The Importance of Automation in the CBD Industry
The cannabis industry is one of the fastest growing markets today, with sales projected to grow an average of 24% per year from 2019 to 2024. There is great potential for companies in the CBD industry, but the field is also a crowded one, and producers will need to adapt and respond quickly in order to stay competitive. One of the most important factors in the success of a CBD company is their ability to automate efficiently.
Low Barrier to Entry
As industrial technologies rapidly advance, small businesses can find that taking their first steps toward automation is more affordable and easier to integrate than ever. This allows smaller companies to meet or exceed the efficiency standards set by their competition, freeing up most resources to focus on marketing and establishing a distinct brand.
As Alicia Cannon, Vice President of Apex Filling Systems, states, “Manufacturing is no longer just about making physical products…It’s going to become more and more difficult to add value in traditional ways as products become less objects of value in their own right, and more a means of capturing and creating value.” Automation levels the playing field for new and growing companies who would not otherwise have been able to compete with the established players.
Speed and Accuracy
One example of a CBD producer whose business was transformed by automation is CBD American Shaman, located in Kansas City, Missouri. From an initial staff of three who hand-filled several hundred bottles each day, they grew to hiring 25 people filling bottles, but they were still unable to keep up with demand, and they risked losing sales.
In a recent interview, CBD American Shaman founder and CEO Vince Sanders recalled, “Our sales were skyrocketing. It was obvious if we don’t do something soon, people are going to go elsewhere…When you do things by hand, it’s sloppy. Bottles aren’t filled exactly the same every time…There are so many things that go wrong. When you have automation, the machine does it every single time the right way. 30 labels on a bottle is 30 nice and straight…The top is on tight. It doesn’t leak in shipping. I can go on for an hour about the nightmares I’ve experienced when you do things by hand.”
Sanders’ company experienced a 500% growth in sales in 2018, and they are expecting a similar increase in 2019. Without automation, “There’s absolutely no way that would have been possible,” he says.
One challenge of automating your production is to create a strategy for it, so you can not only meet your current demands in a cost-efficient way, but also provide your company with enough manufacturing power to meet an increase in demand in the future. Companies have the option to buy a few machines in the beginning, and then add more as they grow. For example, different machines may become linked with conveyor belts over time, or an accumulating rotary turntable can be added to a machine to hold a batch of bottles until all of them had been fed through.
Choosing a Manufacturing Partner
Many points along a production line in packaging offer opportunities for automation, but before you begin to make an investment in the machinery, first develop your plan for growth. Seek out a manufacturer who is committed to your long-term success and who is willing to maintain relationship with your company past the point of sale who can serve as a consultant.
You should also ask your potential manufacturing partner about how responsive they will be to any downtime in operations. Unplanned downtime is the greatest source of lost production time for most companies, and its impact is all the more dramatic in the CBD industry. For Vince Sanders, the responsiveness Apex provided has helped keep his business profitable: “I pick up the phone, somebody answers…We’ve literally never lost any downtime in eighteen months of operation. I think that’s pretty amazing. And when you do the volume that we do, that means literally hundreds of thousands of dollars that we could lose if we were down, so it’s a big deal.”
In your planning meeting with your manufacturing partner, be ready to discuss:
- The physical characteristics of your product
- The packaging you want to use
- Your current or estimated demand
- The potential for growth expected over the next few years
- Your current staff and their level of training
The fast growth of the CBD industry opens up many opportunities, but its competitiveness makes cost-saving and efficiency especially important. A well-planned introduction of automation to your packaging systems can help you make the most of the potential of this market.