Market Trends of Industrial Hemp Industry
Increasing Demand from the Food and Beverage Segment
- Industrial hemp is obtained from the strain of Cannabis sativa, which is grown specifically owing to the various uses of hemp-based products.
- Hemp seeds are used in baking or to make beverages like hemp milk. Hemp seeds can also be eaten raw and are high in protein content, owing to which they are used in animal and bird feeds.
- Hemp seeds are pressed to produce hemp oil, which is high in unsaturated fatty acids. The leaves of hemp can be consumed directly as salads or pressed to make juice.
- Hemp seeds are rich in two essential fatty acids, namely linoleic (omega-6) and linolenic (omega-3). They are also a rich source of vitamin E, vitamin B1, vitamin B2, vitamin B6, and vitamin D, owing to which they are used in ready-to-drink beverages, energy drinks, snacks and cereals, soups, sauces, and bakery products.
- Humans cannot produce essential fatty acids. The addition of hemp seeds could be useful to them, as they are a great source of linoleic (omega-6) and linolenic (omega-3). They are low in saturated fats and contain zero trans fat.
- Owing to the number of benefits associated with industrial hemp, its demand is substantial in the food and beverage industry and may increase even further with the industry's growth.
- For instance, according to the US Census Bureau, retail and foodservice sales generated a revenue of USD 703.1 billion in May 2024, registering a growth of 2.3% compared to 2023.
- According to the annual Farm Credit Canada (FCC) Food and Beverage Report, the food and beverage manufacturing sales in Canada in 2022 were about USD 156 billion, representing a 10.6% higher value compared to 2021. Additionally, baked goods were one of the only categories to see volume growth at the grocery store despite elevated retail prices.
- According to the National Bureau of Statistics (NBS), China, in 2023, the country's foodservice sector experienced a strong rebound, reaching a total income of nearly CNY 5.29 trillion (USD 743 billion), marking the first time it had achieved this milestone. The China Hospitality Association determined that operating income increased by CNY 2 trillion (USD 0.28 trillion) across various sectors, including agriculture, sideline products, and food processing.
- Owing to all the above-mentioned factors, the demand for industrial hemp from the food and beverage segment is expected to grow rapidly over the forecast period.
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North America to Dominate the Market
- North America is expected to grow at the fastest rate over the forecast period. In countries like the United States and Canada, due to the growing geriatric population and increased consumer awareness, the demand for industrial hemp has been increasing.
- The growing concerns about skin diseases and an increasing number of chronic diseases are expected to boost the demand for industrial hemp.
- However, the 2023 Farm Bill in the United States is expected to serve as an opportunity to ensure hemp is cultivated and produced to its fullest potential, benefiting farmers and stabilizing the market. This can lead to higher growth in the industrial hemp market in the United States and North America overall.
- In the 2023 National Hemp Report, the USDA valued total hemp production in 2022 at USD 238 million, representing a 71% decline compared to USD 824 million in 2021. Furthermore, farmers in Kansas, Missouri, South Dakota, and Wisconsin increased their hemp plantings by 35% or more in 2022 and contributed a combined total of 6,500 acres to the United States's production.
- According to the Hemp Acreage and Production Survey 2022, the United States yield totals for industrial hemp grown outdoors in 2022 was topped by fiber hemp, for which 20.5 million pounds were utilized.
- The pharmaceutical industry in the United States is the largest in the world, accounting for more than 40% of worldwide pharmaceutical revenues. Despite a recent downturn, it is likely to rise in the following years. The expanding and aging population in the United States is fueling this expansion. Moreover, 15% of the people in the United States are over 65 years old, and this percentage is predicted to expand in the future. Overall, the growing demand for industrial hemp in the pharmaceutical industry is likely to drive the market demand.
- In addition, the textile industry in Mexico has benefitted from the NAFTA agreement, which allows free trade between the United States, Canada, and Mexico. In the wake of the United States-Mexico-Canada Agreement (USMCA), also referred to as NAFTA 2.0, Mexico is optimally positioned to carve even further into China's manufacturing share of the market, particularly within the textile industry.
- The aforementioned factors, coupled with government support, are expected to contribute to the increasing demand for industrial hemp during the forecast period.
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