Socati targets hot beverages market with new CBD product launches

26-Feb-2020 - Last updated on 26-Feb-2020 at 18:28 GMT

Less than a month after launching its private label line offering customers custom ratios of CBD and other minor cannabinoids, Socati is targeting the hot beverage market with a line of CBD-infused coffee additive products.

The new products -- a CBD coffee brightener (an unflavored, unsweetened 'creamer style' product that tones down the bitter taste of coffee, and pairs well with dairy or non-dairy additives) and a CBD coffee sweetener (a Madagascar vanilla brown sugar flavored, rapidly dissolving powder stick pack, sweetened with stevia and monk fruit) -- are water-dispersible powdered formulas packaged as single-serve stick packs.

Socati's water dispersible ingredients are micro-encapsulated allowing for CPG manufacturers to add functional ingredients such as flavoring or antioxidant solutions.

'The addressable market for these products is significant'

Socati CEO Josh Epstein noted that the market opportunity for CBD in the coffee and hot beverage additives category is huge.

In 2019, 63% of US consumers reported drinking coffee within the past day, a 6% increase from 2016, according to figures from The National Coffee Association. IBISWorld data, the US coffee creamer market is approximately $3bn and projected to grow at a 5% CAGR through 2023. The US sweetener market grew at a slightly slower pace registering 1% CAGR between 2019 to 2025.

"With over 80% of millennials using additives in their coffee such as milk, sweeteners or flavorings, the addressable market for these products is significant,” said Epstein.

"Coffee is the most widely consumed beverage in America, which therefore represents an ideal input opportunity for consumers wishing to take advantage of the benefits of hemp ingredients such as CBD, CBG and other minor cannabinoids.

"Through integrating our industry leading ingredients into form factors that already exist within consumers' lives... we help deliver wellness opportunities in the most convenient possible way. As a leader in wellness innovation, we have developed these exciting new products while focussing on clean label and plant based ingredients, like monk fruit and stevia, which positions these new private label opportunities at the forefront of the beverage and nutraceutical industry," Socati chief revenue officer Mark Elfenbein told FoodNavigator-USA.

Premium CBD customizations

And unlike other CBD sweeteners or hot beverage additive products on the market, Socati's new products contain standardized levels of CBD and customizable levels of minor cannibinoids per serving with non-detectable amounts of THC.

Socati's edge in the marketplace is its processing technology that can deliver minor cannibinoids to meet a customer's product specifications, he claimed.

"If you look at the marketplace today, 95% of all the products are probably a full spectrum product or even a CBD isolate with effectively non-detectable minor cannabinoids," Elfenbein previously told FoodNavigator-USA.

"Our focus is on the high-end, custom-side of the marketplace versus providing a very low-end full spectrum product that has negligible or no real detectable minor cannibinoids."

Elfenbein is working with roughly half of the top 20 brands in the CBD market as well as number of smaller, less established brands to produce high-end products with customized cannabinoids levels.

The company is planning for future product launches to its private label line over the coming months.