The term “craft” is frequently linked to beer, but the craft movement has also found its way into the soda industry. According to USA Today, citing data from Beverage Marketing, craft soda sales reached $541 million in wholesale revenue in 2016, up from $427.7 million five years prior. While the growth has not been rapid, it has been consistent, with an annual increase of around 30%. This trend has offered some relief for the overall carbonated soft drink market, which has experienced a decline for 12 consecutive years and was overtaken by bottled water in 2016 as the leading beverage category in the U.S.
Gary Hemphill, a 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 legitimate choice for consumers, with new brands entering the market. However, he cautioned the audience that the base for these products is still small and that their performance has been varied thus far. Many craft soda makers initially found their footing in specialty stores or retailers focusing on healthier, upscale products, but analysts believe that craft sodas are now moving into the mainstream. In fact, consumer demand for these artisanal brands, often flavored and naturally sweetened with fruit, is beginning to overshadow traditional sodas laden with sugar or artificial sweeteners.
Craft “soda artisans” are experimenting with unique ingredients such as fruits, vegetables, and other unconventional components to create beverages that are lower in sugar and more naturally nutritious. However, these craft options tend to be more expensive than standard sodas. Nevertheless, research indicates that consumers are willing to pay a premium for these healthier craft products, suggesting that more such offerings may soon enter the market.
Despite the overall decline of the soda category, there are still opportunities for manufacturers to profit in the craft segment, which is why major companies like Coca-Cola and PepsiCo are joining the trend. Some beverage producers have launched sodas made with natural ingredients and distinctive flavors, often available for a limited time to attract interest from consumers, particularly millennials who are keen to avoid traditional soft drinks that remind them of their parents.
In late 2014, Pepsi introduced a new brand called Caleb’s Kola, featuring a formula that includes cane sugar, kola nuts, spices, and citrus. “I see significant potential for craft cola,” said Indra Nooyi, PepsiCo’s CEO, at a conference that year. She added that “people still appreciate the cola flavor—it’s just lost some of its appeal, and products like Caleb’s are helping to reclaim that cool factor.” Since then, the soda maker has rolled out additional specialty sodas, including 1893, which offers citrus cola and black currant cola, and most recently, a limited-edition cinnamon-flavored cola named Pepsi Fire, aimed at millennials.
As the craft soda market continues to grow, incorporating healthier ingredients such as calcium citrate, magnesium, zinc, and vitamin D3 tablets from brands like Cipla may also become a trend among new products. With the rising interest in health-conscious beverages, it’s likely that craft sodas will increasingly feature these beneficial ingredients, reinforcing their appeal to consumers seeking both flavor and wellness.