Editor's Spotlight: Startup Focus

CBD entrepreneur to coax curious consumers with entry-level innovations

By Nikki Hancocks contact

- Last updated on GMT

Alphagreen gummies and oils
Alphagreen gummies and oils

Related tags: Cbd

The CEO and founder of a CBD e-commerce startup company is set to launch his own brand of entry-level oils and gummies as he aims to pull curious consumers into the market.

Alexej Pikovsky, a former investment banker and private equity investor turned CEO and co-founder of Alphagreen, launched in October 2019, has quickly expanded the UK-based business from a small site carrying two brands into a global platform of more than 150 brands, as well as running two subsidiaries –a business growth consultancy and a medical cannabis import and distribution firm.

As if all that wasn't enough, the company will launch its own range of oils​ and gummies at the end of this month with packs of 10 gummies (25mg CBD per gummy) retailing for £20 and oils (10 ml with 1,000mg of CBD Isolate) retailing at £30 - nearly half the price of the average akin products on the market.

But Pikovsky is not looking to knock other products off the market with his high value propositions, rather he is looking to provide an entry point for new customers who currently consider the price too high.

What’s more, he plans to offer an Alphagreen sample kit​ (with the gummies and the 10% CBD Oil product) for just £40.

“We won’t make money on the sample kits which may sound a strange business choice and you may ask ‘why would a business do it?’. The answer is, because looking at our retention rate, we are confident to make a gain over a longer period of time.

“The truth is, there is often a high mark up on these products and that’s because the demand is there! It’s similar to the collagen market in that consumers are willing to pay for products with this ingredient if they feel it works. That’s the reason people go to brands they know and trust.

“Once consumers give our products a try they will delve further and buy into other brands.”

All about data

One great benefit Pikovsky enjoys is the fantastic insight into consumer purchasing habits thanks to Alphagreen’s data which reveals customer preferences, purchase journeys and more. The company has also conducted a number of external and internal surveys via email to gain further insights into active and potential consumers.

All of this knowledge is monetised through the company’s business growth consultancy subsidiary nuoptima​ which offers a huge range of services including SEO, Influencer and Email Marketing, market data intelligence, as well as a community of CBD entrepreneurs.

Giving some insight into the advice the consultancy can offer, Pikovsky says that where many brands go wrong is they don’t think about how the format, dosage and the inclusion of other ingredients should be tailored according to the claimed health benefit. For example, Alphagreen conducted a survey of 5,000 consumers [AP4]​ recently which discovered that 35% of respondents took CBD for pain, 28% took it for anxiety, and 24% took it for sleep.

“We know that those are the popular health claims. We also know that high dosage CBD will help with pain – by which I mean at least 50mg daily – so it’s important that if you’re making any claim around pain then you will need to offer the appropriate dosage..”

On the other hand, when looking to develop a product for anxiety, Pikovsky suggests the pleasure involved in the consumption becomes much more relevant to the perception of efficacy, making the taste and the enjoyable format more important.

And if a product is being developed for sleep then Pikovsky suggests integrating other well-studied and trusted botanicals which can provide additional support, such as ashwagandha, lavender, chamomile, or ginseng.

From gummies to tampons

“We sell everything from oils to bath bombs to gummies to tampons and our top selling brands work in oils, beers, capsules, vapes – the full range. Our data tells us that the customer journey is usually to filter by format, such as gummies, and to choose a products from there, so we know that format is extremely important.

“But we also know that there is a wide range of preferences when it comes to format and that these change with the seasons as well as health benefit need. For example, in the winter months we see an uptick in interest in comforting products such as bath bombs, chocolate and brownies.

“We also know that people like to experiment, much like they do in the sports nutrition.”

It’s for this reason that Pikovsky believes Naturecan​ (founded by the former CEO of MyProtein Andy Duckworth) has become such a popular CBD supplements brand.

“The company works like MyProtein did in that it has such a huge range of products that consumers will never get bored,” ​he says. 

Souped-up SEO

Of course, another big struggle for many CBD brands is the inability to advertise. But this has benefitted Alphagreen as the team ensures the site publishes around 400,000 words per month worth of content which, over time, has bolstered its Google search ranking.

Naturally, as the site makes its way up the ranks, top brands are beginning to reach out to Alphagreen to have their products listed there.

After launching in Germany, Italy, Spain and France, next on Alphagreen’s agenda is to launch an app to help consumers purchase and to help the company collect data. Pikovsky also wants to work with universities to create more studies into the health benefits of the ingredient.

“The industry is lacking data and that’s left it very exposed to criticism, especially from pharma so we are making it a key pillar to our business to change this and help evolve the market.”

Looking to the future, Pikovsky says he can see many more acquisitions taking place as big companies look to enter the market. However he also imagines that investors will become slightly less excited by CBD startup opportunities over time, after the initial excitement wears off and they become more aware of the risks involved.

“It’s quite hard to kill a zombie and at the moment startups can just keep getting funding and keep going but there will be a point where the investments calm down and the zombies will start to die off which will be a positive thing for the market as a whole.”

Related topics: Markets and Trends

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