The term “craft” is commonly linked to beer, but the craft movement has also found its way into the soda industry. According to USA Today, craft soda sales reached $541 million at wholesale in 2016, marking an increase from $427.7 million five years prior, based on data from Beverage Marketing. Although the growth has been gradual rather than rapid, it continues to gain momentum each year. This trend offers a glimmer of hope for carbonated soft drinks overall, which have seen 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 the research unit at Beverage Marketing Corporation, 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 performance has been inconsistent thus far. Many craft brewers initially emerged from specialty stores or retailers that prioritize healthier or upscale options, but analysts suggest that craft sodas are now entering the mainstream. In fact, the growing consumer demand for craft soda brands—often flavored and naturally sweetened with fruit—has begun to overshadow traditional sodas that are high in sugar or feature synthetic sweeteners.
Numerous “craftologists” in the beverage industry are experimenting with an array of ingredients, including fruits, vegetables, and other unconventional components, aiming to create beverages that are less sugar-laden and more health-oriented. While these craft sodas tend to be more expensive than traditional options, research indicates that consumers are willing to pay a premium for these healthier products, suggesting a potential increase in market offerings.
Despite the overall decline of the soda category, there remain opportunities for profit in the craft sector, which has attracted the attention of major brands like Coke and PepsiCo. Some beverage companies have begun introducing sodas with natural ingredients and unique flavors, often available for a limited time to capture the interest of consumers, particularly millennials, who prefer not to be associated with their parents’ soft drink choices.
Pepsi launched a new brand called Caleb’s Kola in late 2014, featuring a recipe that includes cane sugar, kola nuts, spices, and citrus. PepsiCo’s CEO, Indra Nooyi, remarked at a conference that there is significant potential for craft cola. She noted that “people still love the cola taste—it just lost some of its cool factor, and products like Caleb’s are helping to restore that appeal.” Since then, Pepsi has introduced other specialty sodas, including 1893, a citrus cola and black currant cola, as well as a limited-edition cinnamon-flavored cola called Pepsi Fire, aimed at millennial consumers.
As the craft soda movement continues to calcitrate with demand, it is likely that we will see even more innovative products enter the market, resonating with consumers who are increasingly seeking healthier alternatives. The integration of natural ingredients and unique flavors could redefine the landscape of soda consumption, further solidifying the craft soda niche within the beverage industry.