Company Name: Auntie Dolores Categories: Edibles   www.auntiedolores.com info@auntiedolores.com

Geographic Locations: California, Nevada List of Brands: Auntie Dolores Subcategories: Baked Goods, Savory Snacks

 Executive Summary

• Auntie Dolores is the 19^th most popular edible brand in California, the 10^th most popular in baked goods and 2^nd in savory snacks
• The company positions itself as a wellness edibles company specializing in low potency, preservative-free vegan and gluten-free edibles
• They are the most popular brand in the Bay Area and are seeking expansion into other cannabis markets
• Market share and distribution has contracted across the state of California in 2016
• Their target market is more affluent and less frequent cannabis users
• The company relies heavily on word of mouth referrals but has below average satisfaction ratings

Methodology

Our company profiles leverage our multi-source methodology to give you the most complete view of each company from all sides. The insights provided on consumer demographics and feedback stems from Brightfield Group’s survey of more than 1,200 California medical patients in 2016. Detailed information on precise questions providing each graph and data point can be found in the report's endnotes. Market share and distribution data is based on our brand tracker, which analyzes digital menu audits from more than 1,200 dispensaries and delivery services throughout the state on a monthly basis. This is then evaluated with select POS data, survey data and interviews with dispensary owners which are used to weigh our algorithms.

Figure 1: Auntie Dolores Performance in Major California Markets (August 2016)

Market	Percent of Dispensaries Carrying the Brand	Brand Share of Category	Brand Ranking in Category	Change in Ranking Since January 2016
California	8%	0.4%	19	-6
Sacramento	3%	0.03%	81	-62
Bay Area	18%	1.3%	11	-5
Los Angeles	7%	0.4%	25	-12
Orange County	0%	0%	--	-54
San Diego	7%	0.4%	25	+13

Geographic Distribution

Auntie Dolores started in the Bay Area and remains far more prominent there than elsewhere in California. In the area around its headquarters the brand has achieved a top 10 status in the edibles market and can be found in 18% of dispensaries in the Bay Area. Distribution is limited in other areas of the state, especially in the southern cities.

The brand is strong throughout California in the savory snacks subcategory of the edibles market where it offers a larger range of healthy products than most other brands. In this subcategory, Auntie Dolores is the number 1 brand in the Bay Area and is in about 6 times as many dispensaries as Stuck Up Extracts, the statewide leader in savory snacks (see the Analysis of Brand Portfolio and Competitors section for why Stuck Up Extracts is not actually Auntie Dolores’ main competitor in this space). Elsewhere in California, the situation is reversed. Stuck Up Extracts is in about 3 times as many dispensaries statewide, driven by its dominant position atop the LA market.

In the baked goods segment (a large part of the edibles market) Auntie Dolores faces stronger competition. Even in the Bay Area, at least 7 other baked goods brands are more widespread. Outside the Bay Area, less than 4% of dispensaries carry Auntie Dolores’ baked goods products, and the company fails to earn even 1% market share in the baked goods space. Leading baked goods brands tend to have at least double these numbers.

Distribution has been declining since early 2016 when a slightly greater portion of California dispensaries carried Auntie Dolores products. This is largely due to declining distribution in Los Angeles, Sacramento, and Orange County, as well as stagnant distribution numbers in the Bay Area. However, in San Diego Auntie Dolores products are now in over 3 times as many dispensaries as they were at the beginning of the year, but the share is still small at 7%.

Consumer Profiles

Auntie Dolores relies on male customers in their 30s and 40s.[1] They tend to be more educated[2] and wealthier than the average edibles consumer in California, with 65% reporting household incomes over $75,000.[3] Just 32% of edibles consumers across the market report incomes this high. The difference may be even larger than these numbers suggest because Auntie Dolores consumers are more likely to be single (and therefore have less or no dependents) than the average consumer.[4] The brand is also highly popular amongst the Bay Area’s gay community and the name itself is rumored to be based on Mission Dolores Park, a popular park near the Castro and one of the city’s gay neighborhoods.

Figure 2: Average Income of California Medical Marijuana Customers by Brand

These patients tend to consume marijuana less frequently than other edibles consumers.[5] They are only half as likely to do so five or more days per week (62% of all edibles consumers do this compared to just 30% of Auntie Dolores consumers). Venice Cookie Company also appeals to customers who consume marijuana more moderately, and both brands tend to have lower market shares than their distribution numbers would suggest. This indicates lower turnover rates associated with the focus on lower-frequency consumers and suggests these brands’ efforts to expand to new dispensaries may suffer from a lack of value attitude by consumers.

Purchasing Drivers

Taste stands out as the driver of sales for most edibles brands. This is less true for Auntie Dolores than other leading brands, probably because the company’s focus on vegan, gluten-free and preservative-free offerings requires a sacrifice in taste.[6] Word of mouth in turn plays a much more important role than average among Auntie Dolores customers. The brand’s customers are twice as likely as the average customer to say they purchase Auntie Dolores products because their friends buy them. Generally, 18% of edibles consumers give this reason for choosing which brand to purchase compared to over 30% of Auntie Dolores customers.

With taste at the top of the list of things edibles consumers care about,[7] Auntie Dolores will likely grow slower than its less health-conscious competitors unless it can prove enthusiasm from gluten-free and vegan consumers can compensate for what its products sacrifice in taste. Survey responses demonstrate the role word of mouth plays in this community. Consumers generally do not say they chose Auntie Dolores because its products are gluten-free or vegan.[8] Instead, many of them said they did so because their friends, who are likely to have broadly similar dietary preferences, already buy the brand.[9]

Figure 3: Drivers of Auntie Dolores Sales

Consumer Satisfaction

Auntie Dolores does not generate satisfaction ratings expected from a top edibles brand.[10] With 46% of customers saying they are very satisfied with the average edibles brand, just 17% of Auntie Dolores customers claim this. Brightfield Group’s survey data indicates most top ten edibles brands, including Kiva, Korova, Venice Cookie Company, Bhang, Liquid Gold, and Cheeba Chews have 40% to 85% of customers saying they are very satisfied.

While 96% of Auntie Dolores customers said they are likely, or somewhat likely, to buy the brand’s products again (with very few saying they would not) the company appears to be failing to impress customers enough to maintain the levels of repeat sales and brand loyalty expected from the average edibles brand. On average, 30% of customers said they are very likely to buy a brand’s products again. For Auntie Dolores, the satisfaction level is just 22%.[11] For a brand relying on word of mouth like Auntie Dolores, this may prove to be a precarious situation if additional brands move to position themselves as wellness companies to compete for the same set of customers.

Figure 4: Overall Satisfaction Levels across Leading Medical Marijuana Brands

Consumer Preferences

Auntie Dolores’ struggles to leave customers feeling “extremely satisfied” continue to be evident when they are asked about specific product characteristics. Generally, customers say Auntie Dolores products are somewhat satisfying, but not extremely so. This is the case when asked about taste, effectiveness, and quality of ingredients.[12] Yet customers do not identify specific complaints about the company’s products. When asked what they would change, 52% said they wish Auntie Dolores’ prices were lower.[13] This may reflect an impression the brand’s modest dosage sizes do not offer good value, or it may simply reflect the fact that in the absence of clear shortcomings customers tend to point to price when asked what they dislike about a product. The latter explanation is more likely because dosage is the only clear area where Auntie Dolores is outperforming the competition.

The brand’s customers are much less likely than other customers to say they wish dosage was higher. On average, 16% of people say this for most edibles brands compared to less than 1% of Auntie Dolores customers.[14] In this sense, it is clear the company’s standardized dosing strategy is appealing to its customers, but this may be at the expense of other aspects of the product which have failed to generate the kind of satisfaction ratings expected from leading (or even average) edibles brands.

Brand Portfolio and Competitors

Auntie Dolores appeals to a more niche market than most other leading brands, billing itself primarily as a wellness company offering modest THC doses or CBD based products to patients who medicate less frequently. This has been a winning strategy in the savory snacks subcategory because the brand has been able to differentiate itself based on appeal to health-conscious customers in a space normally filled by what Auntie Dolores customers would likely call “junk food.” In baked goods, there is more competition for the health-conscious crowd and Auntie Dolores has not been able to differentiate itself to the same degree. The company is the most comprehensively health-conscious brand of baked goods, but it is not the only source of healthy products.

Baked Goods

About half of the top 15 baked goods brands (by market share) offer vegan or gluten-free baked goods. Auntie Dolores and MaGooch integrate wellness into a greater share of their products than the rest, but Korova, Kaneh, Venice Cookie Company, Hashman, and Utopia Farms sell gluten-free or vegan bars and cookies as well. The other 8 out of the top 15 brands make little or no effort to offer healthy products. These tend to be brands with a more “homegrown” feel, including Trikom Treats, TKO Edibles, Miss Mary Jane, Topanga Harvest, Enjoyable Edibles, Koala T. Eddies, and Big Pete’s Treats.[15]

The set of companies that offer healthy baked goods products have performed slightly better in 2016. The majority of them gained market share from January to August compared to the rest of the state’s top 15 baked goods brands. However, the company that has done the most to position itself as a wellness brand (Auntie Dolores) has been one of the worst performers of the group this year.

Auntie Dolores has sought to differentiate its product portfolio by focusing on low potency products. For this reason, there is very little overlap between the customers who buy from Auntie Dolores and customers who buy from Korova, a company that has found a winning formula in its high potency (300mg to 1,000mg) product line.[16] Even Korova’s gluten-free vegan chocolate and peanut butter bar has a much higher potency (300mg) than any Auntie Dolores product. Yet other companies, particularly Kaneh and Venice Cookie Company, are trying to appeal to all consumers by offering 1,000mg products to rival Korova while also offering lower potency products. However, these brands’ lowest potency products still register 30mg to 50mg of THC. For new marijuana patients, or those with low tolerance, Auntie Dolores’ 10mg single cookie stands out as a much more conservative option.

Figure 5: Statewide Brand Share by Subcategory (August 2016)

Brand	Percent of Dispensaries Carrying the Brand	Brand Share of Category	Brand Ranking in Category	Change in Ranking Since January 2016
Korova	44%	26%	1	No change
Trikom Treats	18%	10%	2	+2
TKO Edibles	16%	5%	3	-1
Kaneh	9%	4%	4	-1
Venice Cookie Company	10%	2%	5	+5
Miss Mary Jane	3%	1%	6	-1
Topanga Harvest	5%	1%	7	+3
Enjoyable Edibles	6%	1%	8	+4
Hashman	4%	0.8%	9	-2
Auntie Dolores	4%	0.6%	10	-4
MaGooch Edibles	3%	0.5%	11	+4
Koala T. Eddies	2%	0.5%	12	-3

Savory Snacks

In savory snacks, a subcategory including everything from gold fish to granola to dried fruit, Auntie Dolores faces less competition as a wellness brand. Brands in this space often appeal to ideas of traditional “munchies” which many of Auntie Dolores’ customers probably perceive as junk food. Though the subcategory pales in comparison to more established spaces like baked goods, chocolate, and sugar candies, Stuck Up Extracts (with its line of marijuana-infused snacks that includes Weetos, OG Fish, and Cannamon Toast Crunch) proves savory snacks can launch a company to prominence. Stuck Up Extracts are most established in LA where the brand is on the shelves of a very respectable 21% of dispensaries. No other savory snacks brand comes close to matching this level of distribution in southern California (Auntie Dolores is offered in only 4% of dispensaries). The situation in the Bay Area is more fragmented with Auntie Dolores having a presence in 14% of the Bay Area dispensaries. Stuck Up Extracts is offered in only 2% of Bay Area dispensaries.

Behind these two leaders, whose differing regard for healthy ingredients means they do not necessarily compete for the same customers, is a set of brands that are in no more than 2% of the dispensaries statewide. These extremely limited distribution numbers are due to the relatively low prominence of the savory snacks subcategory, which has not generally been a viable space in which to build a brand. Yet it is becoming a space that can appeal to people who need to medicate but want to avoid consuming the gluten or sugar that tends to be widespread in baked goods, chocolate, and sugar candies. One advantage these customers see in savory snacks products like glazed nut mixes or granola, there is less of a trade-off between taste and healthy ingredients than there is with baked goods or chocolates.

Figure 6: Statewide Brand Share by Subcategory (August 2016)

Brand	Percent of Dispensaries Carrying the Brand	Brand Share of Category	Brand Ranking in Category	Change in Ranking Since January 2016
Stuck Up Extracts	17%	27%	1	No change
Auntie Dolores	5%	6%	2	No change
Uncle Ronnie’s	2%	2%	3	+6
MediPops	2%	2%	4	-1
EdiPure	2%	1%	5	-1

MaGooch and Pura Vida, like Auntie Dolores, have decided to pursue health-conscious people who prefer to medicate with savory products. LA-based MaGooch advertises a line of “naturally vegan” products, but does not actually offer the type of high-quality snacks likely to threaten Auntie Dolores’ appeal.[17] MaGooch offers a very similar line of products that are in half as many LA dispensaries as Auntie Dolores but growing quickly. MaGooch is now in 6 times as many LA dispensaries as it was in January of 2016. Auntie Dolores is still twice as widespread and has nearly 5 times MaGooch’s market share in the region, but has actually seen market share and distribution fall since January. Under current trends, MaGooch could overtake Auntie Dolores in southern California by both metrics in 2017.

Pura Vida is more of a threat in the Bay Area (where MaGooch is largely absent). The company has positioned itself as a wellness brand like Auntie Dolores, but with more of a focus on helping people maintain active, healthy lifestyles while medicating. Pura Vida offers 100mg protein bars and 250mg packages of granola, seasoned seeds, and trail mix. The latter have more than twice as high a potency as equivalent Auntie Dolores products and Pura Vida tends to refer to a dose as 25mg in its marketing communications. Pura Vida does not have other product lines, but both companies offer gluten-free snacks to a similar customer base and are widespread in the Bay Area. This suggests Pura Vida may be Auntie Dolores’ most threatening competitor in the gluten-free savory snacks market. They have also grown rapidly since early 2016, quadrupling market share and distribution statewide from January to August (from a very low base). During this time period, Auntie Dolores has lost nearly half its statewide market share in savory snacks and has seen distribution contract. Although Auntie Dolores is still the leader in the Bay Area, Pura Vida’s growth has been focused in southern California and does not yet threaten Auntie Dolores’ dominance around San Francisco.

Unlike baked goods, savory snacks companies that pursue health-conscious customers have a mixed record this year. Auntie Dolores has been the weakest performer among important savory snacks companies and Pura Vida has been one of the strongest.

Company positioning

Auntie Dolores stands out in the medical cannabis space due to its dual focus on health-conscious consumers and low-potency products. This specialization propelled the brand to prominence in 2014 and 2015, but has contracted somewhat in 2016. This may be due to increased focus on pursuing licensing agreements in other states. It is not uncommon for brands to lose their momentum in California as they devote their resources toward the regulatory barriers involved with national expansion.

Competitive advantages

The specialization strategy is based on sound market research, but nonetheless carries risks. Gluten-free and vegan food (non-cannabis) is a quickly growing market, and up to 7% of the US population have health conditions that require gluten free diets.[18] Brightfield Group survey data indicates that 11% of legal cannabis consumers are willing to pay extra for gluten-free products,[19] and this number is probably higher in areas like San Francisco. Auntie Dolores’ expansion plans are likely focused on other progressive metro areas with similarly high shares of consumers interested in gluten-free and vegan offerings.

Threats

Despite the promising market size and Auntie Dolores’ success in establishing itself as a leading wellness brand, the company will likely find expansion more expensive than other top brands. The specialized nature of its customer base means each dispensary the brand reaches will likely devote less shelf space and generate fewer sales than would be the norm for other brands. To counteract this effect, Auntie Dolores will have to rely on premium pricing, consumer loyalty, and strong, differentiated branding. It appeared to be doing this successfully in California until recently, but it is uncertain if the company’s wellness-centered strategy is sufficient to push it toward national leadership.

Opportunities

Auntie Dolores has focused on is low potency products. This appeals both to consumers who are new to edibles and established consumers who do not need high dosage medication. The strategy is a stark contrast to Korova, Kaneh, and Venice Cookie Company. Korova has built one of the strongest positions in the industry by focusing on extremely high potency products. Kaneh and Venice Cookie Company have experienced some of the strongest growth in the edibles space this year by offering a diversified portfolio that includes some products able to rival Korova in potency. Selling such potent products allows a company to tap into demand from the buyers who consume cannabis most frequently, but it may pose risks for companies that hope to move into recreational markets.

Auntie Dolores has done more than most California-based companies to anticipate the evolution of a California recreational market by bringing its products closer to compliance with standards emerging in other states regarding 10mg dosage sizes and child-proof packaging. The company’s leadership believes if voters approve the Adult Use of Marijuana Act (AUMA) in November, these standards are likely to become the basis for California’s recreational regulations.

[1] Over 60% of Auntie Dolores customers are in their 30s or 40s, compared to about 50% of all CA medical patients surveyed.

[2] 65% of Auntie Dolores customers have a bachelor degree, compared to just 23% of all CA medical patients surveyed.

[3] 66% of Auntie Dolores customers reported household income over $75,000, compared to just 30% of all CA medical patients surveyed.

[4] 61% of Auntie Dolores customers are single, compared to 41% of all CA medical patients surveyed.

[5] 70% of Auntie Dolores customers medicate 4 or fewer days per week, compared to 37% of all CA medical patients surveyed who medicate this infrequently.

[6] 43% of Auntie Dolores patients said they chose Auntie Dolores because they like the taste of the brand’s products. 52% of Kiva and Venice Cookie Company customers said this, as did 54% of customers who bought Liquid Gold edibles (excluding Liquid Gold Extracts).

[7] When asked why they chose a brand, 35% of all customers surveyed said “I like the taste.”. Another 27% said “The dosage suited my needs or tolerance level”, and 20% more said “I trust the brand to give me a consistent experience.” Taste is more important for driving customers to Auntie Dolores than it is for the average brand, but Auntie Dolores aspires to leadership and must benchmark itself against leading edibles brand that see taste driving more than half of their sales volume.

[8] When asked why they chose a brand, less than 10% of Auntie Dolores customers surveyed said they chose the brand’s products because they are vegan or gluten-free.

[9] When asked why they chose a brand, 30% of Auntie Dolores customers say, “My friends purchase the same product.” 18% of all CA medical patients surveyed said this.

[10] When asked to rate their level of overall satisfaction with an Auntie Dolores product, just 17% of Auntie Dolores customers said they were extremely satisfied. For the average edibles brand, 41% of customers said this.

[11] When asked how likely they are to purchase a brand’s products again, 22% of Auntie Dolores customers said “Very likely,” 35% said, “Likely,” and 39% said, “Somewhat likely.” Only about 4% say they are unlikely to do so. For the average medical marijuana brand, 30% say they are “Very likely” to do so, another 30% say, “Likely,” and 20% say “Somewhat likely.”

[12] When asked to rate their level of satisfaction with a product’s taste, 30% of Auntie Dolores customers said, “Extremely satisfied” and 50% said, “Somewhat satisfied.” For the average medical brand, these numbers are inverted: 54% of customers tend to be “Extremely satisfied” and 33% tend to be “Somewhat satisfied.”

When asked to rate their level of satisfaction a product’s ability to produce desired effects, 20% of Auntie Dolores customers said, “Extremely satisfied” and 60% said, “Somewhat satisfied.” For the average medical brand, 49% of customers tend to be “Extremely satisfied” and 37% tend to be “Somewhat satisfied.”

When asked to rate their level of satisfaction with the quality of a product’s ingredients 10% of Auntie Dolores customers said, “Extremely satisfied” and 70% said, “Somewhat satisfied.” For the average medical brand, 46% of customers tend to be “Extremely satisfied” and 34% tend to be “Somewhat satisfied.”

[13] When asked what one thing they would change about a product, 52% of Auntie Dolores customers said they wish the price was lower. For the average brand, this is still the most common complaint – but just 36% of customers say it.

[14] When asked what one thing they would change about a product, only 4% of Auntie Dolores customers said they wish the dosage was higher or lower. For the average brand, 16% of customers say they wish dosage was higher and another 4% say they wish it was lower.

[15] Some of these brands continue to rely on old-school packaging that resembles Ziploc bags with home-made cardstock labels, others lack websites, and others have chosen to retain a “Mom and Pop” feel in their marketing. Swerve Confections, with a professional website and the sleek branding typical of concentrates companies (they also offer hash and rosin), is an exception.

[16] Korova’s strategy dates back to the genesis of medical marijuana, when patients suffering from debilitating conditions like cancer or AIDS required the ability to consume enormous quantities of THC.

[17] MaGooch’s cheesy snacks, caramel popcorn, and pretzels may be naturally vegan, but they are not particularly healthy snacks.

[18] BeyondCeliac.org

[19] Based on a 2015 Brightfield Group Survey of more than 500 medical marijuana patients or adult consumers in states where recreational marijuana is legal.