CBD Gains a Foothold in the Tea and Coffee Market in Europe

Cannabidiol, commonly referred to as CBD, is one of the hundreds of naturally occurring compounds, or
cannabinoids, found in both cannabis and hemp plants. The two most common and best-understood cannabinoids are THC, which is the abbreviation for tetrahydrocannabinol, and CBD. This first is responsible for the psychotropic effect, commonly sought by recreational users. CBD, on the other hand, calms down the nervous system, causes no addiction, and is believed to be generally safe.

Currently, CBD is actively used and studied as a treatment for several diseases and conditions, including epilepsy, Alzheimer’s disease, and anxiety. However, the scale of its medical use is not compared with its popularity as a food supplement. Emerging reports focusing on the potential health
benefits are gradually turning CBD into a new big thing in the European food industry.

By 2023, the European CBD market is anticipated to be worth EUR €1.41 billion (USD $1.42 billion), estimated Pune, India-based market researching agency Future Market Insights.

“The CBD boom has taken the world by storm in recent years, indicating the tremendous potential for global economic growth. With the rising popularity of CBD, internet sales have made it possible for sellers to reach markets that would have been difficult to reach otherwise,” commented Nandini Roy Choudhury, client partner, food and beverage at Future Market Insights.

The market for CBD-infused beverages in Europe is anticipated to reach approximately €250 million by the end of 2022, and this segment remains resilient with a compound annual growth rate of around 15 percent predicted up until 2031, Persistence Market Research, a New York City-based think tank, estimated. “CBD-infused tea and coffee sales performance is set to follow its parent category’s robust growth trajectory,” it said.

The CBD coffee and tea market keeps growing globally with more companies setting their sights on this segment. For example, Jak Brew Co of the UK announced plans to launch CBD-infused ground coffee in January 2022, to be sold on its website as well as at several retail outlets across the United Kingdom, Choudhury noted. In November 2021, Lamborghini signed an agreement with Flora Growth Corp – a large cannabis producer and processor with a growing portfolio of luxury cannabis and CBD brands – to produce and sell Lamborghini CBD coffee across North America and in Colombia.

Dawn of CBD Beverages in Europe

The CBD-infused tea and coffee markets are estimated to grow with a CAGR of 27.4 percent during the forecast period of 2022-2025, Future Market Insights said, adding that in Europe the CBD industry is still in its early days so the growth opportunities are too good not to be considered by entrepreneurs, as consumer interest in CBD-derived products has risen rapidly and continues to grow fast.

According to reports from Persistance Market Research (PMR), demand dynamics for CBD-infused tea and coffee remain promising in the European marketplace, with consumers gravitating towards them for healthful indulgence. The food service sector in Europe is also catching up closely by directly incorporating CBD concentrates in ready-to-drink coffee and tea. However, CBD-infused coffee beans and tea leaves remain more mainstream innovation.

Image courtesy of Kuribl

Product innovation and development remains a cornerstone for the underlying growth traction, and it is fuelled by the start ups dominating this space, the company said, listing Marley’s Mellow Mood, Botanic Lab’s Dutch Courage, and Hempful Ltd among the main brands eyeing to capitalise on CBD-infused
beverages in Europe. Furthermore, PMR reported that e-commerce is emerging as a demand accelerator with a significant portion of the sales of CBD-infused tea and coffee taking place online. Companies have also developed dedicated platforms facilitating direct online sales from their websites.

As the CBD market evolves, CBD-infused coffee and tea products are projected to move toward mainstream retailers in the coming years.

Legal Issues are Sorted

Over the past few years, the incredible amount of uncertainty surrounding the legality of CBD has
crippled the initiatives of many entrepreneurs, Choudhury admitted, explaining that CBD is legal in most countries in Europe and around the world, but the problems are related to the cannabis plant.

“Because CBD is an extract from the cannabis plant, which is illegal in many countries, CBD’s legality is steeped in lots of regulation and legislation. This means that not everybody can grow, produce, or purchase cannabinoid-derived products,” said Choudhury. He added though, that unlike the CBD market in the North America where competition is fierce, the European market offers bright prospects for CBD companies because the competition is less intense so they can operate in a more comfortable environment.

The status of CBD products in the European Union market has not always been very clear. CBD products were not covered by the European Novel Food Regulation until 2018. However, even after this regulation was amended, it took European companies several years of legal battles to make CBD in food fully legal. In November 2020, the European Court of Justice published a judgement stating that cannabidiol extracted from the cannabis plant should not be considered a drug under the 1961 United Nations Single Convention on Narcotic Drugs.

It was also decided that EU countries may not prohibit the marketing of CBD products lawfully produced in another EU country when it is extracted from the Cannabis sativa plant in its entirety and not solely from its fibre and seeds. This decision has technically created the entire European market of CBD products.

“So now that manufacturers of CBD-infused coffee and tea know for sure that CBD oil is legal in most countries in Europe, they can start preparing business expansion plans. Company transparency is crucial in the CBD wholesale space, especially when planning to work in different countries in Europe, each with its local regulations,” Choudhury said.

Health Benefits in the Spotlight

Over the past decade, the background around health benefits provided by CBD was just as confusing and controversial as its legal status in Europe. Still, several studies rolled out during the last few years proved that CBD could indeed battle stress, as well as provide some anti-inflammatory and antioxidant properties. Additionally, some studies suggested that when added to coffee, CBD can eliminate the caffeine crash, as well as taper off mood swings or anxiety from caffeine use.

Both coffee and CBD activate some of the same pathways in the human brain, according to a study
published in The Journal of Internal Medicine. It was discovered that CBD’s effects can actually help counteract some of coffee’s negative effects, including insomnia and concentration loss.

“The neurotransmitters related to the endocannabinoid system – the same ones affected by cannabis – decreased after drinking four to eight cups of coffee in a day. That’s the opposite of what occurs after someone uses cannabis,” the scientists reported.

Furthermore, a 2018 study published by Frontiers in Pharmacology revealed that CBD could improve
the quality of sleep. It was discovered that for those having regular sleep cycles, taking an appropriate
amount of CBD induces a sedative state. CBD was also shown to help stabilise sleep cycles, so adding
CBD to coffee was said to lower the chances of a consumer getting coffee insomnia and feeling groggy and tired the next day.

CBD is primarily valued not for taste, but health benefits, so scientific findings remain crucial for the future of this compound in the food and beverage industry.

Mike Efting, president of the Dallas, Texasbased food additive company, Viachem, is confident that CBD coffee and CBD tea may provide energy ‘without the jitters’, especially for those sensitive to caffeine, because the CBD neutralises the adverse side effects of drinking caffeinated beverages. “Even for those
who don’t drink caffeine, sipping decaf coffee and tea infused with CBD is still an accessible way to reap the benefits of CBD while masking its flavour with a tastier one,” he told Food & Beverage Insider.

“The health halo of CBD is a key growth facilitator for driving the sales of CBD-based edibles including tea and coffee,” PMR stated, adding, “combined with this, is stimulating – caffeine – and inherent antioxidant properties offered by these beverages. Sensory enhancement in terms of taste and aroma for CBD-infused tea and coffee obviously acts as a complementary aspect in sales contribution.” PMR stated that it is primarily the therapeutic properties of CBD that are at play, noting that the research activity and clinical studies pertaining predominantly to CBD concentrate are in the embryonic stage.

According to PMR, companies can raise awareness by highlighting the non-psychoactive nature of CBD and its medicinal utilisation in addressing a vast variety of conditions such as epilepsy, chronic pain, inflammation and even autoimmune diseases.

  • Vladislav Vorotnikov is a Batumi, Georgiabased multimedia B2B freelance journalist
    writing about the tea and coffee industry since 2012.

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