Forecasted to reach $1.71 billion in sales by 2030, the pet CBD supplement and treat market is rapidly expanding, despite recent pummeling from FDA regulatory uncertainty.
According to Grand View Research, the pet CPD business is expected to produce $248.3 million in sales in 2023 and then continue increasing at a 31.8 percent CAGR (compound annual growth rate) through 2030. Analysts say it will be driven largely by increased consumer demand and advanced research and development investments from makers, all benefiting from the pet humanization phenomenon that has favorably impacted the marketplace for more than a decade.
Passage of the 2018 Farm Bill that formally separated hemp and hemp-derived CBD (non-psychoactive compound) from marijuana products, unleashed a torrent of pet industry market expansion as entrants sprang up to bring new CBD products and forms to market. From treats to tinctures, CBD popularity stems from its effectiveness as answer to a host of compelling pet health indications including anxiety, stress, joint pain, osteoarthritis, seizures (epilepsy), allergies and other mobility issues.
Despite the expanding popularity of these products, the FDA announced officially on January 26 that it would not approve the use of CBD in human and animal products, claiming more work needed to be done to verify safety. The FDA effectively kicked the can to Capitol Hill asking Congress to weigh in. As such, the category exists in a form of regulatory limbo, making other certifications like those from National Animal Supplement Council (NASC) vital to building a mantle of validated trust and credibility.
In a recent media interview Bill Bookout, president of NASC said, “CBD has become popular in the animal industry more quickly, with more consumer demand driven across the entire country, with greater speed than anything I’ve ever seen. At NASC, we position CBD as a natural botanical extractive, similar to other botanical extracts that are out there allowed and marketed every single day, both on the human side as well as animal side.”
Rising pet CBD category specialists, including Pet Releaf, Treatibles and Suzie’s, acknowledge the regulatory conditions – if successfully resolved – could lead to rapid category expansion by drawing more consumers into the fold. Julianna Carella, founder of Treatibles and an early member of the pet CBD business, said confusion around the regulatory conditions can impact shop owners trying to avoid running afoul of state level regulators, while also handing the legacy pharmaceutical industry a cudgel to perpetuate questions around hemp and cannabis plant efficacy.
Despite the FDA waffling, brands claim consumers are demanding CBD therapies because they witness successful outcomes for pets needing relief for anxiety, joint repair and seizure cessation – also reporting anecdotally they found the effectiveness to be superior to standard drug treatments.
A recent study by Mars Petcare’s Waltham Petcare Science Institute, and published by Frontiers in Veterinary Science, concluded that a four-milligram dosage of CBD was effective to relieve the stress dogs experience through separation anxiety or while traveling. Waltham researchers conducted a blind, randomized, placebo-controlled evaluation, that revealed after two hours, dogs treated with CBD showed measurable improvements in blood levels of cortisol, ear temperatures and heart rate. For their part the animals appeared happier, less prone to whining and were in a more relaxed emotional state.
Pet CBD market unfolds
Joint pain is the pet CBD category’s leading indication, currently holding a 20 percent share of the business. Meanwhile anxiety and stress relief are forecasted to be the fastest growing segments at 31 percent CAGR, while the pool of potential CBD customers continues to increase.
According to the Morris Animal Foundation, in 2021 over 14 million adult dogs were reported with osteoarthritis, underscoring the marketplace is fertile for new therapies. Remarkably, in a recent Forbes article on the CBD pet category, the Rightfield Group reported that 73 percent of consumers who buy pet CBD products also use human versions themselves. Thus, once again human market product adoption trends and preference cross the chasm into pet, helping fuel category expansion.
Due primarily to North American consumer familiarity and experience with cannabis, the region dominates the global pet CBD market, representing 40.5 percent of global sales. Not surprisingly, dogs hold the largest share of category revenue based on demand for solutions to chronic osteoarthritis, hip dysplasia and joint inflammation. NASC’s Bookout reports that Hemp also offers a, “potential for nutritional benefits, is a sustainable crop, and can contribute in other ways as a protein and fiber source, with essential fatty acids through hemp seed oil for Omega-3, -6 and -9.”
Three brands are helping establish the foundation of this growing therapeutic category. They all share similar passions and beliefs about the transformational qualities of their products, and collectively see CBD specialization as a personal mission to answer the often “desperate” search of frustrated pet parents for a better way to treat a suffering pet with health and quality of life challenges. They also share like-mindedness in their stories and approach to growing the business.
Specialty channel leads in growing CBD business
Now available in over 6,100 doors primarily in the pet specialty channel, Pet Releaf was founded by husband-and-wife team Alina and Steve Smith. The inspiration for their business fell out of a search for a natural remedy to aging related pain and mobility challenges for their dog, Mattie. She was not improving while on a regimen of traditional drug therapies prescribed by their veterinarian.
“Our dog was having significant mobility issues, impacting her quality of life,” said Alina Smith. “We tried conventional drugs. However, the medicines had side effects making her foggy, hazy. She just wasn’t really there anymore. We wanted to find a more natural solution. We discovered one and that inspired us to start Pet Releaf to help other pet parents.”
Smith attributes Pet Releaf’s rapid growth to “maintaining a focus” on plant-based pet health with premium products specifically targeting need states such as immune health, allergy support, digestion and maintaining normal inflammatory response. Smith said scientific knowledge is required to make high quality, effective products, required to establish trust with retailers and consumers.
“We use third-party testing to ensure and verify our quality – a majority of our products are certified USDA organic,” she added.
Broadest product line in the pet CBD category
Julianna Carella was an early pioneer in the medical cannabis business, starting her Auntie Delores brand in 2008. Eventually, she expanded into the pet CBD business in 2013 with Treatibles, five years ahead of the Farm Bill that reduced barriers to hemp manufacturing.
“No other product in the pet supplement business performs like CBD to address anxiety,” she said. “CBD is a leader in joint mobility regimens. Customers (continue to) tell us how effective our products are for seizure cessation and stress moments like vet visits and car rides.”
Carella believes one of the challenges the emerging CBD business faces is people believing they need to wait for FDA approval.
“Actually as botanical full spectrum dosage form, CBD products would not normally go through the rigorous process of drug trial and approval,” said Carella.
Other misconceptions include confusion around what category in which pet CBD products can be legally classified, since they are technically not drugs, food, or supplements.”
Carella said that product quality is the “defining characteristic” that distinguishes varying business models that can lead to inconsistencies in potency, flavor and texture. All of the emerging brand players believe the quality of ingredients and formulations for CBD products directly correlates to the benefits and outcomes in treating joint discomfort, arthritis or stress.
Brand devoted to CBD education
Caleb Gilmore, who co-founded Suzie’s Pet CBD Treats with Richard Squire, said his company is able to maintain high quality standards by being vertically integrated, from farm to production. “We manufacture our own USDA certified products, so we have direct oversight into quality, process and ingredients,” he explained.
Gilmore believes the CBD category growth rates are impacted by different states’ inconsistent and unique registration and packaging requirements, “that makes it tough for companies to remain compliant everywhere. That being said, we follow NASC guidelines and stay abreast of new legislation while doing our best to be as compliant as possible,” he reported.
Suzie’s leans into education as a hallmark of their business strategy.
“Providing easy to digest, accurate info has always been a core principle here,” said Gilmore. “And we use social media, video, blogs and more resources to deliver helpful content, providing info in an unbiased way.” An entertaining Dollar Shave Club-style introduction video runs at their website to let visitors take a peek inside their operations.
CBD would benefit from a more strategic approach to marketing
CBD products uniquely address a common list of health and wellness challenges for dogs, cats and other animals including horses. The business operates under a cloud of regulatory murk that perpetuates a common misunderstanding between non-psychoactive ingredients and recreational cannabis use – no, animals don’t get high from dosing with CBD. A crazy quilt of varying state level regulations add complexity in go-to-market strategies. Yet the business continues to thrive.
Consumer education is vital for the category to step beyond these systemic challenges and extend its reach into more pet owning households. Yet to do so, without a specialized industry association dedicated to that task to pool resources and tools, it falls on brands to step into the breach. However, the emerging brand websites lean heavily into product feature/benefit selling and self-promotion. These are common tactics that run contrary to what we know about how people engage (or not) with brand communication, how they evaluate perceived risk in purchase decisions and generally how human beings behave on the path to purchase.
People are not analytical, fact-based decision-making machines. Behaviors and actions are controlled to a large degree by the subconscious brain, and that area of human anatomy is influenced almost entirely by emotion; Heart-over-head if you will. It is especially applicable in a highly emotion-driven lifestyle category devoted to raising furry family members. The transformational magic of pet improved outcome stories and emotion-laden pet parent testimonials remains buried in site navigation when it should occupy an upfront and leading role in the brand story.
A more engagement-forward view of “education” recommends deployment of lifestyle-friendly tactics that reach far beyond the walled gardens of brand websites – becoming visible, active members in real-life and online communities meaningful to prospective customers. More investment behind refreshed engagement strategies built on relevant consumer insight can help the exciting CBD business leap even further and farther over its regulatory anchor chain. With the right tools, CBD will continue to surprise the industry as a center of exponential business growth.
Robert Wheatley is the CEO of Chicago-based Emergent, The Healthy Living Agency. Emergent can help pet brands erase ineffective self-promotion and replace it with clarity and deeper meaning in their pet parent relationships and brand communication.