October 2019 Digital Issue

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FROM THE DESK OF NPD THE GREAT CANNABIS DEBATE Cannabis legalization offers significant opportunities for savvy foodservice operators Unless you’ve been living under a rock for the past 12 months, you’ve likely found yourself in the middle of the debate on Canada’s decision to legalize cannabis. The federal Cannabis Act came into effect October 17, 2018 and made Canada the second country in the world, after Uruguay, to formally legalize the cultivation, possession, acquisition and consumption of cannabis and its by-products. In fact, Canada is the first and only G7 and G20 nation to formally legalize cannabis in such a way. Whether you agree or disagree with the federal government’s decision, one thing is certain — the new law has transformed the role of cannabis in our society. Not long after the Act was passed, several retailers opened “cafés” that catered specifically to cannabis users. And while most of these locations were not operating legally, it’s become clear there’s significant demand for cannabis and cannabis-related products in both foodservice and retail. While foodservice operators are not yet able to integrate cannabis into their offerings, there’s been much discussion about the next stage of legalization, which will include edibles (food products containing THC) and other forms of cannabis that can be used to enhance certain food offerings (think oils, salad dressings, seasonings, et cetera). While we wait for these decisions to be made, The NPD Group is looking at how cannabis users differ from noncannabis users. UNDERSTANDING THE CANNABIS USER AT FOODSERVICE When comparing users to non-users at foodservice, NPD’s data shows users tend to skew younger, with the 34-and-under cohort representing 45 per cent of traffic compared to 33 per cent of non-users. They’re also more inclined to make foodservice purchases through retail (11 per cent compared to nine per cent) and less inclined to visit full-service restaurants (17 per cent compared to 23 per cent for non-users). QSR usage, on the other hand, remains steady amongst users. While users eat out at QSR as often as the average CREST visitor, their brand preferences vary slightly. They’re more inclined to visit QSR pizza, burger and sandwich concepts and less inclined to visit QSR coffee locations (an ironic finding given the initial media focus on “pot cafés” post-legalization). All off-premise access modes are overdeveloped among cannabis users, including delivery. And while there’s no obvious daypart that’s over-developed among cannabis users, breakfast sandwiches and hash browns are among the most over-developed menu items. In terms of beverages, alcohol consumption is on par with cannabis users, while coffee is under-developed. Soft drinks, iced tea, smoothies and milkshakes are all overdeveloped. Perhaps not surprisingly, salty snacks and candy are both over-developed with cannabis users as well. It’s important to remember our understanding of the cannabis user in foodservice is just beginning to take shape. This is truly a tipping point in Canadian history that will present significant opportunities for savvy retailers and foodservice operators committed to spending the time to truly understand this unique consumer and their demands. Those who do it right will have a significant first-move advantage when future legislation is passed. FH Vince Sgabellone is a foodservice industry analyst with The NPD Group. He can be reached at vince. sgabellone@npd.com FOODSERVICEANDHOSPITALITY.COM OCTOBER 2019 FOODSERVICE AND HOSPITALITY 13
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