Craft beverages of many types are on the rise, especially craft soda. One of Europe’s most popular craft beverages is carbonated soft drinks (CSDs) consisting of organic or other high-quality ingredients. While the global soft drink industry has been struggling with a drop in sales for over a decade, it’s clear that craft soda is uniquely positioned as a sector of the soft drink industry that continues to grow and thrive despite the general slump.
Let’s take a look at some of the trends that are driving the growth of craft soda, and at how beverage producers and distributors can leverage these trends to their advantage.
A Closer Look at Craft
The notion of “craft” beverages took off in the early 2000s when the term was used to refer to alcoholic drinks. Now, the trend has been extended to include both non-alcoholic and alternative beverages (i.e. non-alcoholic drinks with ingredients that typically promote wellbeing).
There is no formal definition of “craft”; every producer has a different description. Generally, it stands for natural ingredients and minimal preservatives. Craft beverages are brewed in small batches, and frequently use pure cane sugar and natural flavors like root beer and cream soda. They lean toward unusual flavors; blends of herbs and spices, and typically use glass bottles.
What’s drawing consumers to craft beverages? First and foremost, a growing interest in wellness and healthier beverages. Millennials, in particular, are interested in small batch, artisanal products and mission statements that place an emphasis on the environment and healthy living. However, conception of what’s healthy has shifted. Consumers have moved away from looking for low fat/no sugar products to seeking ingredients that are organic, environmentally sustainable, and wholesome.
Considering these changes, it’s no surprise that Grand View Research reported that organic craft soda emerged in 2017 as the fastest-growing beverage in the industry.
More Work Means Eating on the Go
There has been a major lifestyle shift in the last 20 years or so that is largely internet based, which allows for remote work and life on-the-go. This, in addition to an increase in the number of hours that the average person spends at work, is another trend impacting the craft beverage industry.
Longer hours at work, whether office-based or remote, means that more people are eating “on the go.” As a result, according to Global Data’s Top Trends in Soft Drinks 2018, “health conscious consumers faced with pressures from work are seeking products that deliver an energy boost to help fuel their hectic lifestyles, without compromising on health.”
Time-starved professionals seeking ready-made, wholesome food and beverages that can be consumed on the go is another driver contributing to the growth of the craft beverage industry.
The Allure of Craft Sodas: 5 of Today’s Top Trends
The growing interest in craft sodas creates opportunities for new players in the industry, and for existing players open to experimenting with new products.
Old players have an advantage in brand-loyal consumers; trust and familiarity are top drivers for a consumer’s purchase decisions, and people tend to stand by trusted brands while continuing to seek out other options. Yet for anyone in the industry, old or new, leveraging the opportunities presented by “craft” means taking advantage of 5 trends shaping the market.
1. Make It Authentic
Millennials, who are on the cusp of surpassing Baby Boomers as the largest living adult generation in the U.S. according to projections from the U.S. Census Bureau, tend to perceive dining as an experience. They are inclined to pay more for authentic and flavorful beverages, and this shift is reflected in the new carbonated beverage flavors that are gaining traction, such as sparkling coconut water, vinegar drinks, and ready-to-drink teas and coffees.
2. Beyond Plastic
Beverage cartons and aluminum cans are viewed as greener alternatives to plastic packaging, and this impacts consumers’ purchasing decisions. But according to market researcher Imbibe, being green isn’t just about plastic. Consumers are also willing to pay more for products that claim to be sustainable, which can mean anything from having eco-friendly packaging to using upcycled or fair-trade ingredients. This trend is meeting the need for sustainable craft beverage products, which are known for their use of glass bottles, and carefully selected ingredients.
3. Functional Benefits
Another trend impacting the craft beverage industry is a growing consumer interest in beverages that provide particular functional benefits.
A total of 52% of global consumers feel that they need an energy boost during the course of the day so it's no surprise that interest is growing in beverages that improve concentration. Consumers are looking for other functional benefits, such as beauty, weight loss and gut health, and particular hype surrounds drinks with superfoods, such as turmeric, matcha, melatonin, aloe vera, and others.
A surprising place to look for functionality in beverages is the beer industry, and this trend is having a huge impact. In February 2019, Sierra Nevada acquired San Francisco-based brewery Sufferfest Beer Company, which caters to athletes with gluten-free beers. Meanwhile, Boston Beer Company, America’s second-largest craft beer producer, launched 26.2 in March, a light ale developed for runners with Himalayan salt and coriander.
Craft beverages, which are made from all-natural products and frequently include ingredients that provide added energy or other specific benefits, are becoming increasingly popular.
4. Ethical Soft Drinks
Imbibe’s predictions for 2019 state that the consumer’s choice is affected by environmental concerns, and one example is the growth of plant-based beverage products.
More people are adopting a flexitarian lifestyle (i.e. a diet that encourages mostly plant-based foods while allowing meat in moderation) partly because plant-based products are viewed as more sustainable than their animal-based counterparts.
The drive toward sustainability has led to the development of new, plant-based drinks, such as creams and alternative “milks” for coffee. Beverage producers are responding to this push for more ethical drinks by supporting socio-economic and environmental causes that resonate with consumers. This attraction to plant-based beverages and products that are viewed as having a strong ethical stance is another trend contributing to the growth of the craft beverage industry.
5. Water Hybrids
Infused water drinks, such as energy waters and juice-infused waters, are one of the leading trends this year. These products provide an opportunity for soft drink producers and distributors, because they maintain health appeal while still delivering on sensory and functional levels. This trend represents is yet another area of growth for the craft industry.
Craft Beverages: A Massive Opportunity for Growth
Craft sodas are increasingly becoming viewed as a popular alternative to traditional soft drinks, and as a substitute for alcoholic beverages. They appeal to today’s consumers, who are more health conscious and seeking “clean” and wholesome alternatives that reflect their lifestyle.
The growing interest in craft even affects consumers who are brand loyal, and now looking for innovation in the brands they love. For beverage producers and distributors, consumer interest in craft and the push for authentic ingredients and flavors, sustainability, functional benefits, an ethical platform, and water hybrids, provides a timely and significant opportunity for growth.
So, jump into the newest trends in craft sodas; there’s no reason to resist. Start offering new craft beverage products such as RC Cola’s Royal Crown that can help increase your market share and improve your bottom line. Want to learn more about how RC Cola International can help you break into new markets with Royal Crown Cola?
