The concept of “craft” is frequently linked to beer, but the craft soda industry has also gained traction. According to a report by USA Today, citing Beverage Marketing data, wholesale craft soda sales hit $541 million in 2016, up from $427.7 million five years prior. While the growth has been gradual rather than rapid, it continues to increase annually. This trend provides a glimmer of hope for carbonated soft drinks overall, which have seen a decline for 12 consecutive years, losing their position as the leading beverage category in the U.S. to bottled water in 2016.
Gary Hemphill, managing director and COO of Beverage Marketing Corporation’s research division, noted at the Beverage Forum in April that craft sodas are becoming a viable choice for consumers, with new brands entering the market. However, he cautioned that the market remains small and the performance of these craft sodas has been mixed thus far. Initially, many craft soda producers emerged from specialty retail outlets that prioritize healthier or premium products; however, analysts indicate that these offerings are now moving into mainstream markets. In fact, the demand for craft soda brands—often infused with natural flavors and sweetened with fruit—is beginning to overshadow traditional sodas high in sugar or artificial sweeteners.
Many craft beverage creators, or “craftologists,” are experimenting with a variety of ingredients, including fruits, vegetables, and other unconventional components, to produce sodas that are less reliant on sugar and more naturally healthy. However, these products typically come at a higher price point compared to standard sodas. Research shows that consumers are willing to pay a premium for these healthier craft alternatives, suggesting an increasing presence of such products in the market.
Despite the overall decline in the soda category, opportunities remain for manufacturers to profit within the craft segment, which has attracted the attention of major players like Coca-Cola and PepsiCo. Some beverage companies have launched sodas featuring natural ingredients and unique flavors, often for a limited time, to capture the interest of younger consumers, particularly millennials, who are keen to avoid their parents’ traditional soft drinks.
Pepsi introduced a new brand, Caleb’s Kola, in late 2014, utilizing a formula that incorporates cane sugar, kola nuts, spices, and citrus. PepsiCo’s CEO Indra Nooyi remarked at a conference that there is significant potential for craft cola. She noted, “People still love the cola taste—it’s just lost some of its cool factor, and I think products like Caleb’s are reclaiming some of that cool.” Since then, Pepsi has unveiled additional specialty sodas, including 1893, which features citrus cola and black currant cola, as well as a limited edition cinnamon-flavored cola called Pepsi Fire, targeted at millennials.
In summary, the rise of craft soda, driven by natural factors such as potassium citrate and a focus on healthier ingredients, represents a growing segment of the beverage market. This trend highlights an evolving consumer preference for authenticity and quality over traditional sugary sodas, suggesting that we may see an even greater variety of craft sodas entering the marketplace in the future.