Ocean Spray’s incubator launches CBD sparkling water

Dive Brief:

  • CarryOn is releasing a line of sparkling CBD water. The new brand was launched out of Ocean Spray’s Lighthouse Innovation Incubator and is currently available in Colorado as its first test market.
  • The brand launched two lines of its sparkling CBD waters called Elevate and Descend. Each can has Vitamins C and E, just 10 calories and no added sugar.
  • The company said Elevate is “geared to keep you calm but sharp” with 10 milligrams of CBD, while Descend is designed to provide “relaxation with no impairment” using L-Theanine and 20 milligrams of CBD isolate.  

Dive Insight:

Ocean Spray is using its incubator to launch a beverage into two increasingly popular spaces: cannabis and sparkling water. The incubator, which launched in October of last year, focuses on trendy innovations. It has already launched a brand of plant-based drinks called Atoka. 

​Despite regulatory complications, CBD is being added to all kinds of startup products, from beer and snacks to coffee and cocktails. According to Nielsen, sales of hemp-derived CBD products in the U.S. could hit $6 billion by 2025. But not everyone is rushing to get into the sector, so a more trusted brand like Ocean Spray could still have an early mover advantage. 

Although big names such as Coca-Cola and Monster Beverage have expressed interest in CBD, many are waiting for U.S. Food and Drug Administration approval. The 2018 Farm Bill allowed hemp and its derivatives to no longer be classified as controlled substances, but under the federal Food, Drug and Cosmetic Act, it is still federally illegal to add CBD to food. 

It’s been more than a year since the FDA’s first public hearing on CBD, where manufacturers asked for clarity on regulation. Since then, the FDA released an update about CBD where the agency said it could not give the ingredient generally recognized as safe status. At the same time, the FDA also has continued to issue warning letters to companies improperly using or advertising CBD as more states have developed their own regulation. 

The CBD beverage category is expected to see continued growth. A study from A.T. Kearney found 30% of Americans are willing to try a cannabis-infused nonalcoholic beverage. In Canada, where cannabis food and beverage legalization recently kicked off, alcohol and beer giants like Constellation Brands, Molson Coors and AB InBev have made investments and formed partnerships to launch CBD beverages. When it comes to the U.S. though, there are already a variety startups in the CBD beverage space. Recess, Queen City Hemp and DRAM Dose are among those that have CBD sparkling waters. 

Ocean Spray’s CarryOn brand is focusing its launch around mental health, which could help it stand out as consumers increasingly seek out functional food and beverages. In its release, the brand cited a study that showed more than 56% of Americans have reported negative effects on their mental wellbeing.

“We understood there was a gap in the market for a trustworthy CBD beverage that tastes good, and also helps calm the mind without unwanted side effects,” Josh Wiesman, co-Developer of CarryOn brand, said in a release. “So, we set out to solve that gap.”

Although the brand has its own name, its association with a bigger company like Ocean Spray could draw in consumers that wouldn’t otherwise be interested in giving CBD a try.

More well known but smaller beverage brands are starting to find their way into the cannabis space, but it is still plagued by legal concerns. Bolthouse Farms was planning to launch a line of CBD beverages this year, but the company delayed it because of the regulatory situation. And Arizona Beverages and cannabis company Dixie Brands entered into a partnership last year for the production, distribution and sale of marijuana-infused products containing THC, but haven’t released an update since. 

The sparkling water category has seen its own rapid growth as it has transformed from a niche category to an extremely popular beverage, with giants such as Pepsi and Coca-Cola launching their own products in the space. With those deep-pocketed participants, it seems launching a CBD sparkling water with mental wellness messaging and the backing of a company like Ocean Spray could give this new brand a boost in a budding market.

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