COWEN COLLABORATIVE INSIGHTS
38
February 25, 2019
Beverages
Over the next two years, we believe that the beverage category can grow to a $900 mm revenue opportunity. Our conviction in this category is underscored by our proprietary consumer survey, which shows that almost 20% of CBD users consume beverages, which we view as an encouraging sign. For 2019, we are forecasting a notable acceleration in growth, with revenues more than doubling to $600 mm. Assuming growth moderates in 2020 (to 50%), we believe revenues will approach the $1 bn mark.
Figure 57 Sales for Beverages Can Approach $1 BN Over the Next Two Years
$1,000 Total Beverage CBD Sales ($ inmm) $900
$800 $600
$600
$400
$200
SO
2018 2019 2020 MBottled Water MEnergy Drinks Beer
Source: Cowen and Company
Below we provide a sub-segment build by category, where we believe CBD water will represent the lion’s share of sales at 65%. Energy drinks have been focused on health and wellness and we believe that CBD-infused energy drinks will represent a niche segment in a category that continues to see more competition. We expect CBD beer to have a place in the category, though should admittedly be smaller in scale, given less interest from a lack of THC.
Figure 58 CBD Water Should Have An Outsized Contribution On Category Sales
CBD Sales Mix by Sub-Category
Beer 15%
Energy Drinks 20%
Bottled Water 65%
Source: Cowen and Company
COWEN.COM
HOUSE_OVERSIGHT_024854