The term “craft” is typically linked to beer, but the craft movement has also made its way into the soda industry. According to USA Today, craft soda sales reached $541 million wholesale in 2016, up from $427.7 million five years earlier, as reported by Beverage Marketing’s data. Although the growth has not been rapid, it has been consistent, gaining traction year after year. This trend has provided a much-needed boost for carbonated soft drinks, which have seen a decline for 12 consecutive years, losing their top position to bottled water in 2016 as the largest beverage category in the U.S.
Gary Hemphill, managing director and COO of Beverage Marketing Corporation’s research division, noted at the Beverage Forum in April that craft sodas have emerged as a viable option for consumers, with new brands entering the market. However, he cautioned the audience that the overall market base remains small and that the performance of these sodas has been mixed thus far. Many craft soda makers initially found their niche in specialty stores or retailers focusing on healthier and more upscale offerings, but analysts believe these products are now entering the mainstream.
The growing consumer demand for craft soda brands, which are often flavored and sweetened naturally with fruit, is starting to overshadow traditional sodas that are high in sugar or artificial sweeteners. Many beverage “craftologists” are experimenting with unique ingredients like fruits and vegetables to create drinks that are less reliant on sugar and promote a more naturally healthy image, even if they tend to be pricier than conventional sodas. Research indicates that consumers are willing to pay a premium for these healthier craft options, and it wouldn’t be surprising to see more of them emerge in the market.
Despite the overall decline in the soda category, opportunities for profit still exist within the craft sector, which explains why major players like Coca-Cola and PepsiCo are jumping on this trend. Some beverage manufacturers have introduced sodas made from natural ingredients and unique flavors, often available for a limited time to attract shoppers, particularly millennials who want to avoid traditional soft drinks.
Pepsi launched a new brand called Caleb’s Kola in late 2014, featuring a formula that includes cane sugar, kola nuts, spices, and citrus. Indra Nooyi, PepsiCo’s CEO, noted at a conference that there is significant potential for craft cola, stating, “People still love the cola taste — it just lost some of its cool factor, and I think products like Caleb’s are bringing back some of that cool factor.” Since then, Pepsi has introduced other specialty sodas, including 1893, featuring citrus and black currant flavors, and most recently, a limited edition cinnamon-flavored cola called Pepsi Fire aimed at millennials.
As the craft soda market continues to grow, it celebrates not just unique flavors but also a commitment to healthier ingredients, including vitamins and calcium citrate, appealing to health-conscious consumers. With the increasing popularity of these craft beverages, we can expect to see more innovative products that incorporate nutritious elements, allowing consumers to enjoy their sodas while also prioritizing their health.