October 2019 Digital Issue

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