By Javier Hasse
A few days ago, publicly-traded, multi-billion-dollar company Nielsen, best known for producing TV ratings and many other sets of consumer insights, announced it was entering the cannabis industry through a partnership with Headset, a cannabis industry-focused data and analytics services provider often called “the Nielsen of cannabis.”
It may not seem like it, but the announcement was a big deal. Nielsen is now one of the largest companies in the world with a real, active stake in the cannabis industry, which is expected to hit worldwide sales of almost $17 billion this year.
Unlike other big corporations with relatively passive investments in cannabis companies – like Marlboro maker Altria does in Cronos, Nielsen is entering the marijuana space in a very active manner, co-developing a full suite of capabilities aimed at cannabis consumer packaged goods (GPG) companies, both in Canada and the U.S.
“While cannabis legalization is still relatively new in Canada, there is no doubt it will have a direct impact on categories across the store,” Mike Ljubicic, managing director of Nielsen Canada told me. “For Canadian retailers and manufacturers looking to navigate the FMCG market, understanding the evolving legal cannabis market is vital to creating a cohesive strategy. Forming this strategic alliance with Headset will provide our clients with actionable data and insights to navigate this evolving market.”
A ‘Big 4’ Gets In The Game
This week, Nielsen’s entry into marijuana became an even bigger deal, as the company and its partner, Headset, announced they had added Deloitte, one of the biggest accounting and professional services companies in the world – with more than $40 billion in revenue last year, to their strategic alliance. Together they will focus on generating key market insights for cannabis companies to better understand the Canadian market and its consumers.
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Jennifer Lee is a Deloitte Canada partner. She leads the company’s consumer advisory and analytics practices. In addition, Lee is in charge of Deloitte’s cannabis sector, for both the Canadian and global markets.
When prompted about the new partnership with Headset and Nielsen, she explained it was all about data. She explained the lack of data in the cannabis industry represents one of the largest challenges Deloitte’s clients face on a global scale: “For this industry to develop and flourish, companies in all areas of the ecosystem (from government to banks to retailers, and [from] consumer packaged goods to legal producers) will require comprehensive data about the market. This data will ultimately help pot companies better understand the consumer’s entire path to purchase, as well as consumer demand at a micro market level, Lee told me.
With this strategic alliance, Deloitte, Headset, and Nielsen will seek to offer a “comprehensive solution to integrate valuable consumer and market related data sets, translate insight into action, and drive critical business decisions,” she added.
Cy Scott, co-founder and CEO of Headset, is another firm believer in the power and importance of data for business and decision-making. “Ultimately, this partnership is about making our clients’ lives easier,” he said. “The combination of the tools, resources, and data from Headset, Deloitte, and Nielsen will give us the opportunity to provide unprecedented acumen into the new legal cannabis market.”
All About CPGs
Finally, I reached back out to Nielsen. The senior vice president of Nielsen’s U.S. beverage alcohol practice, Danny Brager, seemed very enthusiastic about the potential of cannabis in general – but especially about consumer packaged goods within the industry. After all, the Headset-Deloitte-Nielsen partnership is all about CPGs.
“There is no doubt that the legal cannabis market is attracting the attention of CPG companies and consumers, alike - from the beverage alcohol space and beyond,” he said, alluding to players like Constellation Brands, which has a multi-billion dollar investment in Canadian cannabis company Canopy Growth. “For the CPG industry in the U.S, we are enabling data-driven decision making by bringing visibility into a fast-growing market. Through our ever-growing suite of solutions and alliance with Headset, we are empowering companies to understand how today’s consumers are interacting with legal Cannabis products and what that means for their business today and in the future.”
By means of conclusion, Deloitte’s Jennifer Lee voiced: “The cannabis industry is rapidly evolving, and this alliance will pave the way for its professionalization through data transparency; thereby helping our cannabis and cannabis-related clients succeed in Canada.”