- "Craft soda," fizzy concoctions that are starting to make an impact in the $52.5 billion U.S. soft drink market, according to USA Today. Craft soda reached $541 million wholesale in 2016, up from $428 million in 2011. Volume increased 5% in 2016 to 88.8 million gallons versus 2015.
- Smaller soda bottlers are copying craft beer brewers, which grew from grassroots to challenge big giants such as AB-InBev and Molson Coors. Today’s craft sodas contain flavors such as lavender, juniper or hibiscus.
- "When you pick up a craft soda, you're saying something about yourself. You identify with the qualities of that beverage. If you pick up a craft soda or beer, you're saying, 'I’m looking for something better, more natural, more conscious of the environment," said Michael Bellas, chairman of the Beverage Marketing, told USA Today. "This has some legs. It has some good growth ahead of it. This is where the consumer is."
The term craft is often associated with beer, but soda makers also have gotten into the business. Craft soda sales reached $541 million wholesale in 2016, an increase from $427.7 million five years earlier, USA Today reported, citing data from the Beverage Marketing.
While the rise has not been fast, it’s been steady and is gaining more each year. It's been a reprieve for carbonated soft drinks as a whole — which have fallen for 12 consecutive years and were surpassed by bottled water in 2016 as the largest beverage category in the U.S.
Gary Hemphill, a managing director and chief operating officer with Beverage Marketing Corporation's research unit, said at the Beverage Forum in April that craft sodas have emerged as a viable option for consumers with new brands entering the market. But he told the audience attending the conference that the base is small and performance for these soda so far has been mixed.
Many craft brewers began in specialty stores, or retailers that focus on more healthy or upscale offerings, but analysts say it has moved to the mainstream. In fact, consumer demand for craft soda brands, which are often flavored and naturally sweetened with fruit, is crowding out some traditional soda products that are high in sugar or synthetic sugar alternatives.
Many Beverage "craftologists” are experimenting with fruits, veggies and other out-of-the-ordinary soda ingredients to create beverages that are less sugar-enhanced and more naturally healthy but at the same time are generally more pricey than traditional sodas. Yet consumers are willing to pay more for these healthier craft products, research shows. It would not be surprising to see more of these hit the market.
Despite the soda category’s overall decline, there are still opportunities for manufacturers to make money in the craft space, and it’s a reason that major players such as Coke and PepsiCo are getting in on the craze. Some beverage makers have introduced sodas with natural ingredients, unique flavors and offered them for a limited time to conger up interest from shoppers, most notably millennials who don't want to be seen drinking their mom or dad's soft drinks.
Pepsi launched a new brand, called Caleb's Kola, in late 2014 using a formula that includes cane sugar, kola nuts, spices and citrus. "I think there is actually a huge potential for craft cola," Indra Nooyi, PepsiCo's CEO said at a conference that year. She added that "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." The soda maker has introduced other specialty sodas since then including 1893, with citrus cola and black currant cola, and most recently a limited edition cinnamon-flavored cola called Pepsi Fire aimed at millennials.