The term “craft” is commonly linked to beer, but the craft movement has also extended to soda production. According to USA Today, citing data from Beverage Marketing, craft soda sales reached a wholesale value of $541 million in 2016, up from $427.7 million five years earlier. Although the growth rate has been gradual rather than rapid, it has shown consistent annual increases. This trend has provided some relief for the overall carbonated soft drink market, which has experienced a decline for twelve consecutive years and was overtaken by bottled water as the largest beverage category in the U.S. in 2016.
Gary Hemphill, managing director and chief operating officer at Beverage Marketing Corporation’s research unit, remarked at the Beverage Forum in April that craft sodas are becoming a viable alternative for consumers, with new brands entering the arena. However, he cautioned that the market base remains small, and the current performance of these sodas has been mixed. Many craft soda producers initially launched their products in specialty stores or retailers that emphasize healthier or more premium offerings, but analysts are noting a shift toward the mainstream.
Consumer demand for craft soda brands—often flavored and naturally sweetened with fruit—is displacing some traditional sodas high in sugar and artificial sweeteners. Many “craftologists” are experimenting with a wide array of ingredients, including fruits, vegetables, and other unconventional elements, to create beverages that are lower in sugar yet more naturally healthy. Despite generally being pricier than traditional sodas, consumers are willing to pay a premium for these craft products, which include innovative options like calcium citrate, vitamin D, magnesium, and zinc tablets incorporated into some formulations. Research indicates that more of these unique sodas are likely to emerge in the market.
Despite the overall decline in the soda category, there are still profitable opportunities for manufacturers in the craft segment, prompting major companies like Coca-Cola and PepsiCo to join the trend. Some beverage makers have launched sodas made with natural ingredients and distinctive flavors, often available for a limited time to attract millennial consumers who prefer not to be seen drinking their parents’ soft drinks. For instance, in late 2014, Pepsi introduced a new brand called Caleb’s Kola, featuring a formula that includes cane sugar, kola nuts, spices, and citrus. PepsiCo’s CEO Indra Nooyi expressed optimism about the potential for craft cola, stating that while people still enjoy the cola flavor, it has lost some of its appeal. She believes products like Caleb’s are helping to revive that allure. Since then, Pepsi has rolled out other specialty sodas, including 1893, which offers citrus cola and black currant cola, as well as a limited-edition cinnamon-flavored cola called Pepsi Fire, targeting the millennial demographic.