Originally published June 22, 2015, in FoodDive.com
The soda industry as a whole may be hurting, but craft soda may be a bright spot in an otherwise floundering industry as changing preferences lead consumers to this uniquely positioned segment. Brands like Jones Soda Co. and Reed’s Inc. are two of the dominant and established names in the craft soda industry, having produced sodas since 1986 and 1989, respectively. But more craft soda bottle makers are popping up all the time online, particularly on social media and Kickstarter, as well as in specialty grocery and even liquor stores.
It’s difficult to quantify an exact industry sales amount as the precise definition of craft soda remains hazy, but there’s no question that this market segment is growing as craft beer and other craft and artisanal industries are in tandem.
Craft soda: A healthier choice?
While few people—except maybe Warren Buffett—will argue that soda is actually good for you, some people do still consider craft soda to be a healthier choice than traditional soda brands, like Coke, Diet Coke, or Pepsi.
“A lot of the growth of the craft soda industry has to do with a movement toward being healthier in general,” said Bobby Hearn, editor-in-chief of Five Star Soda, a craft soda reviews publication. “A lot of craft sodas use natural ingredients like pure cane sugar. A lot of them are devoid of preservatives like sodium benzoate. Overall, it’s a movement toward more wholesome ingredients. Plus, when you use better ingredients, things just taste better.”
Though the craft soda industry is growing, not all soda makers have been quick to adapt to consumers’ calls for healthier products.
“More and more bottlers are more aware of what they’re putting into their products, but it’s a slow process,” said Hearn. “It started with pure cane sugar. Then they’ll move toward taking away preservatives. But that’s kind of a battle for bottlers because when you take out preservatives, you limit the shelf life of your soda, so you have to get it out quickly and make sure people are drinking it in a timely fashion. Many are also using natural juices and natural extracts. Not all sodas do that, but there’s definitely more of a movement toward it.”
In terms of shelf life, a common though controversial preservative like sodium benzoate can extend shelf life by weeks or even months. As having a shorter shelf life can increase costs for a soda maker, it's no wonder some have been slow to adopt this aspect of creating craft soda.
Despite health concerns, and declining sales, the soda industry isn’t going away anytime soon.
“People like soda. They’re just not drinking soda as much as they used to because it’s not part of their diet anymore,” said Jonathan Texeira, co-owner of beverage distributor Refreshments Direct and the Batch Craft Soda brand. “Occasionally, they’re gonna want a root beer, say, once or twice a week, and when they do, they would like to have a really good root beer.”
Crafting a definition
The craft soda movement is most often compared to the rise of craft beer, but craft beer has a fairly stringent and hotly debated definition of craft beer and craft brewer. Craft soda doesn’t yet have such a clear-cut definition.
“Everyone’s still trying to figure that out because it is a new industry,” said Hearn. “It’s hard to have a set of criteria.”
That said, some experts can agree on a few elements that separate craft soda from more traditional soda brands.
- Pure cane sugar
"If that’s not where your soda starts, a lot of people will dismiss you," Hearn said.
- Use of few to no preservatives
- Local ingredients
"You try to source your ingredients from the best possible destinations you can get them for the flavor that you’re trying to get across."
- Brewing technique
Another trait shared with craft beer that is common — though not absolute — with craft soda is brewing in batches, and some soda makers even use kettles and other similar equipment used to brew beer.
"I think small batches just kind of appeals to people to hear that verbally," said Hearn. “I don’t know that it matters in the flavor, but that’s something that craft enthusiasts like to hear.”
Whether craft soda will ever have a definition as clear-cut as Brewers Association has for craft beer is up for debate.
“The definition is a bit vague,” said Hearn. “It’s getting a little clearer, but I don’t know if there will ever be a set code, if you will, to define craft soda.”
Big food and beverage companies take notice
Craft soda hasn’t just been relegated to niche soda makers, and larger companies are getting in on the craft trend as well, especially as sales of their flagship soda products — particularly diet sodas — continue to decline. PepsiCo Inc. has stepped into the craft soda industry with a few offerings: Caleb’s Kola, Mountain Dew DEWshine — both made with real sugar, sold in glass bottles, and available in select retail markets — and now Stubborn Soda.
Being released as early as this summer, the new Stubborn Soda will be available as fountain drinks in several artisanal flavors, including Black Cherry with Tarragon and Orange Hibiscus. They will be served by a proprietary piece of equipment that emulates a "tap-like pouring ritual," PepsiCo said in a statement. These new sodas won’t be bottled, at least not yet, so consumers will generally only be able to get them at foodservice establishments.
"I wouldn’t be surprised if some of the other bigger competitor companies take notice and put out their answer to that within the next couple of months," said Hearn.
Not to be left out, Coca-Cola named Jeremy Faa the head of "Craft Beverages" for Coca-Cola North America’s Venturing and Emerging Brands unit back in March 2015.
But if major companies move in on craft soda, what does that mean for smaller craft soda producers?
"I don’t necessarily think it’s a competition because craft soda bottlers realize they can’t compete with the bigger companies, and they’re not trying to. They’re just trying to provide a different product," said Hearn. "But you can see the influence there, and you can see that the bigger companies are taking notice."
Where this does draw another interesting parallel to craft beer is how big beverage companies might fit into the craft beer or craft soda scene. Anheuser-Busch InBev has announced it would be acquiring several craft breweries over the last few years, but if AB InBev used the same ingredients and methods as craft brewers to create its "craft" brand, would AB InBev ever be considered a craft beer brewer? The same toeing of such a fine line could go for PepsiCo, Coca-Cola, and any other major soda companies that make a pass at craft soda in the future.
In the end, it’s unlikely that craft soda would replace traditional soda, but will rather supplement the industry, as craft beer has done for the overall beer industry. Craft and artisanal products are on the rise, particularly among Millennial consumers, and craft soda appears to be just one industry that will continue to see success in the coming years.
"If the cost is higher to make something because it’s better for you, people will pay that," said Hearn. "A lot of it just has to do with the audience expanding and the focus of soda changing, not necessarily to be healthier, but just to taste better and use better ingredients. As along as those trends keep up, craft soda will be here for a long time."
Written by Carolyn Heneghan