For 3-year-old direct-to-consumer beverage brand Dirty Lemon, launching its new cannabis-infused +CBD drink via Instagram Stories and pre-order proved to be smart business.
In late June, Dirty Lemon first floated a new beverage drop on Instagram Stories and asked its community to guess the company’s latest ingredient in exchange for a free case of drinks. The +CBD beverage the brand was referencing, which was created with luxury cannabis brand Beboe, was already in the middle of Dirty Lemon’s 30-day innovation and production cycle, but the company wanted to sample customer reaction and, of course, create buzz.
Over 1,500 people direct-messaged the brand after seeing the Instagram Story — Dirty Lemon currently has 101,000 followers on the platform – and the overwhelming majority correctly guessed CBD, according to CEO and co-founder Zak Normandin.
“We were really interested in collecting data on what consumers thought was interesting in something that we could be formulating into a beverage,” he said. “That people wanted CBD was validation for us and made the people who wanted it even more excited to buy it when we officially launched.”
A few days later, Dirty Lemon announced the pre-order opportunity to customers and further fueled fervor around the +CBD product. The pre-order was a first for the company, versus its existing day-of announcement marketing approach. “We were trying to get the message out to the customer in more of a thoughtful way,” said Normandin.
Dirty Lemon sells all of its products exclusively via text messaging, and all SMS communications are inbound to the company. They don’t do any outbound outreach via text; the teasing of the new beverage through Instagram Stories and pre-order gauged interest before fulfilling orders and was an “interesting marketing exercise,” said Normandin.
To date, the +CBD launch in July has been the company’s strongest. Dirty Lemon sold out of its first production run, which is roughly 20,000 bottles, in two days, and a waitlist existed until last week. All Dirty Lemon beverages are sold in six-bottle cases and shipped to customers’ homes for $65.
The demand is still so great that the company — which typically delivers product on the same day or the next day in major markets, like New York City and Los Angeles — is now telling customers to expect a two- or three-day turnaround. Dirty Lemon has had to up the production of the +CBD beverage to multiple times a week.
Sixty percent of Dirty Lemon customers repeat purchases of the brand’s beverages within 90 days, according to Normandin, but he is expecting that number to rise based on the new +CBD data. Overall, the beverage market is a high-volume business – for 2017, Euromonitor International reported that the off-trade value of soft drinks, which includes juices, concentrates and functional drinks, was valued at nearly $112 billion, up by 11.5 percent from 2012.
Add in the growing interest in CBD-related beauty and wellness products — Hemp Business Journal reported that hemp-derived CBD accounted for $190 million in retail sales last year — and it’s clear that Dirty Lemon has a fruitful opportunity on its hands. In the past three years, Dirty Lemon has also been an early adopter of buzzy ingredients like collagen and charcoal (labeled “+collagen” and “+charcoal” online and on bottles) in its drinks, and it will continue to innovate on product going forward.
But given Dirty Lemon’s limitless virtual shelf space, Normandin plans on pulling on this “phased-in” marketing and pre-order model to drive sales and customer awareness around future products.
“Offering a product and trying to gauge demand before it’s actually released and shipped is a great way to manage inventory,” he said. “It’s an operational control we want to continue to use, so that we are able to deliver on the expectations customers have for the company.”