Indeed, as anyone walking the floor at the Natural Products Expo West trade show this year will have clocked, hemp is steadily creeping into scores of products, from beverages, yogurts, and protein powders, to bars, cereals and granola, Hemp Health (Evo Hemp bars) co-founder Jourdan Samel told FoodNavigator-USA.
“People see hemp as a superfood like chia [hemp contains the omega-3s ALA and SDA, plus lots of phosphorus, iron, potassium, manganese, zinc, vitamin B1 & B2].
“But I think a lot of the interest is now in hemp as a protein source [de-hulled hemp seeds contain 33% protein], which is what we highlight in our product along with the fact our bars are raw and organic.”
And while the snack/nutrition bar market is notoriously crowded, having a brand based around hemp definitely helped attract the attention of buyers at Wegmans, Albertsons, The Fresh Market, Whole Foods, Natural Grocers by Vitamin Cottage and other retailers, when Samel and former college room-mate (Hemp Health co-founder) Ari Sherman started pitching their wares in late 2012, he said.
“We’ve actually been brought into a lot of large grocery stores just because of the fact that there is hemp in the product, so it’s definitely worked to our advantage. The price [$2.20-$2.69/bar depending on the retailer] is at the higher end of the market, but in line with other raw, organic bars.”
Getting on the shelf is just the beginning
Today, Evo Hemp bars are in 600-700 stores, and are about to roll out to 170 Sprouts stores. But quality is more important that quantity, said Samel, who says he remains laser-focused on generating strong sales velocities in existing accounts as well as expanding distribution.
“Some retailers judge you on the first month’s sales, while others may give you six months to prove yourself, so getting on the shelf is just the beginning - you've got to stay there. We’ve managed to build a core following, and we’re seeing pretty good velocity, especially compared to a lot of our competitors.
“But we’ve also put the work in and done tons of instore demos – even in Whole Foods stores we’ve been in for three years we’ll demo our products two to three times a month.”
And even with close control over costs, it’s an expensive business, admits Samel, who along with Sherman, has a background in real estate, not food, and admits they have been on a huge learning curve over the past three years.
“I don’t think there is a single entrepreneur out there who didn’t underestimate how much it was going to cost. A lot of retailers expect you to give them the first shipment free if you are a new supplier, and that can really add up.”
Trade shows are also expensive, but can put you in front of the right people, he said. “We picked up a lot of accounts from exhibiting at Expo West.”
‘We’ll probably do a little over $2m in sales this year vs just over $700,000 last year’
While the initial growth has been in the natural channel, many conventional retailers are now looking at hemp-based products, said Samel: “Kroger and Costco both sell hemp products, and the fact that it’s now appearing in so many products [Bob's Red Mill hemp seed hearts, Manitoba Harvest and Nutiva hemp protein, Daily Greens and Temple Turmeric beverages, Nature's Path cereals...] is really helping to raise awareness.
“We’re growing at about 300% year over year right now, we’ll probably do a little over $2m in sales this year whereas last year we did a little over $700,000.”
Industrial hemp is not the same as marijuana, and it won’t get you high
For those unsure about its legal status, industrial hemp – a safe and legal food ingredient permitted in the US market - is not the same as marijuana, and it won’t get you high, stresses Samel.
The confusion arises because hemp comes from Cannabis sativa, the same plant species as marijuana, but contains little to no THC, the psychoactive ingredient in marijuana that delivers the ‘high’.
However, while it is perfectly legal to sell and consume foods and beverages containing hemp seeds in the US (which is the world's largest consumer of hemp products), the US is the only major industrialized country that outlaws domestic hemp production (except for research purposes/ag pilots in select states permitted by the 2014 Farm Bill), said Samel, who sources most of his hemp from Canada.
As demand currently outstrips supply, prices have risen steadily in the past three years, he said, although he anticipates pricing will stabilize as more acreage is planted.
Longer term, he is confident that federal rules about growing industrial hemp will change (there are periodic attempts by lawmakers to amend the Controlled Substances Act such that American farmers in any state could grow industrial hemp). Meanwhile, last year’s Farm Bill permits limited industrial hemp production for research purposes by colleges and universities if permitted by state law, he said.