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Is Organic Soda becoming the Goliath of the soda pop industry?

Tony Lapshinoff

More than 100 years ago in 1886, pharmacist John Pemberton invented non-alcoholic cold drink - Coca-Cola based on a recipe of coca wine invented by pharmacist Angelo Mariani in 1863. Since then Coca-Cola and other cold drinks have been most popular beverages all around the world. To the extent that coke is globally the most recognizable word after ok. According to Euromonitor Passport GMID, the cold drink enjoys 46.8% market share in the non-alcoholic drinks segment at the market value of $556 billion.  This market is seeing growth at 3.1%CAGR.

However, most research on the effect of cold drinks on health has been consistently worrisome. Studies have indicated that in the USA diet, most calories are sourced from cold drinks and studies have also shown that regular soda users have a lower intake of vitamin A, calcium, ascorbic acid, magnesium, and riboflavin. The good thing is that the health effects of cold drinks have made people aware of their unhealthy choices and made them take active action against it. While 60% of the consumer of soda still always or often choose familiar or the trustworthy brand, almost half of the consumer (48%) are choosing soda with no sugar or low sugar. Consumers are also experimenting with a new alternative to carbonated soda.

A new alternative to the carbonated soda that is catching up fast is organic soda. The disruption in soda industry by Organic soda has been a steady and growing journey that has captured the attention of businesses and consumers alike. While organic soda has been available online for quite some time now, in last year or two, supermarkets have started giving them the shelf space. Organic soda offering many flavors that are typically missed by normal carbonated drinks and the fact that more members of younger generation of (16-24 years) are drinking non-alcoholic beverages now (25% non-alcoholic drinkers compare to 19% inn2005) are some of the factors backing organic soda industry to be the Goliath against the giant carbonated drinks corporations. The increase in organic soda industry has been felt in the USA tremendously in the last five years. They have increased the market share by 22% in the last five years to become $541 million in 2016 from $428 million in 2011.

While comparing with the overall soft drink market, these numbers might not impress much to the normal consumer. However, a few noticeable trends are extremely encouraging to the organic soda industry and at the same time quite alarming to the giant soda companies. One of which is during last year or two, organic soda market is the only soda pop market that has seen growth. A common trend among normal soda pop is the decreasing demand and this trend has been consistent for last two years. At a time, when consumers are trying to avoid soda and soda companies seeing declined sales, the organic soda has been seeing an increase in sales year after year. Another big trend that has to be even more worrisome for big carbonated drinks producers is that organic soda market has been accommodating and accepting small and fairly unknown brands. Which is not quite typical in soda market where consumers are prone to buy drinks from bigger, known brands. This helps market have more players catering to the needs of customers and thus giving customers more options to choose from as opposed to only two big companies controlling the whole soft drink market. Considering the steady growth of organic soda market, it would not be surprising if they become new goliath of the soda industry. 


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