Smoking marijuana could soon be an obsolete trend
Alcohol consumption around the world is falling, probably because widespread legalisation of cannabis is increasing public interest in this drug. Alcohol consumption fell 15% between 2006 and 2015 in the US, especially in states offering medical cannabis licenses.
Consequently, many big alcohol producers are now aggressively embracing marijuana. Many big distillers and brewers are investing their money into cannabis-infused, non-alcoholic cocktails. Constellation Brands, producer of Mondavi wine and Svedka vodka, recently invested $4 billion in Canopy Growth, a publicly-traded cannabis producer based in Canada. Known for being one of the biggest deals in the cannabis industry, the partnership between Constellation Brands and Canopy Growth aims to produce non-alcoholic, cannabis-infused beverages and other products.
How concerned are alcohol companies?
Molson Coors listed marijuana as one of the biggest possible risks to its business. The company says the emergence of legal marijuana in many U.S. states, Canada and other nations may shift discretionary income from their products and may create a change in consumer preferences, with many moving away from alcohol.
Another popular alcohol brand, Heineken and Molson Coors, has started selling non-alcoholic sparkling water that contains THC (Tetrahydrocannabinol), the major psychoactive component of the cannabis plant. The company has formed a joint venture with cannabis producer Hydropothecary to manufacture cannabis-infused beverages.
Under the terms of their deal, Constellation’s stake in Canopy will increase by 38%, and the company can raise it to 50 percent. However, there are still many hurdles. The Justice Department, operating under Attorney General Jeff Sessions, has toughened its laws on marijuana-related crimes, leading to an uncertain future for cannabis regulation.
Anheuser-Busch to enter the cannabis industry
Anheuser-Busch InBev, the largest of the world’s mega-brewers, may be the next to make a deal with a cannabis company. Last year, CEO Carlos Brito said that the company was trying to learn more about marijuana. There is evidence that the alcohol producer may start selling THC-infused products soon. In fact, the company is investing in the essential infrastructure for this anticipated endeavour.
Anheuser-Busch has appointed a Chief Non-Alcohol Beverages Officer to expand its non-alcoholic beverages department. The officer will support zone teams to boost growth in their exciting alcohol-free section, which represents over 10 percent of the company’s current volume. The company hopes that its this department will account for 20 percent of its overall sales by 2025.
Anheuser-Busch competitors Constellation Brands and Molson Coors are also producing non-alcoholic cannabis-infused drinks. They plan to market cannabis drinks to both lifelong marijuana users as well as newcomers who want to explore the drug in a socially accepted manner.
The shift from smoking cannabis
According to the latest data, THC-infused drinks could be worth up to $15 billion in the United States, if the federal government legalises cannabis nationwide. Another report indicates that cannabis drinks in the Canadian market could generate annual sales worth from $5 billion to upwards of $22 billion. This effect is largely because with the increased freedom that comes with legalization, many people are shifting away from smoking cannabis. Instead, they prefer to use the drug in socially and legally accepted ways, such as cannabis edibles and beverages.
A report from the Globe and Mail shows that top alcohol players like Anheuser-Busch, Coca-Cola and Diageo PLC have been meeting top marijuana producers in Canada over the last few years to discuss their joint ventures. Anheuser-Busch said that they were closely following cannabis legalisation around the world.
Gemma Hart, VP of Communications at Anheuser-Busch, stated that many long-term commercial and societal impacts of cannabis legalisation are still unknown. She hopes that the public health community and lawmakers are examining the issue meticulously to regulate marijuana appropriately in jurisdictions where cannabis is legal.
Merging marijuana and beverages
Anheuser-Busch is the most popular domestic beer company globally – but beer sales have dropped for the past five years. Generation Z and Millennials no longer want to drink alcohol in the same quantities as previous generations. Data also shows that the majority of these people prefer cannabis over alcohol. As the trend continues, expect to see more beverage giants tapping into the cannabis industry to expand their business and keep up with consumer trends.