Many cannabis companies that are flourishing today owe their success at least in part to branding. Winners in this area have not necessarily invested loads of capital into branding but instead utilized marketing strategies creatively and cleverly.
Marijuana Business Magazine spoke with three executives who came to the cannabis industry from consumer packaged goods (CPG) backgrounds. Here, they share how strict regulations determine marijuana and CBD branding strategy and where the market might go in the future.
Cindy Blum Vice President of Marketing, Elevate CBD, TELFORD, PENNSYLVANIA
Cindy Blum has held executive marketing posts at companies with household names such as PepsiCo, Wrigley and, most recently, Kellogg’s. In May 2019, Chicago-based Blum joined Elevate CBD, a Pennsylvania CBD company whose products are sold at retailers in 10 states and online.
How has your experience with other brands helped you in cannabis?
I’ve been lucky enough to work at some of the top branding companies in the world, and what they all do well is create a niche space for their brands that really resonates with the consumer and lives for many, many years.
I think about my brand as a person. Who do I want that person to be in the world around them? Who are their friends, what’s their job? It really should resonate with who you want to connect with and bring into your world.
Are you saying that a brand should target a specialized audience first, establish itself and then go broader?
You find that core consumer and build from there. And then, it’s often a groundswell. Take Luna bar. In its early stages, it was very, very targeted. Now it’s like a soccer mom buys it, active girl buys it, healthy guy buys it. So it’s often a targeted buildup to a greater usership over time.
How do you find the consumers you want to go after? How do you do consumer research?
It’s not easy given that the category doesn’t really exist. It’s not cereal that’s been around for decades and decades. It’s a new category, and it’s hard to understand what the consumer wants and needs. Learn as much as you can about your potential consumers to make sure you’re on the right track.
You can also ask retailers what they’re seeing and hearing and learning. You can run different ads on social media or through digital that are testing against different target audiences and see who’s responding to you—who starts to engage, who starts to buy.
The biggest thing to remember is we don’t have to be perfect out of the gate. It’s important to keep learning and optimizing as you go. That will bring the consumer really to life, because then you start getting data from all the advertising you’re doing. You start to really understand who those people are.
How do the regulatory complexities of CBD affect your job?
Coming from a world where you could do most things, it really does make you think differently and act differently. We’re not able to expand the product line as much as we would like to because of some of the compliance issues. Many TV, radio, digital outlets just will not take your brand—or they will not take certain ads from you or certain words or certain hyperlink URLs. So you’ve got to keep testing it and seeing what you can get through and what you can’t.
What would you say to those who believe branding isn’t important and it’s better to concentrate on price and quality?
The latest estimate that I’ve heard is that there’s 3,500 brands in CBD alone. If you are not resonating with your potential shopper, how are you ever going to win the game? If it was just strictly on price, I’m just going to buy the cheapest one that’s on
the shelf.
It’s a psychological thing. People want things in their life that they feel connected to. It’s why we buy certain jeans and certain cereal, and it’s going to be why you buy certain CBD brands. And maybe consumers are not quite there in all states yet, but I think branding is ultimately what sets every brand apart—and is what will be the difference between success and failure.
Stephen Horgan Founding Partner, InterContinental Beverage Capital, Atlanta
After spending decades in high-level branding posts for companies such as Coca-Cola, Molson Coors and Walmart, Stephen Horgan helped launch InterContinental Beverage Capital (IBC), a partnership of former beverage and CPG executives that helps young companies develop their brands. This includes a growing roster of cannabis companies, such as Ceria Brewing, an Arvada, Colorado-based business producing THC-infused nonalcoholic beers for the Colorado market with the goal of expanding nationwide.
How does your experience working with major mainstream brands help you with Ceria—or not help because cannabis is so unique?
Being professionals and longstanding experts in beverages and CPG, we basically know how it should work. But that doesn’t mean that’s the way it’s working in the cannabis world right now. As we got into it, we made some assumptions that the industry was a little bit more mature and evolved than it actually was.
We started to build Ceria and create a brand position for it as the world’s first cannabis-infused nonalcoholic craft beer, and what we found was that we were mostly competing with products, not brands.
What role does distribution play in branding?
Distribution puts your product in the hands of the consumer. So we find ourselves advising, consulting and helping people who bring beverages to market on how to handle beverages in the transportation process, how to talk about it to the dispensaries. And it’s a continual learning process. We’ll share information in the beginning about what the product is. We create materials that they’ll provide to the dispensaries. We’ll do some co-marketing on our social media.
We have to ship it to a licensed infuser or manufacturer who typically is the distributor, too. So they will buy the product from us, infuse it with THC to our standards and then use our packaging. We’ve created the packaging and the brand; they assemble the product.
How did you develop the brand art and design?
The chief customer officer at Ceria is one of our partners at IBC, Doug Christoph. He’s been in branding for 30 years. He basically lays out what the brand is all about before you come up with the name, how we’re different than other products out there. And then you try to find attributes—like agriculture is something that we latched on to. We have the Roman goddess of agriculture on our cans and she has a cannabis wreath around her head instead of the typical laurel.We probably had seven finalists for our packaging, and the one you’re looking at is the one that we decided on.
How do you assemble a consumer focus group?
It’s a very traditional and relatively inexpensive way compared to some studies to get feedback from customers. But the feedback is specific to the people you’re talking to. The focus group is not as scientific. It’s more of a feeling and the way people react. And then you tweak some things so you can do it in a shorter period of time for less money.
You can do large focus groups, but a focus group is probably typically 12 to 20 people, 25 maybe. It’s not that much different than when you walk around in a mall and somebody might take five minutes to talk to you.
What do you think the future of branding holds?
We see a tremendous amount of opportunity for traditional branding to be applied in the cannabis space. There’re some very good products out there, some good distributors, some good retailers. But consumers buy brands because they want to associate with brands.
If you’re just selling toilet paper or laundry detergent, unless the consumer is buying Tide or a Coca-Cola, there’s no reason for people to spend more money on the category. They’re just going to buy what’s cheapest. Branding brings the opportunity for everybody in the value chain to realize more value.
Jann Parish Chief Marketing Officer, Green Growth Brands, Columbus, Ohio
Jann Parish joined Green Growth Brands, a vertically integrated multistate THC and CBD company based in Ohio, after years in the fashion industry. She was responsible for developing branding strategies for Calvin Klein, Tommy Hilfiger and, most recently, Victoria’s Secret.
How has your fashion industry experience helped you brand Green Growth Brands?
There are some similarities in that you’re looking to acquire and retain customers. And those universal truths are:
- How the brand makes you feel.
- The values that it possesses.
- What elements about the brand are attractive to you and how you relate to them.
- What people who’ve come out of CPG or fashion retail know how to do is talk to the customer. Advocacy in the fashion space is typically about building your tribe. It’s about people who are like-minded.
I’ve found the cannabis space to be one that requires that sense of community and that sense of advocacy.
How do you get consumers to open their wallets for your brand?
Identification. Take 8Fold, which belonged to The Source and which we acquired when we acquired The Source. It was their open-price-point product. We wanted to keep the price point because it was very accessible, and we wanted to make it stand out from the rest of its competition.
As an example, we created a summer line, and each product told the story around that. Or in fall, we had Tailgate. When holidays came around for 8Fold, we had products that spoke to that moment in time, too. They were giftable. That has attracted a whole new customer where one didn’t exist before. That kind of goes back to that idea of what CPG and fashion retail executives can bring to the table—storytelling and some additional color.
What would you say to those who believe companies should focus on price rather than branding?
Our moniker at The Source is “best flower, best price.” The customer is very aware of price—and, of course, they want the best possible deal—but that is no different than any other consumer category out there. It’s no different than fashion or toothpaste, for that matter.
What I will say about branding and this space is once upon a time the soft drink industry was nascent, the bottled water industry was nascent. Branding is what sets them apart.
How do you do consumer research?
The first thing you do is develop a loyalty platform. Understanding what your consumers are buying and when they’re buying it is the biggest piece of that.
It’s probably too soon for syndicated research and large-scale studies, given the state-by-state challenges. Research is possible with the customer base you have today. Loyalty (programs) can give you a back view of where marketing strategy has been effective, trend spotting, talking to the customer as to why they don’t buy something—that’s going to be what you can use in the near term.
What about reaching out directly to customers?
The biggest piece of research for us are these conversations we have with consumers who come to our educational seminars and the store. The relationships that customers develop with your sales associate or budtender are also really important. A lot of what we do is listening to our sales associates and hearing what they have to say.
One of the things we also do—particularly with our CBD brands—we’ll approach a customer as they shop, talk to them and then get their feedback. We’re not in a retail or CPG space yet where we can have really defined methodologies. What we’re relying on is the early adopter and new customer feedback about products and service.
(These interviews have been edited for length and clarity.)
