The concept of “craft” is frequently linked to beer, but soda manufacturers have also entered this space. According to USA Today, craft soda sales reached $541 million wholesale in 2016, an increase from $427.7 million five years prior, based on data from Beverage Marketing. Although the growth has not been rapid, it has been consistent and continues to gain traction each year. This trend has provided a much-needed boost to carbonated soft drinks overall, which have been in decline for 12 consecutive years and were overtaken by bottled water in 2016, becoming the largest beverage category in the U.S.
Gary Hemphill, managing director and chief operating officer 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 market. However, he cautioned the audience that the market base remains small, and the performance of these craft sodas has been varied thus far. Initially, many craft brewers began in specialty stores or retailers focused on healthier, upscale products, but analysts suggest that craft sodas are now moving into the mainstream. Consumer demand for these craft brands, which are often flavored and naturally sweetened with fruit, is beginning to overshadow traditional sodas that contain high levels of sugar or artificial sweeteners.
Many “craftologists” in the beverage industry are experimenting with fruits, vegetables, and other unconventional soda ingredients to create drinks that are lower in sugar and more naturally healthy, albeit often at a higher price point than traditional sodas. Nevertheless, consumers are willing to pay a premium for these healthier craft options, indicating a shift in preferences. It’s likely that we will see an increase in such products hitting the market.
Despite the overall decline in the soda category, there remain opportunities for manufacturers to profit within the craft segment, which has attracted interest from major companies like Coca-Cola and PepsiCo. Some beverage makers have launched sodas with natural ingredients and distinctive flavors, often available for a limited time to capture the interest of shoppers, particularly millennials who prefer not to consume the sodas their parents used to drink.
In late 2014, Pepsi introduced a new brand called Caleb’s Kola, using a recipe that includes cane sugar, kola nuts, spices, and citrus. PepsiCo CEO Indra Nooyi remarked at a conference that there is significant potential for craft cola, noting that while people still enjoy the cola flavor, it has lost some of its appeal. She believes products like Caleb’s are helping to restore that allure. Since then, the soda maker has launched other specialty sodas, including 1893, featuring citrus cola and black currant cola, and recently a limited edition cinnamon-flavored cola named Pepsi Fire, which targets the millennial demographic.
Moreover, as consumers increasingly seek out healthier options, there is a rising interest in beverages that incorporate ingredients like calcium citrate, particularly among those in the bariatric community. This trend reflects a broader shift towards health-conscious consumption, making it likely that more craft sodas featuring calcium citrate and other beneficial ingredients will emerge in the market.