CBD is ‘the caffeine of the 21st century’
The key to selling a CBD product is to not sell the CBD, according to Benjamin Witte.
Witte is founder and CEO of Recess, a CBD and adaptogens-infused sparkling water brand based in New York. The one-year-old company has raised about $6 million in seed funding from as-yet undisclosed investors. Its pastel-hued 12-ounce cans are available in thousands of retail locations on the East Coast and in California.
As Witte sees it, the future of the CBD industry will be about selling and marketing the feeling the component invokes, rather than the uber-trendy ingredient itself.
“The way to think about CBD is as a compound, no more interesting than caffeine or whey protein,” Witte said in an interview during Yahoo Finance’s monthly Breakouts series. “Just a commoditized functional ingredient that’s going to be added to many things.”
“I think the closest analogy to CBD is caffeine. I really believe it's kind of the caffeine of the 21st century,” Witte added. “And, you know, what are the biggest caffeine companies? It's Starbucks (SBUX), it's Red Bull, et cetera. And they don't market caffeine. They market the feeling that the compound enables, which kind of inspired our approach.”
‘Marketing a feeling’
CBD, officially known as cannabidiol, is expected to be a $16 billion market in the U.S. by 2025, according to a Cowen analysis earlier this year. CBD-infused beverages already comprise about one-fifth of the burgeoning market, although tinctures represent the most popular form for users. The substance has been touted for its potential to reduce pain and anxiety, although research to date remains inconclusive about its efficacy and proper dosing.
Looking at Recess’s sunset-colored packaging and slogans like “cool, calm, collected,” it’s clear CBD isn’t the focus. The company hardly promotes CBD at all, noting on its ingredient list it contains “10 mg of broad-spectrum hemp extract.” Witte refers to Recess as a “productivity company,” and said cans can be consumed as a less buzzy alternative to a morning cup of joe, afternoon pick-me-up or bedtime night cap.
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