Quick feet: How one brand uses consumer data to change directions

Overview

New cannabis products emerge daily, but only a handful of those products will stand the test of time; of the US products that first launched two years ago, 14% continue to sell today*. California beverage brand, Uncle Arnie’s, shares how they’re using Headset Insights to stay ahead of this trend by creating products that place their customer at the forefront of product innovation.

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Market turbulence makes for a tricky take-off

In the wake of market volatility, the cannabis industry has responded in ways that many of us could have never predicted. From 2020’s COVID-induced recession to this year’s inflation crisis, the cannabis industry has countered traditional CPG trends and carved out a lane of its own (i.e. inflation resistance, COVID sales boom). In retrospect, these trends make sense and may elicit an obvious “duh” moment, but the reality is that many of us are reactive to these unexpected twists and turns, lacking the foresight to create smart offensive and defensive strategies. Real-time consumer insights are critical to staying nimble and adaptable in a fast-evolving market — whether you’re launching a new product, innovating, investing, your success is largely a reflection of how well you listen to your consumer and how you well translate that feedback into your response (as a former middle school teacher, I called this “active listening” in my classroom).

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Trust your ground-crew

Since 2020, California-based company, Fly Beverage, has put their customer at the center of product strategy and innovation. Co-Founder and VP of Sales Ave Miller first launched the beverage brand Uncle Arnie’s after soliciting feedback from hundreds of buyers and retailers in the state. “What the buyer says, we consider and take to heart,” says Ave. The verdict? — consumers craved an affordable, high-dose alternative to the $20-$25 beverages that saturated the market. And Uncle Arnie’s delivered, creating an 8oz 100mL spin on the classic “Arnold Palmer” at only $.10/mg THC (source: Headset, “last 30 days,” 6/30/2022). Two years later, Uncle Arnie’s “Iced Tea Lemonade'' continues its reign as California’s top-selling beverage, capturing nearly 3.5% of all beverage sales in a crowded field of 700+ distinct beverage products (source: Headset, “last 365 days”, 6/30/2022). Reflecting on the product’s success, Ave speaks to Uncle Arnie’s penchant for consumer-driven innovation: “The $10, 100mg beverage was never a thing…but it was clearly the right decision, because it was what the consumer was telling us.”

Regularly check your radar

When gathering consumer insights, the team at Uncle Arnie’s leans on multiple data sources. To supplement anecdotal feedback, they also keep a close eye on macro and micro-level industry trends through Headset’s market intelligence solution, Insights. “We always try to evaluate [the market] from both ends, macro and micro,” says Ave. Micro-level trends cover attributes like flavor, package size and demographic data, which Ave accesses through dashboards like “Who is buying?” and “Pricing Details”; macro-level trends are bigger-picture, directional trends accessed through dashboards like “Category Details” and “Market Overview.” More recently, Ave has shifted his focus to the latter: “with the nervousness of the recession, we’ve been trying to watch if sales trends are going up or down…everyday, we’re on Headset’s new product finder trying to look at where our consumer sales are ending in real-time.” Without a clear window into sell-through data, Ave mentions that “we’d be shooting blind,” and reliant on sell-in data, which doesn’t always paint a complete picture.

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“with the nervousness of the recession, we’ve been trying to watch if sales trends are going up or down…everyday, we’re on Headset’s new product finder…”

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Explore new places

Earlier this year, Uncle Arnie’s ventured outside of the beverage sector and launched two gummy products. Consumers, however, didn’t respond the same way they had to previous beverage launches, which comparatively outpaced their gummy sales nearly tenfold after four weeks in-market. Ave and his team saw these trends immediately in Headset’s “New Products” dashboard, which they viewed as a testament to their foremost identity as a beverage brand: “when consumers are looking for our product, they’re looking for beverages.” With open ears and a data-centric business approach, the team listened to their consumers and recalibrated: “Based on the new SKU data that we see through you guys, we took that pivot quickly, and we completely discontinued the gummy line.” But their response didn’t end there.

Course-correct if needed

The Uncle Arnie’s Team went back to the drawing board and used Headset to look for additional growth opportunities. Sticking to their roots, they pursued a relatively uncharted segment within the beverage category, defined by Headset as “syrups, shots, and elixirs,” after recognizing its immense potential for growth and market-share expansion. “We saw how big of a segment it was and the missed opportunity,” says Ave. The team also perceived the segment as a way to reach beyond their majority male consumer base; that’s important, because females are responsible for much of the recent growth we’re seeing in beverage sales, according to Headset’s recent demographic analysis. Just last month, their “mini Arnie’s” hit the shelves. At 100mg per 2oz shot, the two new travel-sized products, “Blueberry Night Cap” & “Strawberry Kiwi,” stay true to Uncle Arnie’s brand ethos: “providing high quality, effective and affordable products.”

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Failure to launch

As cannabis brands continue to fight for market share and cultivate loyalty among a dynamic consumer base, product development will have to be an iterative process. In a recent survivorship analysis, which looks at the longevity of products after their initial launch, Headset found that 14% of all products launched since January 2020 in the US recorded a sale in the last 7 days (source: Headset, 6/29/2022). This of course varies heavily by category, as strain-focused categories (e.g., flower, pre-roll, concentrates, and vapor pens) tend to have significantly shorter product lifespans due to the cyclical nature of harvests and strain variability. When limiting the analysis to non-inhalable categories (e.g., edible, beverage, topical, capsules, tincture and sublingual), Headset found that 43% of products launched since the beginning of 2020 recorded a sale in the last 7 days, meaning that over half of these products have likely flatlined. Whether “failure” is largely intentional, as evidenced by the Team at Uncle Arnie’s decision to discontinue their line of gummies, or the natural response of market dynamics, brands must be elastic in their response if they hope to maintain relevance among their consumers.

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“14% of all products launched since January 2020 in the US recorded a sale in the last 7 days”

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Weathering the storm

In this increasingly competitive market, active listening will be a prerequisite for brand survival, no less for their success. For beverage brands, Ave thinks this summer will be a turning point: “it’s the brand summer…consumers are convinced, beverages are priced appropriately and buying decisions have become more sophisticated.” As the beverage category continues its forward momentum while mainstay categories like flower and concentrates experience year-over-year declines, the current market appears ripe for opportunity. But no matter the market’s potential, product development in a vacuum is the shortest path to failure, especially during these times of economic strain and uncertainty. If you hope to avoid the same fate as the 57% of products that flatlined over the last two years, take a page out of Uncle Arnie’s handbook: keep your ears open, approach product development with a nimble business plan, and stay informed with Headset’s real-time insights. To see how Headset Insights fits into your specific launch plan, reach out to our team today or fill out the form below.

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*14% of all products launched since January 2020 in the US recorded a sale in the last 7 days (source: Headset, 6/29/2022).

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