Studies report that medical marijuana put a notable dent in alcohol sales, with states with legalization protocols in place reporting a 13% decrease in monthly alcohol sales between 2006 and 2015 (source: University of Connecticut, 2017). Further, early findings suggest that alcohol and marijuana consumption are substitutive, not complementary, behaviors which present deeper future risk to category growth.
A look at search trends, which often serve as an early indicator of behavior change, confirms shifts in interest and demand are under way. In states that have legalized recreational use, Google search volumes for “dispensaries near me” and “bars near me” have both increased year-over-year, however, searches for dispensaries are rising at a notably faster clip and surpassing searches for bars in total search volume, suggesting that consumer interest in dispensaries and access to them may be outpacing that of bars.
Consumer Interest in Dispensaries Outpaces Interest in Bars
Average monthly search volume on Google, three months pre- and post- first recreational sales in each state.
What this Means for the Industry and Brands
Legalization is a reality that must be dealt with, but market disruption will lead to market opportunity for alcohol brands that adapt quickly to match an evolved customer journey. Some brands have started to capitalize on the rise of marijuana, through efforts such as launching new infused-flavor variants, but is it enough?
Strength of consumer-brand relationships and peer-to-peer influence remain key indicators of choice and preference, with six in 10 consumers stating they trust information created by ‘people-like-me’ most (source: Edelman Trust Barometer 2018).
So, what should brands be thinking about now?
As audience, communications, and marketing research experts, we can help answer these key questions:
- How will the legalization of marijuana and related trends evolve over time and impact target audiences?
- Where will our brands and products fit within emerging audiences’ lifestyles in this new reality?
- Should brands consider how to keep an edge vs. marijuana on low-energy bonding moments? Could marijuana become a trade-off to Ultra and Super Premium Spirits typically consumed from 6-10 PM?
- Does our audience consider this trade-off, and could it influence their alcohol vs. marijuana consumption moments?
- How can we identify influencers and content mediums that truly drive behavior and perception change?
- How can we most effectively evolve, promote, and protect the brand at a faster clip than category?
If you’re interested in learning more about what this means for your brand or business, email us at firstname.lastname@example.org.
Karim Ahmed is Head of New York at Edelman Intelligence.