Willingness to Pay (WTP)

Willingness to Pay (WTP) is an economic concept representing the maximum price at or below which a consumer will definitely buy one unit of a product or service. In the evolving beverage ecosystem, WTP is a critical metric for understanding how premiumization in one category translates to pricing tolerance in adjacent functional categories.

WTP in Cannabis Beverages

Consumer WTP in the alternative beverage market is highly sensitive to specific functional or psychoactive ingredients. Academic research indicates that consumers demonstrate a significantly higher WTP for THC-infused beverages compared to CBD-infused options. Specifically, the mean WTP for a THC drink is roughly 12.5% higher per 12 oz can than its CBD counterpart. This indicates stronger premiumization potential for psychoactive cannabis-beverages and validates the industry’s shift toward THC as a primary driver of value.

Furthermore, crossover trends show that consumers who prefer premium, flavor-forward alternatives to traditional beer—such as hard cider and hard seltzers—exhibit an increased WTP for THC-infused sparkling waters. The premium pricing tolerance established in the craft cider and seltzer markets directly benefits the unit economics of these emerging functional beverages, allowing them to maintain high margins and achieve pricing-parity with craft alcohol.

WTP in the NoLo Sector

In the non-alcoholic (NoLo) space, brands rely heavily on high WTP to maintain pricing-parity with traditional alcohol. Despite the absence of ethanol and associated excise taxes, consumers demonstrate a willingness to pay premium craft beer or luxury spirit prices for 0.0% variants, provided the product achieves taste-parity and offers sophisticated branding. This high WTP is essential to offset the severe capital expenditures required for dealcoholization and to maintain viable nolo-unit-economics.