Race to Market: Hemp Beverages Target Bigger Audience with Strategic Positioning
By: Kristina Etter
Tags: Investment, Emerging Markets, Hemp, Cannabis, Investing

As prohibition drifts into the past, hemp farmers and producers stand ready for the unprecedented growth forecasted for hemp products in the United States and globally. Unfortunately, several factors continue to impede industry acceleration, including continued FDA ambiguity, lack of consumer education, and limited retail shelf space.

Factor in a deadly disease, an economic downturn, and political chaos, the past year presented challenges for most industries, including hemp. Last year, without question, wasn’t a banner year for shopping, but as we turn the page on a global pandemic, businesses are anxiously anticipating the return of retail traffic.

But, if 2020 was a year to drawback, 2021 is the year to launch forward, at least according to Good Hemp (GHMP), a publicly-traded hemp beverage manufacturer based out of North Carolina. In an interview with CEO and Founder Bill Alessi, we discussed the strategic moves he believes will help slingshot the company into the emerging hemp beverage industry’s pole position.

Gaining Brand Visibility

For the newly emerging hemp market, gaining visibility in mainstream retail outlets has been difficult. Matthew Carr, Chief Trends Strategist at the Oxford Club, mentioned in an email, “I think the biggest issue for hemp beverage companies like New Age Beverage, Charlotte’s Web, and others is a lack of in-store retail traffic.”

Bill Alessi, CEO of Good Hemp, couldn’t agree more and is making a few strategic moves to launch their company forward. Reflecting on the last year, Alessi stated, “We’ve actually managed to expand our footprint, and that’s fairly significant in a COVID landscape.” He continued, “Although sales haven’t exploded during the pandemic, we’ve been focused on getting our ground-game together so we’ll be ready when retail begins to pick up again.”

Image provided by Good Hemp

However, using their downtime during the pandemic to bolster their online presence, Good Hemp focused on developing their Amazon store and making changes to their website to improve their direct-to-consumer shopping experiences. “We are positioned in the top results for all the major key terms in our category of hemp beverages,” Alessi said. “Which means, we should be able to satisfy Amazon’s litany of algorithm challenges to gain notability as a reputable and consistent supplier of hemp beverages with good sell-through.”

Furthering their strategy to gain retail exposure includes partnerships and acquisitions that will increase their physical shelf space, resolve production bottlenecks, and increase their advertising budget. And, acquiring one of the most loyal fan bases in the wide world of sports doesn’t hurt either.

NASCAR Revs Up Brand Loyalty

NASCAR is widely known for its loyal fanbase. A survey by Performance Research out of Rhode Island stated, “…where over 1,000 nationwide, random NASCAR fans were interviewed, over one-half (57%) indicated that they had a higher trust in products offered by NASCAR sponsors. In comparison, only 16% of the general public holds a “Higher” trust in Olympic sponsors, and only 5% have a “Higher” trust in sponsors of World Cup Soccer.”

As a businessman, serial entrepreneur, and innovator, Alessi understands that people immediately think of big, household brand names such as Tide, Coca-Cola, FedEx, and others when someone says NASCAR. Wanting to gain visibility in front of this dedicated audience, the company combined forces with Spire Motorsports, a giant in sports and entertainment.

“We did our deal with Spire for two reasons,” Alessi explained. “First for the increased advertising budget they provided as part of the agreement, but moreover, when you think of NASCAR, you think of race fans… die-hard, loyal race fans who are extraordinarily supportive of sponsors.”

As a fringe benefit from working with Spire, Good Hemp also acquired Rise’ Meguiar, former President of Sales at Innovation Ventures, better known for 5-hour ENERGY drinks. As one of the company’s founding members, Meguiar has nearly two decades of experience. Alessi believes, “Her expertise is a big reason why 5-hour went from a start-up to a multibillion-dollar enterprise.”

A Gem of an Opportunity with Diamond Creek

Through the partnership with Spire, another tactical move quickly came to light. Boasting $1.7 million in sales, Diamond Creek is one of the top 20 alkaline water brands in the world, as well as a sponsor for NASCAR Cup Series driver Corey LaJoie.

Image provided by Diamond Creek

Immediately recognizing the opportunity, Good Hemp made a play to acquire the company in 2020. With shelf space in nearly 2,000 retail locations, Diamond Creek immediately expands Good Hemp’s retail visibility, but more notably, it brings the opportunity to tap into the goldmine of NASCAR.

In a recent press release regarding the acquisition, Rise’ Meguiar stated, “This is a great strategic acquisition for Good Hemp, and I am extremely excited about the future expansion of our beverages in the retail marketplace. Not only do we plan to leverage our past relationships and sports marketing assets to expand the Diamond Creek brand, but these new relationships will also be critical for the expansion of our hemp-infused beverages as hemp becomes more widely accepted by major retail chains.”

Ken Morgan, CEO of Diamond Creek, expressed excitement about the partnership stating, “Good Hemp has a strong and knowledgeable team in place that gained the company some pretty strategic distribution partners. We believe Diamond Creek will be able to strengthen Good Hemp’s position in the marketplace with our manufacturing, supply chain, and retail partnerships.”

Alessi looks forward to taking advantage of Diamond Creek’s established retail network. Yet, he admits, “Our retail strategy differs from Diamond Creek,” as Good Hemp plans to have internal distribution centers.

Speaking with Chris Chumas, Director at Good Hemp, about their distribution plans, he explained, “Today Good Hemp uses distributors to distribute to our retail locations and after we do production we hold the products at a distribution warehouse. Diamond Creek produces and ships directly to the retailers’ distribution centers (no distributors). By combining the two and leveraging those relationships we can expand both lines.”

Image provided by Diamond Creek

Race to the Top

As the hemp industry expands, many products will come and go with market fluctuations. However, companies like Good Hemp that are focused on building a recognizable, trustworthy brand and offering a high-quality, reputable product could surpass the test of time.