There are serious trust issues within the CBD space. Between a lack of regulation and the lack of transparency, consumers are rightfully cautious about making purchasing decisions.
Here are four things CBD brands should be doing to build consumer trust:
1. Go organic
The U.S. Department of Agriculture’s organic certification program is a rigorous multi-step audit process to increase supply chain sustainability. Organic certification is a form of elective, self-regulation for manufacturers that consumers have eagerly welcomed.
According to Nielsen Data cited in a recent Bloomberg article, COVID has accelerated organic food sales in the United States due to increased demand for health-conscious products, with sales of organic food and drinks surging 25% during the 17-week period that ended June 27.
From a consumer perspective, organic certification provides supply chain transparency and increases confidence with brands and products they already love. It also provides a form of quality assurance to skeptical consumers, especially those who avidly read product labels prior to making a purchasing decision. Members of this “label reader” demographic consistently choose organic products for the quality and transparency it provides with pure and natural ingredients.
USDA certifications allow consumers to make informed decisions while feeling confident that they are purchasing products from reputable sources. Research has shown that the CBD market lacks credibility while consumers are desperately seeking comfort and are eager to purchase from trustworthy brands.
2. Support regulation
Across the board, everyone benefits from increased regulation and trust. Producers need manufacturers to trust processes and products, while manufacturers need consumers to trust their ingredients and labels. On top of this, everyone wants and needs regulators to create and uphold standards that protect the best interests of each stakeholder. Regulation from the federal government will only help to better shape the conversation around quality.
3. Focus on credibility
Trustworthiness, transparency and traceability are important factors for consumers to consider when shopping for products. Brands should also consider these factors when producing their products and while vetting vendors, partners, stakeholders and suppliers.
In the past, product differentiators involved third-party lab testing and providing certificates of analysis from those tests. Today that’s just industry standard. The USDA Organic seal is now becoming one of the hemp industry’s most coveted certifications because of conclusions drawn by consumers. It’s an opportunity for brands looking to adapt to changing consumer preferences, take quality to the next level and invest in supply chain transparency.
4. Pay attention to consumer “wants”
“Clean labelling” is a global, consumer-driven movement that can’t be ignored. Product labels can be viewed as confusing or misleading when consumers don’t understand all the ingredients, which is why certified organic is an important choice to reassure and comfort wary shoppers.
According to researchers, people who are health-minded are more likely to purchase organic food.
Organic certification advances the clean label movement by requiring processes and ingredients to be verified by an accredited certifying agent. This certification allows consumers to feel more confident about the products they’re purchasing.
Josh Epstein is the CEO of Socati, a leading processor of broad-spectrum hemp extracts. He was previously the president and chief operating officer of Nuvera, an international cannabis company that sold for $826 million in 2018. Prior to that, he was a partner with FastForward Innovations, an early stage venture capital firm, and practiced law with the international law firm Baker Botts, where he focused on venture capital, mergers and acquisitions and private and public securities offerings.