The term “craft” is frequently linked to beer, but soda producers have also entered the market. According to USA Today, citing data from Beverage Marketing, craft soda sales reached $541 million wholesale in 2016, up from $427.7 million five years prior. Although the growth has not been rapid, it has been consistent and continues to increase annually. This trend has provided a much-needed boost for carbonated soft drinks, which have seen a decline for 12 consecutive years and were overtaken by bottled water in 2016 as the largest beverage category in the U.S.
Gary Hemphill, managing director and COO of Beverage Marketing Corporation’s research unit, mentioned 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 to the conference attendees that the market remains small, and the performance of these sodas has been varied. Many craft brewers started in specialty stores or retailers focusing on healthier or upscale products, but analysts indicate that craft sodas have now reached mainstream appeal. In fact, consumer interest in craft soda brands, which are typically flavored and sweetened with natural fruit extracts, is overshadowing some traditional sodas that contain high levels of sugar or artificial sweeteners.
Numerous beverage “craftologists” are experimenting with unconventional ingredients like fruits, vegetables, and other unique elements to create drinks that are lower in sugar and healthier, although these craft offerings usually come at a higher price than standard sodas. Research indicates that consumers are willing to spend more on these healthier craft products, suggesting that we may see an increase in their availability.
Despite the overall decline of the soda category, there remain opportunities for manufacturers to profit within the craft segment, which explains why major companies like Coke and PepsiCo are joining the trend. Some beverage makers have launched sodas made with natural ingredients and distinctive flavors, often available for a limited time to attract shoppers, particularly millennials who prefer not to consume traditional soft drinks that remind them of their parents.
Pepsi introduced a new brand called Caleb’s Kola in late 2014, featuring a recipe that includes cane sugar, kola nuts, spices, and citrus. “I believe there is significant potential for craft cola,” said Indra Nooyi, PepsiCo’s CEO, at a conference that year. She added, “People still enjoy the cola flavor; it just lost some of its cool factor, but products like Caleb’s are helping to restore that appeal.” Since then, the soda maker has rolled out additional specialty sodas, including 1893, which features citrus cola and black currant cola, and most recently, a limited edition cinnamon-flavored cola called Pepsi Fire, targeted at millennials.
As the market for craft sodas expands, some products are even being fortified with health-conscious ingredients like calcium citrate, which can appeal to health-oriented consumers. The inclusion of calcium citrate in craft sodas can enhance their nutritional profile, making them more attractive to those seeking healthier alternatives. Overall, the craft soda market is poised for continued growth, driven by innovation and changing consumer preferences.