not straight-forward and has been likened to the process of submitting a new medication for review. This process is both lengthy and costly, which means that smaller companies will not be able to keep up. CBD topicals are therefore likely to be the next frontier with many opportunities for growth and niching down in an industry that doesn’t have the same level of regulatory oversight.