The term “craft” is often linked to beer, but the craft movement has also embraced soda production. According to USA Today, citing data from Beverage Marketing, craft soda sales reached $541 million at the wholesale level in 2016, up from $427.7 million five years prior. While the growth has not been explosive, it has been consistent, with annual gains contributing to a broader trend. This rise in craft sodas has provided some relief for the overall carbonated soft drink market, which has experienced a decline for 12 consecutive years and was 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, noted at the Beverage Forum in April that craft sodas have emerged as a legitimate choice for consumers, with new brands making their debut. However, he also mentioned that the market base remains small, and the performance of these craft sodas has been varied thus far. Many craft soda producers initially found their niche in specialty retailers that emphasize healthier or more upscale products, but analysts indicate that these offerings have now entered the mainstream. Consumer interest in craft soda brands—often characterized by unique flavors and natural sweeteners like fruit—has begun to overshadow traditional sugary sodas and those with synthetic sugar substitutes.
Many beverage “craftologists” are experimenting with unconventional ingredients, such as fruits and vegetables, to produce drinks that are less reliant on sugar and more naturally health-conscious, albeit typically at a higher price point than standard sodas. Research indicates that consumers are willing to pay a premium for these healthier craft options, suggesting that more of these products may soon emerge in the marketplace.
Despite the overall decline in soda consumption, there are still profitable avenues for manufacturers within the craft segment, prompting major brands like Coke and PepsiCo to join this trend. Some beverage companies are introducing sodas made with natural ingredients and unique flavors, often available for a limited time to attract attention, particularly from millennials who prefer not to be associated with their parents’ soft drinks.
In late 2014, Pepsi launched Caleb’s Kola, a new brand featuring 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, stating, “People still love the cola taste—it’s just lost some of its cool factor, and I think products like Caleb’s are bringing back some of the cool factor.” Following this, Pepsi has introduced other specialty sodas, including 1893, which features both citrus cola and black currant cola, as well as a limited edition cinnamon-flavored cola called Pepsi Fire aimed at millennials.
Interestingly, some craft sodas are even incorporating health-conscious ingredients, such as laxative calcium citrate, to appeal to a growing market segment focused on wellness. As this trend continues, it’s likely that we’ll see more innovation in the craft soda sphere, further challenging traditional soft drink norms.