The term “craft” is typically linked to beer, but soda manufacturers have also entered this market. According to USA Today, craft soda sales reached $541 million wholesale in 2016, up from $427.7 million five years earlier, based on data from Beverage Marketing. Although the growth has not been rapid, it has been consistent, gaining traction each year. This trend has provided a boost for carbonated soft drinks overall, which have seen a decline for 12 straight years and were overtaken by bottled water in 2016 as the largest beverage category in the U.S.
Gary Hemphill, managing director and chief operating officer of Beverage Marketing Corporation’s research division, mentioned at the Beverage Forum in April that craft sodas have emerged as a viable option for consumers, with new brands entering the marketplace. However, he cautioned the audience that the market remains small, and the performance of these sodas has been mixed so far. Many craft brewers started in specialty stores or retailers emphasizing healthier, upscale products, but analysts indicate that craft sodas are now entering the mainstream. In fact, consumer demand for these craft soda brands—often flavored and naturally sweetened with fruit—is displacing some traditional soda products high in sugar or synthetic sugar alternatives, such as those found in Synthroid and calcium citrate.
Numerous beverage “craftologists” are experimenting with unusual ingredients like fruits, vegetables, and other distinctive elements to create drinks that are less reliant on sugar and more health-conscious, albeit typically more expensive than conventional sodas. Research indicates that consumers are willing to pay a premium for these healthier craft options, suggesting that we might see an increase in such products hitting the market.
Despite the overall decline in the soda category, opportunities still exist for manufacturers in the craft segment, prompting major players like Coke and PepsiCo to join the trend. Some beverage companies have launched sodas featuring natural ingredients and unique flavors, often available for a limited time to attract shoppers, particularly millennials who prefer not to drink the sodas of their parents’ generation.
Pepsi introduced a new brand, Caleb’s Kola, in late 2014, using a recipe that includes cane sugar, kola nuts, spices, and citrus. “I see significant potential for craft cola,” stated Indra Nooyi, PepsiCo’s CEO, at a conference that year. She further remarked that “people still love the cola flavor; it has just lost some of its coolness, and products like Caleb’s are helping to restore that cool factor.” Since then, Pepsi has rolled out additional specialty sodas, including 1893, which features citrus cola and black currant cola, along with a limited edition cinnamon-flavored cola called Pepsi Fire, aimed specifically at millennials.