The Craft-soda Market Proves it’s Not a One-hit Wonder

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It’s craft sodas’ time to shine on Canadian menus as premium, locally made beverages with natural ingredients nab the spotlight.

The naturally carbonated, small-batch bottled sodas can help elevate the dining experience and appeal to adventurous consumers. Some suppliers attract health-conscious customers by distilling fresh, antioxidant-rich herbs and fruit into mineral water and using natural cane sugar; and packaging them in glass bottles with funky labels to draw attention.

“Craft sodas are spotlighting bold, unique flavours, which can be added to menus to help differentiate a beverage menu from that of competitors,” says Kristin Menas, associate editor, Canada & Adult Beverage at Technomic Inc. in Chicago. And while Canada-wide research is scarce, 2013 data from Euromonitor International in London spells out a robust 40- to 50-per-cent annual growth for the segment, with similar growth expected going forward.

John McEachern is hoping the explosion of the craft-beer market, coupled with recent volume and sales declines in the mainstream pop segment, will help propel its non-alcoholic cousin to success. The former PepsiCo product-development exec saw an opportunity in the craft segment, so he launched Peak Drive Beverages in Toronto, which includes a line of craft soda. “Craft is short hand for small batch, made with [healthier] ingredients with a more interesting proposition,” says the founder and CEO. The Just Craft Soda line features real sugar and natural preservatives such as lemon juice and uses a tunnel pasteurizing process to gradually bring the temperature of the bottle up to pasteurization levels and then cools it down.

Since Tony Sabherwal, president of Toronto-based Magic Oven, began carrying the Just Craft soda line in 2015, he estimates it represents 25 per cent of the pizza chain’s soft-drink sales. Best-selling varieties include Peach-habanero, Pear-vanilla, Apple-ginger, Cherry-cinnamon and Lemon-lemongrass ($3.09 each).

At Soda Jerks, a full-service burger chain in Edmonton, craft soda is an integral part of the menu. There are 52 varieties on offer, including flavours such as chocolate maple bacon, cherry cola, butterscotch root beer and sarsaparilla ($4.75 each). “The sodas that sell the most are nostalgic, such as The Pop Shoppe,” says Lance Popke, business development leader.

But the category is not without challenges. “The margins are not as good as selling fountain pop,” says Popke, who adds that some craft sodas cost $2 to $3, compared to fountain pop, which costs the operator only 20 to 30 cents per drink. “If you start brewing your own and putting it on tap, that’s an area that we’re looking at.”

Volume 49, Number 1

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