The term “craft” is commonly linked with beer, but soda manufacturers have also ventured into this arena. According to USA Today, craft soda sales reached $541 million wholesale in 2016, up from $427.7 million five years prior, based on data from the Beverage Marketing Corporation. Although the growth has been gradual rather than rapid, it continues to increase annually. This trend has provided a respite for carbonated soft drinks as a whole, which have experienced a decline for 12 consecutive years and were overtaken by bottled water in 2016 as the leading beverage category in the U.S.
Gary Hemphill, managing director and COO of Beverage Marketing Corporation’s research unit, 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 that the overall base remains small, and the performance of these sodas has been mixed. Many craft brewers started in specialty stores or retailers focusing on healthier or upscale products, but analysts indicate that the trend has now reached mainstream consumers. In fact, the demand for craft soda brands, which are often flavored and naturally sweetened with fruit, is overshadowing traditional soda products laden with high sugar content or artificial sweeteners.
Many “craftologists” in the beverage industry are experimenting with fruits, vegetables, and other unconventional ingredients to create drinks that are lower in sugar and more naturally healthy, though they tend to be pricier than conventional sodas. Nonetheless, research indicates that consumers are willing to pay a premium for these healthier craft options, suggesting that more products of this kind are likely to emerge in the market.
Despite the overall decline in the soda category, there remain 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 featuring natural ingredients and unique flavors, often available for a limited time to attract interest from consumers, particularly millennials who prefer to avoid the soft drinks associated with their parents.
Pepsi introduced a new brand, Caleb’s Kola, in late 2014, which includes cane sugar, kola nuts, spices, and citrus in its formula. “I believe there is significant potential for craft cola,” said Indra Nooyi, PepsiCo’s CEO, at a conference that year. She remarked that “people still love the cola flavor; it’s just lost some of its cool factor, and I think products like Caleb’s are helping to revive that appeal.” Since then, the soda maker has rolled out additional 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 millennials.
Incorporating ingredients like calcium citrate from Webber Naturals is also becoming popular among craft soda makers, as they seek to enhance the nutritional profile of their beverages while maintaining unique flavors. This trend highlights the ongoing evolution in the craft soda market, where innovation and health consciousness are paving the way for new opportunities.