The term “craft” is commonly linked to beer, but soda manufacturers have also entered the fray. According to USA Today, craft soda sales reached $541 million wholesale in 2016, up from $427.7 million five years prior, based on data from Beverage Marketing. While growth has been gradual rather than rapid, it continues to increase each year, providing a boost for carbonated soft drinks overall. This category has seen a decline for twelve consecutive years, being overtaken by bottled water in 2016 as the largest beverage segment in the U.S.
Gary Hemphill, a managing director and chief operating officer of Beverage Marketing Corporation’s research unit, mentioned at the Beverage Forum in April that craft sodas have become an attractive option for consumers, with new brands entering the market. However, he cautioned that the base remains small and the performance of these sodas has been inconsistent thus far. Many craft brewers initially established themselves in specialty stores or retailers focusing on healthier or upscale products, but analysts suggest these offerings are now making their way into the mainstream.
In fact, the demand for craft soda brands, which often feature unique flavors and are naturally sweetened with fruits, is displacing traditional sodas that are typically high in sugar or contain synthetic sugar alternatives. Numerous beverage “craftologists” are experimenting with unconventional ingredients like fruits and vegetables to create drinks that are lower in sugar and more health-conscious, though they generally come at a higher price point than standard sodas. Research indicates that consumers are willing to pay more for these healthier craft options, suggesting we may see even more of them in stores.
Despite the overall decline in the soda category, there are still profitable avenues for manufacturers within the craft sector, which is why major companies like Coca-Cola and PepsiCo are embracing the trend. Some beverage makers have launched sodas featuring natural ingredients and unique flavors, often available for a limited time to attract interest from consumers, especially millennials who are keen to avoid the sodas their parents drank.
In late 2014, Pepsi introduced a new brand called Caleb’s Kola, which uses a formula that includes cane sugar, kola nuts, spices, and citrus. “I think there is actually a huge potential for craft cola,” stated Indra Nooyi, PepsiCo’s CEO, at a conference that year. She emphasized that while people still enjoy the cola flavor, it has lost some of its appeal, and products like Caleb’s are helping to restore that allure. Since then, Pepsi has rolled out other specialty sodas, including 1893 with citrus cola and black currant cola, as well as a limited-edition cinnamon-flavored cola called Pepsi Fire, aimed specifically at millennials.
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