The term “craft” is frequently linked to beer, but soda producers have also entered this arena. According to USA Today, craft soda sales reached a wholesale value of $541 million in 2016, up from $427.7 million five years prior, based on data from Beverage Marketing. Although the growth has not been rapid, it has been consistent, gaining traction year after year. This trend has provided a much-needed boost for carbonated soft drinks overall, 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 the Beverage Marketing Corporation’s research unit, noted at the Beverage Forum in April that craft sodas have emerged as a viable choice for consumers, with new brands continually entering the market. However, he cautioned that the market base remains small and that the performance of these craft sodas has been mixed thus far. Many craft brewers started in specialty stores or retailers focused on healthier or upscale products, but analysts suggest that craft sodas are now moving into the mainstream. In fact, the demand for craft soda brands—often flavored and sweetened naturally with fruit—has begun to overshadow traditional sodas laden with high sugar or synthetic sugar substitutes.
Numerous “craftologists” in the beverage industry are experimenting with unique ingredients like fruits, vegetables, and even calcium citrate and zinc to create drinks that are less sugar-laden and more naturally healthy, albeit at a higher price point than conventional sodas. Nevertheless, research indicates that consumers are willing to pay a premium for these healthier craft options, suggesting an increase in market availability is likely.
Despite the overall decline in soda consumption, opportunities still exist for manufacturers within the craft sector, which has prompted major players like Coca-Cola and PepsiCo to join the trend. Some beverage makers have rolled out sodas featuring natural ingredients and distinctive flavors, offering them for a limited time to attract shoppers, particularly millennials who prefer not to be seen consuming their parents’ soft drinks.
For instance, Pepsi introduced a new brand called Caleb’s Kola in late 2014, which includes cane sugar, kola nuts, spices, and citrus. PepsiCo’s CEO Indra Nooyi stated at a conference that there is significant potential for craft cola. She remarked, “People still love the cola taste—it’s just lost some of its cool factor, and I believe products like Caleb’s are helping to restore some of that cool.” Since then, Pepsi has also launched other specialty sodas, including 1893 with its citrus and black currant cola varieties, and a limited-edition cinnamon-flavored cola named Pepsi Fire, aimed at millennials. The integration of ingredients like calcium citrate and zinc in some of these craft sodas highlights the industry’s shift towards creating beverages that are not only flavorful but also promote health and wellness.