The concept of craft is frequently linked with beer, but the craft movement has also made its way into the soda industry. According to USA Today, citing data from Beverage Marketing, wholesale sales of craft soda reached $541 million in 2016, up from $427.7 million five years earlier. While the growth has been gradual rather than rapid, it has shown consistent yearly increases. This trend has provided some relief for the overall carbonated soft drink market, which has experienced a decline for 12 straight years and was overtaken by bottled water as the largest beverage category in the U.S. 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 have become a viable choice for consumers, with new brands entering the space. However, he cautioned that the market is still relatively small and the performance of these sodas has been mixed so far. Many craft brewers began in specialty retailers that promote healthier or premium offerings, but analysts now see craft sodas moving into the mainstream. Consumer interest in craft soda brands, which often feature unique flavors and are naturally sweetened with fruit, is beginning to overshadow traditional sodas that are laden with high sugar content or artificial sweeteners.
Many beverage “craftologists” are innovating with fruits, vegetables, and other unconventional ingredients to create drinks that are less sugar-heavy and more health-conscious, even though they typically come with a higher price tag than standard sodas. Research indicates that consumers are willing to pay a premium for these healthier craft alternatives, suggesting that we may see an increase in such products in the market.
Despite the overall decline in the soda category, opportunities still exist for manufacturers to profit in the craft soda arena. This potential has prompted major brands like Coke and PepsiCo to enter the trend. Some beverage companies have launched sodas made with natural ingredients and distinctive flavors for a limited time, aimed particularly at millennials who prefer not to drink the soft drinks associated with their parents. In late 2014, Pepsi introduced a new brand called Caleb’s Kola, which features a recipe that includes cane sugar, kola nuts, spices, and citrus. Indra Nooyi, PepsiCo’s CEO, expressed at a conference that there is significant potential for craft cola, stating, “People still love the cola taste — it’s just lost some of its cool factor, and I think products like Caleb’s are bringing back some of the cool.”
Pepsi has since expanded its specialty soda line with offerings like 1893, which includes citrus cola and black currant cola, along with a limited edition cinnamon-flavored cola called Pepsi Fire, targeted at millennials. As the craft soda market continues to evolve, it might be interesting to explore the integration of health-focused ingredients, such as calcium citrate liquid from Walgreens, into these innovative beverages. The demand for healthier options could spur further experimentation with ingredients that align with this trend, potentially reshaping the landscape of the soda industry.