Sweet Reason is a CBD beverage startup that recently closed a $2.5MM seed round to fund its early stage growth. According to an article on TechCrunch, Sweet Reason has had to deal with some growth pains navigating the evolving regulatory environment. For starters, they thought that they could launch in cannabis-friendly Canada but that was a nonstarter thanks to changing laws. From there, they changed their launch strategy to focus on America.
Starting sales in New York they have expanded out to other states through online sales and are doing well enough to have raised a round from some heavy hitters. They are doing very well and there are important lessons you can learn from their experience.
CBD Consumer Product Launch Expenses
Hilary McCain, the Chief Executive and founder of Sweet Reason, is a pro in the food industry having been a consultant at Boston Consulting Group. What she and other veterans of that industry know is that it costs a decent amount of money to launch a consumer product. Hilary started Sweet Reason with a couple hundred thousand dollars of her own money and that money went towards “market research, brand development and the creation of her CBD-infused concoctions.”
That’s what it costs for someone who knows what they are doing so, if you’re thinking that you want to start a consumer product CBD company, keep that in mind. It will cost more than you think.
CBD Branding – Sweet Reason
There are many different directions to take it and Sweet Reason looks like their branding is directed towards a younger demographic. If you look at their site, or the screen grab below, Sweet Reason is focusing its brand on natural products. Their sparkling water comes in glass bottles, has clean and clear labeling, and they don’t overdo it. It’s straightforward packaging that communicates value.
The color palette throughout their website and their social media mostly centers around pastels and women who are living happy, healthy lives. Their Instagram feed is a combination of black and white portraits of women enjoying life, inspirational quotes, and every post is artistically done.
Their Instagram bio speaks to how they are positioning their brand not as a CBD-infused sparking water company but as a part of a great life: “CBD-infused sparkling water made to help you slow down, relax, and pursue a life well-lived.”
Price is also a way to communicate your brand and they have priced their products in a way that positions them as a upper scale company. There is definitely psychology in play here because price certainly communicates quality for most people. Maybe purchasing this product can also serve as a status symbol for some people.
Their bottles are made of glass and are on the shorter size. Looking at the Instagram post below, even though the Sweet Reason bottles are not in an optimal location, well below a person’s eye line, their bottles still stand out. The bottles with the large labels are probably cheaper to produce but they are communicating the message that they’re hiding something. The aluminum cans communicate a lower value. Sweet Reason’s packaging, on the other hand, communicate freshness and quality.
CBD Consumer Products Lessons Learned
Launching consumer products is an expensive endeavor. You need to clearly identify what demographic you are going to target and then lean into that. Sweet Reason has seemingly determined that their demographic is younger, upwardly mobile, and mostly women. At least their branding seems to indicate that.
When launching a consumer product you will be faced with many choices. Do you want to go up market or down market? How will you price your products? How many products will you offer? How will you distribute your products? How will you market your products? How will you package your products? And the list goes on.
The best takeaway from this is that you need to clearly answer one straightforward question: Why will people purchase my products?
Sweet Reason started out like most other companies, they wanted to make money and that is a very good reason to start a business; if you’re a devotee of Milton Freedman then that is the primary reason to start a business. But you have to take it a step further and figure out why people are going to care enough about your products to part with their hard earned money to purchase your product.
For Sweet Reason, they determined that customers will purchase their products because Sweet Reason’s products accentuate their customers’ lifestyles. There are already other CBD water options in the marketplace and there will be only more options as time goes on. Sweet Reason has identified a niche and they are leaning into it. You should do the same.