Healthy Growth: Craft Soda Continues to Evolve

Soda may be caught in the crosshairs of the war on obesity, but that doesn’t mean there isn’t still a time and place for something sweet.

Craft soda brands showed that they’re still innovating and reinventing themselves at the 2017 Winter Fancy Food Show in San Francisco. Even as the category faces challenges from institutions seeking to limit consumer intake of sugar and calories, smaller entrepreneurs are stepping up to the challenge to bring new, better-for-you beverages to store shelves. The Fancy Food Show gave a bit of insight into where premium and artisanal soda is heading next.

Many Brands Confident About FDA Changes

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In May, 2016, the U.S. Food and Drug Administration (FDA) unveiled a revamped Nutrition Facts panel that features calorie count in a larger type and for the first time must clarify the breakdown between natural and added sugars. Companies have until July 2018 to incorporate the panel onto product labels. While the new requirement and overall health and wellness trend pose an existential threat to big soda companies, some craft soda entrepreneurs hope the change may be a benefit to smaller, better-for-you brands.

Sharelle Klaus, founder and CEO of Dry Soda, called the regulations were “great” and that for low-sugar, mid-calorie brands like Dry, the changes aren’t worrisome.

“I think it will be fine, it can actually help brands in the craft area,” Klaus said. “A lot of other craft [brands] do have a lot of sugar in them, but I think there’s a time and place for people who want that sugar.”

Grown Up Soda founder Steve Hersh said he sees the updated Nutrition Facts panel as helping to highlight the differences between his brand and mainstream sodas. Grown Up Soda averages about 90 calories per bottle, while mainstream sodas can contain upwards of 180 calories per can.

“I think we’re well positioned for the change,” Hersh said. “We’re already under the 100-calorie threshold. We fear nothing — bring it on!”

Natural Flavors Set Brands Apart

Although big CSD brands remains in decline according to recent Nielsen data, small soda brands still look a lot like they’re battling Goliath for their share of the market. But many brands have a not-so-secret weapon: natural flavors and organic ingredients.

Sipp CEO Brian Pear, who took over the position in January from founder Beth Wilson-Parentice, said the brand’s organic sodas, which feature three ingredients blended to enhance each individual flavor, gives it an advantage over staid competitors. The recipes are paying off for Sipp, which will be expanding into the convenience store channel and deeper into food service this year.

“Sipp’s unique in that yes it has three flavors, but you can actually taste all three layers,” Pear said.” That truly is what sets Sipp apart when you are considering conventional consumption.”

Juice company Wild Poppy also featured a line of organic sodas at the Fancy Food Show The line comes in orange, grape, and lemon flavors, all made from real juice. CEO George Bryson said limited ingredients and use of cane sugar as a sweetener help to set the new products apart from sodas formulated with corn syrup. Commenting on the FDA label change, Bryson hoped it will give the brand’s sodasa chance to show off their organic credentials.

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Along the same lines, Bruce Cost Ginger Ale marketing manager Kevin Li said the brand’s use of real ginger provides a healthier, better-for-you soda than any of the major ginger ale brands.

“Canada Dry is all chemical, you can’t find ginger at all,” Li said. “We use the most traditional way to make a ginger ale.”

Soda, Mixer, or Both?

Premium mixers are always a fine addition to any liquor cabinet, but when you’re making drinks on the fly who doesn’t reach for a can of Coca-Cola to go with their whiskey, or splash some gin in their Sprite? Sodas are natural mixers and one clear takeaway from the specialty food conventions is the blurring lines between the categories.

Several companies, such as Fentiman’s and Grown Up Soda, made new mixer lines the focus of their booths at the show, with their classic soda lines taking the backseat. According to Hersh, mixers have a strong appeal to millennials, especially students, who have a “grab and go mentality.”

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Q Drinks, which had positioned many of its products as sodas and mixers, has has fully embraced the latter. Although many of its beverages are still drinkable on their own, brand representatives said the company struggled with its identity before deciding to re-establish itself as purely a mixer brand.

Sparkling Fruit Shrub Aims to Be ‘Kombucha Lite’

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Bridging the gap between drinking vinegars and soda at the Fancy Food Show was Tartly, which premiered its three launch flavors at the convention’s “New Products on the Shelf” pavilion. Coming in Lime Mint, Blueberry Lemon, and Ginger Pear, the innovative new beverage is getting its start at stores in the San Francisco Bay area.

CEO Diana Tran Wang described the drinks as a sort of “kombucha lite” and hopes to provide “a more interesting take on craft soda” for consumers.

“It’s sweet and tart with the appeal of soda,” Wang said. “We’re not going for no sugar added, but there is space for a better-for-you, mid-calorie drink. The space is heating up and that’s good.”