With the official launch of recreational sales in Canada and in several U.S. states—and now Mexico is poised to pass national recreational cannabis legislation—the excitement around the legalization of cannabis is sweeping across North America.
Our firm, Shikatani Lacroix Design, is fortunate to be at the forefront of this movement, having worked with Organigram, one of the leading providers of medical cannabis in Canada, and most recently with the launch of mihi Cannabis, a new retailer of cannabis products. Helping to brand something that has traditionally been legally available by prescription only has provided some opportunities to explore a consumer-facing branding program.
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Shifting the product from only medical use toward a new, more-accepted form of recreational social lubricant that is on par with the well-established spirits and wine categories, will have a significant impact on how people socialize. More importantly, with so many new brands being launched, it puts a greater burden on new company entries to properly position themselves to survive in what will be an industry consolidation.
The opportunity for branding a new recreational consumable product within what is already a crowded space requires any new category to reflect on what we have defined as “learned consumer behavior.” In the case of cannabis, this means taking a cue from the spirits and wine industry.
The legalization of cannabis has led to the creation of more than 25,000 cannabis businesses in North America, marketing and selling cannabis products. With such a wide range of companies, ensuring the brand is clearly differentiated and provides a unique value proposition is paramount. It’s important to understand how the creation of a new consumer packaged goods and retail category ushers in a high level of product confusion. It can also give consumers anxiety when considering the varying types of cannabis products and the different formats available for consumption.
To succeed, established cannabis companies and new brands entering the market need to have a clearly defined position and a brand identity that is consistently delivered at each moment-of-truth. To assist in ensuring relevancy and strong differentiation, we have outlined key factors, whether it’s an established brand or a startup looking to make its mark in the fast-growing cannabis industry.
Aligning Needs and Priorities
Before developing a compelling position, it will be critical for companies to understand the needs and priorities of their primary target group. In my book, “Desire by Design,” we delve into the ideal omni-experience factors that reflect a strong alignment between the customer’s and company’s needs and priorities. Without the identification and alignment of these needs, the ability of properly positioning the organization for growth will be lost. If you are a manufacturer of legal cannabis edibles and beverages, it may be a type of retailer you are targeting that also attracts a given type of customer. Since the legalization of cannabis, the category now attracts existing users as well as consumers who may have been open to the category but were previously discouraged due to its prior status.
To succeed, companies will need to identify the core target group’s needs and priorities that reflect the type of lifestyle needs they have, along with the supporting product category and consumption formats. These needs should be effectively translated into consumer personas, fictitious descriptions of a certain type of customer based on needs, priorities, behaviors and product choices. For example, novice customers will have different needs from regular or occasional consumers who have already had experience with limited types of cannabis products. However, it’s pivotal for the retailer or manufacturer to align priorities and needs with those of the customer. It’s great to consider focusing on the regular consumer as a target group, but if you do not have the right range of desirable cannabis edibles and beverages, the desire to appeal to them will be lost.
Own a Clearly Defined Position
Only when the needs and priorities of both the organization and its core target group have been formalized can the next phase of the process be initiated. Although the category will be new and emerging, products competing in the category will need to develop a unique emotional connection with customers as more competitors emerge.
Building off of cannabis varieties and their various effects is one way to achieve this. For example, Cannabis sativa strains used in an edible or beverage might be targeted as more uplifting and ideal during the day, and Cannabis indica strains might go into calming and relaxing products. As brands crossbreed and develop strains with their own unique qualities, it will be important that branding and packaging effectively communicate appropriate moods and desires with consumers.
A new brand will need to define its value proposition, namely why someone would pay more for the given product or rationalize to their friends the price gap. The value proposition is the foundation of the position on which the brand defines its vision (long-term goal), mission (how it will achieve its goal) and brand essence (distillation of the vision, mission and value proposition). The value proposition is supported by brand proof-points or equities, which are the factual and differentiated factors giving the brand permission to deliver value.
Define Your Brand Personality
An important element is arriving at a well-defined brand personality. The Australian wine industry was very successful in entering the North American market through the use of irreverent names such as Yellow Tail, disrupting the well-established wine category. Consideration of how the product makes the customer feel, and linking to a desirable experience, will be key in driving a strong emotional connection.
To develop the right personality, a great approach is to project the brand as a person, car, house, actor or movie. It’s critical to spend time reviewing the brand personality, since these keywords will guide the brand identity and all facets of external and internal communication.
Have a Strong Brand Identity
Individual jurisdictions will permit sales in a variety of settings, from controlled operations such as government-run liquor boards to allowing private stores to sell products such as tobacco over the counter. Regardless of the setting, brand recognition will be critical in building awareness as the product is consumed in the marketplace. Similar to the marketing of liquor and beer brands, the ability to effectively market cannabis edibles and beverages will be heavily legislated, allowing for limited use of conventional marketing vehicles such as TV, radio or print. In Canada, brands are limited to the use of only their logo on packaging, putting the importance of a strong brand identity at the forefront of any marketing investment.
A brand’s identity and name must drive visibility and engagement, since the true branding benefit will be when the product is used in social settings. It is important the brand identity is strongly differentiated from competitors through the use of a unique name, shape and color. We recommend a visual audit be conducted across the competitive set to ensure the final visual identity is unique and cannot be confused as a competing brand. A strong hierarchy of communication indicating product attributes and usage, in addition to visuals reinforcing a distinctive message, will also help ensure the brand is differentiated from competitors.
A Unique Belonging Experience
Today, consumers are buying experiences versus products, and how the brand makes them feel is more critical than the functional benefits being promoted on the packaging. This becomes critical in categories where product awareness or corresponding understanding are nonexistent. As such, having a clear understanding of the target persona and how these consumers converge as a community of like-minded individuals with shared values will be critical. As cannabis edibles and beverages are social lubricants, sometimes shared among friends, how the brand reflects their lifestyle values and beliefs will go a long way in creating loyalty and differentiation.
The category will evolve by brands owning key consumer segments and potential rituals that form part of a habitual experience. This is best exemplified by beer brands such as Miller with “Miller Time.” Creating a belonging experience supports the need for consumers to feel part of a tribe representing a group of individuals who share common values and lifestyle behaviors. One of the tribal physical manifestations is what we define as “badge value,” typically represented by a certain range of brands they purchase, or a retail chain were they primarily purchase their products. For the coffee connoisseur Starbucks tribe, it’s the coffee cup that serves as the badge reflecting their values.
A Coherent Brand Strategy
The legal cannabis edibles and beverages industry is in its infancy, being built by many startups with limited marketing budgets. Brands that will stand out and grow will depend heavily on the effectiveness of their branding and marketing initiatives. Ensuring every moment-of-truth and brand touchpoint reflects a focused, singular message will be key in building awareness, preference and intent for any brand that is new to the marketplace. Creating a coherent strategy linked to an emotional position and strong brand identity will provide the critical momentum needed in standing out in what will soon become a very fragmented and competitive market.
Since most of the growth will come from non-users who are newly open to consuming cannabis edibles and beverages, it will be important to communicate a strong, consistent message on why your brand is different and warrants their loyalty. To drive sales, the brand will need to generate awareness and preference before a consumer would consider making a purchase. A key strategy in driving preference is trust, which can only be delivered through a consistent message at all of the brand’s moments-of-truth. Getting to tell your brand story will also be challenged by government marketing regulations, in addition to a lack of marketing funding typically reflected in a startup organization. Web, mobile and retail will represent the most-effective marketing vehicles and, as such, the brand will need to establish a strong presence among a great variety of competitors.
Though legalized cannabis edibles and beverages comprise an emerging segment, to succeed they must conform to the laws of branding—namely, owning a strong emotional connection through a defined brand position that is consistently delivered over a long period of time. We have coined this “The Blink Factor,” ensuring brands connect emotionally in the blink of an eye, a subject we will explore in the next issue.