Portal - Company - Kiva
|
Company Name: Kiva Confections Categories: Edibles |
Geographic Locations: California, Arizona, Nevada List of Brands: Kiva Subcategories: Chocolates |
Executive Summary
- Kiva Confections is the largest chocolate brand in California
- Kiva Confections’ chocolates are marketed as high quality with low to moderate dosage levels
- Kiva Confections has strong distribution statewide, but particularly in the Bay Area
- Kiva Confections’ consumer base is overwhelmingly female, affluent and single
- Kiva Confections’ patients appreciate their small pack sizes and low dosages, as well as taste and discretion
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: Kiva Confections Performance in Major California Markets (August 2016): Edibles
| Market | Percent of Dispensaries Carrying the Brand | Brand Share of Category | Brand Ranking in Category | Change in Ranking Since January 2016 |
| California | 0.52 | 0.07 | 2 | No change |
| Sacramento | 0.64 | 0.08 | 1 | 1 |
| Bay Area | 0.68 | 0.1 | 1 | No change |
| Los Angeles | 0.6 | 0.08 | 2 | No change |
| Orange County | 0.51 | 0.07 | 3 | 1 |
| San Diego | 0.36 | 0.04 | 6 | -1 |
Geographic Distribution
In the edibles category of California’s medical cannabis market, only Cheeba Chews products are found in more dispensaries than Kiva Confections (Kiva) products. The companies are not direct competitors, with Cheeba Chews focused on the sugar candy subcategory and Kiva focused on chocolate. Within the chocolate subcategory, Kiva’s distribution is dominant. The company’s products are found in far more dispensaries than the products from Liquid Gold and Bhang (its closest competitors in chocolate).
When metropolitan regions are analyzed, Kiva looks even stronger. The number of dispensaries carrying Kiva products in the state’s dominant markets, Los Angeles and the San Francisco Bay Area, is greater than their average statewide. Kiva’s market share in the chocolate subcategory in these regions is more than double that of its closest competitors.
Chocolate products are a smaller segment of the edibles market in Southern California’s smaller markets (Orange County and San Diego). For this reason, Kiva is less prevalent then baked goods and sugar candy companies like Cheeba Chews, Edipure, Korova, Bhang, and Kushy Punch. The company’s distribution network is significantly underdeveloped in San Diego compared to the rest of the state.
Consumer Profiles
The most pronounced feature of Kiva consumers is they are over 70% female. This is not the case in the broader market where females make up slightly less than 50% of consumers.[1] Kiva buyers also tend to be affluent, educated, and single.[2] They consume marijuana much less frequently than the average consumer, with 33% of Kiva buyers saying they do so only 1 or 2 days per week. Infrequent users are therefore more than 3 times as important to Kiva as they are in the broader market, where only 10% of consumers use marijuana this infrequently. Nearly 20% of surveyed Kiva consumers hold graduate degrees, making this demographic over 3 times as important for Kiva as it is for the rest of the market.
Purchasing Drivers
Kiva consumers appreciate the ability to buy low dosage chocolate products at relatively low prices.[3] Of the top 10 chocolate companies by market share, only 2 have average lower prices than Kiva. However, these companies appear less professional than Kiva in terms of product packaging and marketing materials. Kiva appeals to consumers looking for more upscale chocolate products and competes with other companies in the category including Bhang, Liquid Gold, and Venice Cookie Company products by offering smaller package sizes. Moderate cannabis consumers seeking low dosage products more targeted at professional lifestyles can purchase Kiva’s 15mg Kiva Minis or 5mg Kiva Terra Bites (the latter being sold in tins containing 120mg total, or 24 Kiva Terra Bites) for modest prices. However, low prices are not the only consideration. Kiva consumers are more concerned about a product’s taste and ability to be consumed discreetly than the average customer.[4]
Figure 2: Average Income of California Medical Marijuana Customers by Brand
Figure 3: Drivers of Kiva Confections Sales
Consumer Satisfaction
Kiva appears to be building brand loyalty with high customer satisfaction ratings. Approximately 43% of Kiva customers said they are “very likely” to continue purchasing the brand’s products, significantly higher than the 31% of consumers who said this for the average brand. Yet Kiva, the leading chocolate brand, has not been able to generate the high satisfaction levels Korova (the leader in baked goods) has achieved. Korova customers are far more likely than Kiva customers to say they are “extremely satisfied” with their purchases.[5] This suggests marijuana plays less of a role for customers attracted to Kiva’s low potency strategy than it does for Korova customers, who tend to seek extremely high potency products, but there may be limits to a low potency product portfolio like Kiva offers. When compared to direct competitors in chocolate, Kiva’s satisfaction ratings are about average. The company scores around the same as Liquid Gold’s chocolate bars, but far lower than Bhang.[6]
Figure 4: Overall Satisfaction Levels across Leading Medical Marijuana Brands
Consumer Preferences
While Kiva customers gave only average satisfaction levels with the company’s products, they do not seem to notice any clear shortcomings. When asked which specific criticisms they have of Kiva products, the only significant response given was price.[7] This supports the evidence Kiva consumers are price-conscious despite being somewhat affluent and seeking high-quality products. Criticism focused on price might actually be positive for the brand because it suggests consumers do not have other complaints.
One aspect Kiva product customers rate more highly than the average are the dosages they offer. Their doses allow customers to buy high quality chocolate products that can be consumed one-by-one at very small doses.[8] However, they are not as satisfied with Kiva’s package sizes, perhaps indicating they would like to be able to buy larger packages of small dosage products.[9]
Feedback regarding consumer satisfaction levels indicates Kiva may have an opportunity to offer larger packages of its Kiva Minis and Kiva Terra Bites. This could complement its existing ability to attract customers interested in the low price of these products at current sizes. However, consumer feedback suggests the company has failed to achieve higher satisfaction levels than its competitors. This may leave Kiva vulnerable to competition from other products offering high-quality, low dosage chocolate products at a similar value.
Brand Portfolio and Competitors
Kiva offers a line of easily-identifiable, consistent products. Kiva only makes chocolate products, and it is the only leading chocolate company to offer very small dosage products. They come in 3 basic sizes (bars, minis and bites) and 6 flavors, including dark and milk chocolate. Kiva’s share of the chocolate market in California is nearly double that of Bhang’s, its closest competitor.
Bhang offers edibles and vape products. Its chocolate bar offerings are similar to Kiva but offer a greater variety of flavor and potency combinations. Bhang does not have smaller products that compete directly with Kiva Bites, but it does have a chewy chocolate truffle. This comes in various potencies and their lower level truffle product is similar to a 15mg Kiva Mini. The company advertises its chocolate products primarily as “world class chocolate” and promotes how it uses fair trade cacao from Venezuela.
Liquid Gold (a brand offered by G FarmaLabs) focuses on chocolate but offers a variety of other products including raw honey, peanut brittle, and chocolate-covered pretzels. Liquid Gold has a smaller share of the chocolate market than Kiva or Bhang. Its products compete with Kiva through a range of 210mg chocolate bars in 16 flavors (including Pina Colada and Chocolate n’ Bacon). Liquid Gold also offers smaller products including 50mg heart-shaped chocolates (sold individually or in large jars) 25mg chocolate truffles sold in packs of 4 or 8, and 25mg chocolate-covered cherries. All of these products come in various flavors of dark chocolate and milk chocolate.
Korova offers larger products (including 500 and 1,000mg baked chocolate bars) and a gluten-free, vegan chocolate peanut butter bar. All of their chocolate items are baked, so Korova does not compete directly with Kiva’s non-baked chocolate products. However, the company offers an example of successful branding Kiva could use to expand market share into differentiated products and consumer satisfaction levels.
Figure 5: Statewide Brand Share by Subcategory (August 2016)
Chocolates
| Company | Percent of Dispensaries Carrying the Brand | Brand Share of Category | Brand Ranking in Category | Change in Ranking Since January 2016 |
| Kiva Confections | 0.52 | 0.33 | 1 | No change |
| Bhang | 0.3 | 0.13 | 2 | No change |
| Liquid Gold | 0.22 | 0.08 | 3 | No change |
| Venice Cookie Company | 0.19 | 0.04 | 4 | 1 |
| Altai | 0.09 | 0.03 | 5 | 23 |
Kiva’s 2016 launch of a CBD chocolate bar includes them in a group of 6 of California’s top 10 chocolate brands offering CBD bars. Bhang, Venice Cookie Company, Hashman, Hi-Fi, and Day Dreamers already have at least one CBD bar in their product lines. This leaves Liquid Gold as the last large chocolate bar company without a CBD offering. Altai, Hubby Bar, and Varavo are smaller (Altai does not produce chocolate bars) and likewise do not have CBD products.
With the launch of Kiva’s CBD bar, the company is positioning itself in a growing segment of the market. CBD dominant products are becoming increasingly attractive in both medical and recreational markets, particularly amongst higher income and more health conscious consumers. These customers make up Kiva's target consumer base.
CBD products are desired by some patients because they deliver the medicinal benefits of cannabis without the mind altering effects of THC dominant products. By expanding its reach into CBD dominant products, Kiva is creating its own version of an increasingly prominent product most of the company’s competitors already sell.
Company positioning
Kiva has built their brand around high-quality, all-natural chocolate products. Its simple product line is built around chocolate bars that appeal to relatively affluent, moderate chocolate consumers, and two smaller products that allow the company to distinguish itself from competitors based on dosage size. Despite competing only in the chocolate subcategory, Kiva has the 2nd-highest market share in the California edibles market. This strategy likely keeps costs low, which appears to be a factor in the company’s success. The strategy does carry risks, as a new entrant with a strong chocolate bar offering or low dosage chocolate products could threaten sales.
Competitive advantages / Threats
Kiva’s products do not offer as much variety as Bhang or Liquid Gold, but the small size of Kiva Minis and Kiva Bites is unique and likely attracts customers to Kiva. Given the company’s extreme reliance on chocolate products, maintaining a dominant market share advantage over Bhang and Liquid Gold in this subcategory of the market is important to Kiva’s success. With surveys of consumers suggesting Kiva’s products are not superior to Bhang’s in terms of the ability to satisfy customers, Kiva’s ability to continue leveraging its existing distribution advantage and appeal to moderate consumers will be essential to their success.
Opportunities
Kiva is well positioned to take advantage of growth opportunities that would be offered by legalization of a recreational market in California. The company’s smaller products would likely need only small changes to comply with regulations in such a market, which could include caps on THC content that could disqualify many chocolate products that exist in today’s medical market.
[1] 71% of Kiva customers reported their gender to be female, compared to 48% of all CA medical patients surveyed.
[2] 45% of Kiva customers reported household income of more than $75,000, compared to just 25% of all CA medical patients surveyed.
19% of Kiva customers reported having completed graduate or professional degrees, compared to just 6% of all CA medical patients surveyed.
57% of Kiva customers reported being single (never married) compared to 41% of all CA medical patients surveyed.
[3] When asked to rate their level of satisfaction with a product’s dosage size, 59% of Kiva customers said they were extremely satisfied. For the average brand, 43% of customers said this.
When asked to rate their level of satisfaction with the price of a product, 41% of Kiva customers said they were extremely satisfied. For the average brand, 34% of customers said this.
[4] When asked why they chose a product, 51% of Kiva customers said, “I liked the taste.” For the average brand, 35% of customers said this. Another 19% of Kiva customers said, “It was the most discreet form of consumption.” For the average brand, 12% of customers said this.
[5] When asked to rate their level of overall satisfaction with a product, 67% of Korova customers said they were extremely satisfied. For Kiva, just 40% of customers said this.
[6] When asked to rate their overall level of satisfaction with a product, 85% of Bhang customers, 40% of Kiva customers, and 39% of Liquid Gold customers said they were extremely satisfied. For the average edible brand, 41% of customers said this.
[7] When asked what they would change about a product, 67% of Kiva customers said, “I wish the price was lower.” For the average brand, 36% of customers said this.
[8] When asked to rate their level of satisfaction with a product’s dosage size, 59% of Kiva customers said they were extremely satisfied. For the average brand, 43% said this.
[9] When asked to rate their level of satisfaction with a product’s package size, 35% of Kiva customers said they were extremely satisfied. For the average brand, 38% said this.