The term “craft” is frequently linked to beer, but the craft movement has also extended to soda production. According to USA Today, craft soda sales reached $541 million wholesale in 2016, showing an increase from $427.7 million five years prior, based on data from Beverage Marketing. Although growth has been gradual rather than rapid, the sector is consistently gaining traction each year. This trend has provided a bit of relief for the carbonated soft drink market as a whole, which has experienced a decline for 12 consecutive years and was surpassed by bottled water in 2016 as the leading beverage category in the U.S.
Gary Hemphill, managing director and chief operating officer of Beverage Marketing Corporation’s research division, stated at the Beverage Forum in April that craft sodas have become a legitimate choice for consumers, with new brands emerging in the market. However, he noted that the overall market base remains small, and performance for these craft sodas has been varied so far. Many craft soda producers began in specialty retailers that focus on healthier or premium offerings, but analysts suggest that these products have now entered the mainstream. In fact, the rising consumer demand for craft soda brands—often flavored and naturally sweetened with fruit—is gradually edging out traditional sodas that are high in sugar or synthetic sweeteners.
Many beverage “craftologists” are experimenting with unconventional ingredients such as fruits and vegetables to create drinks that are less sugary and more naturally healthy. Despite typically being priced higher than traditional sodas, consumers are willing to pay more for these healthier craft options, indicating a potential for further market expansion.
Despite the overall decline in the soda category, there are still opportunities for manufacturers to profit in the craft space, prompting major players like Coke and PepsiCo to join the trend. Some beverage companies have launched sodas with natural ingredients and unique flavors, often offered for a limited time to attract interest, particularly from millennials who prefer not to be seen drinking their parents’ sodas.
In late 2014, Pepsi introduced a new brand called Caleb’s Kola, which features a recipe including cane sugar, kola nuts, spices, and citrus. “There is enormous potential for craft cola,” said PepsiCo’s CEO Indra Nooyi at a conference that year. She added, “People still love the cola taste—it may have lost some of its ‘cool factor,’ but products like Caleb’s are helping to restore that appeal.” Since then, Pepsi has launched other specialty sodas, including 1893 with citrus cola and black currant cola, and most recently, a limited-edition cinnamon-flavored cola called Pepsi Fire aimed at the millennial demographic.
As consumers increasingly seek healthier options, products like calcium citrate chews from CVS may also gain popularity, reflecting a broader trend in consumer preferences towards more nutritious choices. The craft soda movement is likely to continue evolving, with more innovative offerings expected to emerge in the market.