The word “craft” is commonly linked to beer, but the craft movement has also made its way into the soda industry. According to USA Today, craft soda sales hit $541 million wholesale in 2016, up from $427.7 million five years prior, as reported by Beverage Marketing. While the growth has been gradual rather than rapid, it continues to increase year after year. This trend has provided a much-needed boost for carbonated soft drinks, which have seen a decline for 12 consecutive years and were overtaken by bottled water as the leading beverage category in the U.S. in 2016.
Gary Hemphill, managing director and COO of Beverage Marketing Corporation’s research unit, mentioned at the Beverage Forum in April that craft sodas have emerged as a viable alternative for consumers, with new brands continually entering the market. However, he pointed out that the consumer base is still relatively small, and the performance of these craft sodas has been mixed so far. Many craft soda producers started in specialty stores or retailers that focus on healthier or upscale options, but analysts believe the trend is moving toward mainstream acceptance.
In fact, the demand for craft soda brands—often flavored and naturally sweetened with fruits—is beginning to overshadow traditional sodas that are high in sugar or use synthetic sweeteners. Numerous “craftologists” are experimenting with unconventional ingredients like fruits, vegetables, and others to create beverages that are lower in sugar and more naturally healthy. However, these craft sodas generally come at a higher price point compared to traditional ones. Despite this, research indicates that consumers are willing to pay a premium for these healthier alternatives, and it’s likely that more will emerge in the market.
Even with the overall decline in the soda category, opportunities for profit still exist for manufacturers within the craft segment. This is why major companies like Coca-Cola and PepsiCo are jumping on the trend. Some beverage makers have launched sodas featuring natural ingredients and unique flavors, often available for a limited time to attract interest from consumers, particularly millennials who prefer to avoid traditional soft drinks associated with their parents.
For instance, Pepsi launched a new brand called Caleb’s Kola in late 2014, using a formula that includes cane sugar, kola nuts, spices, and citrus. “I believe there is significant potential for craft cola,” said Indra Nooyi, PepsiCo’s CEO, at a conference that year. She noted that “people still enjoy cola flavor—it just lost some of its appeal, and products like Caleb’s are helping to restore that cool factor.” Since then, the soda maker has introduced other specialty sodas, including 1893 with citrus cola and black currant cola, as well as a limited edition cinnamon-flavored cola called Pepsi Fire aimed at millennials.
Additionally, as consumers increasingly seek healthier options, products infused with essential nutrients like calcium citrate, magnesium, zinc, and vitamin D3 tablets are becoming more popular. This trend aligns with the craft soda movement, where health-conscious consumers are willing to invest in beverages that not only taste good but also contribute to their overall wellness. The intersection of these trends suggests a promising future for craft sodas that cater to the evolving preferences of today’s shoppers.