What You Need to Know about the Craft Soda Trend

What beverages should you offer up alongside your beautifully crisped, fresh-out-of-the-oven pies? While customers used to be content with a modest selection of beer, wine and major soft drink brands, as we know too well, the beverage side of the business has become incredibly complicated.

For starters, we’re witnessing a slow march away from conventional sodas. As USA Today reported in 2017, “Soda consumption in the United States fell to a 31-year low in 2016, according to Beverage-Digest. That decline can mainly be attributed to waning demand among health-conscious consumers.”

Then there’s alcohol. At the bar, where America’s craft beer explosion has caused a huge shake up, get ready for more aftershocks. A 2018 Berenberg survey found members of Generation Z are drinking at least 20 percent less than millennials did at that age. And millennials may be slowing down too.

So what next? One product this younger demographic seems happy to guzzle down is craft soda, and recently, things have ramped up a bit. According to QY Research, in 2018, the global craft soda market was valued at $600 million and expected to reach $890 million in 2025. Notably, restaurant channels are one leading distribution channel here.

For pizza proprietors wanting to cash in, there’s a way to potentially differentiate yourself – and how much fun is it to offer your customers new tastes like, say, pineapple cream?! But there are many unknowns too. How much to invest? How to choose from the myriad of available products? Not to mention a more basic question – what is craft soda exactly?

For advice, we turned to three pizzeria owners serving up craft soda – albeit in strikingly different ways. But first, a definition.

Beyond the basics of carbonation and sweetener, there is actually no formal or legal definition of craft soda. That doesn’t mean there aren’t strong opinions though. According to manufacturer Five Star Soda, “In the craft soda world, if your sweetening agent isn’t cane sugar, you’re basically the devil.” Besides vilifying high-fructose corn syrup, makers tend to feature small-batch processing, fresh ingredients, natural flavors and to reject preservatives like sodium benzoate. (Italian sodas – which despite their name, originated in the U.S. – also fall into this beverage category.) According to marketing expert Brandon Gaille, “What matters most is that they are an alternative to both the traditional soft drink and to alcoholic beverages.”

Next, three pizzerias’ approaches to tap into the craft soda trend.

1: Quality ingredients, fresh flavors and big brand support — Oath Pizza, (multiple locations including Boston and Nantucket, Massachusetts)

At Oath Pizza, notably the nation’s first certified-humane pizzeria, marketing manager Tianna Tarquinio links craft soda to the chain’s overall brand vision. “We have all humanely raised meats and fresh food toppings, so from a menu perspective — food quality and that premium upscale style — that is really important to us and we also wanted our beverage program to match that.”

Oath serves a variety of bottled beverages plus Stubborn Soda, PepsiCo’s craft soda line, Tarquinio says. “It’s all free from artificial colors and flavors, it has real cane sugar to sweeten it and the flavors are really unique and cool.” With craft sodas, she says, the added draw is novel flavoring (Stubborn flavors include Black Cherry with Tarragon and Orange Hibiscus). “You’d think that people would lean towards the typical cola flavor…but what we’re seeing is people are gravitating towards the more unique flavors.”

A major brand like Stubborn comes with expected benefits like product consistency, supply chains and marketing support, she adds. “They’re super supportive in terms of getting us any in-store branding or things like that.”

And Oath sees a pretty good profit margin too, Tarquinio adds, charging $2 to $2.50 for a Stubborn Soda from a branded fountain, and $2 to $3 for other bottled craft products. “Everything is a slightly higher price but nothing outrageous. We’re finding that people are willing to pay a little bit of a premium for a higher quality product.”

2: Nostalgia, house-made syrups and puns — We, The Pizza, (Locations in Washington, D.C. and Arlington, Virginia)

The popular concept at We, The Pizza involves placing house-made craft sodas front and center. And according to deputy CEO Micheline Mendelsohn, about eight out of 10 customers order the products. “The idea is you walk in, you get your slice of pizza and then we put a show on for the sodas.”

The enhanced experience, says Mendelsohn, rests on some significant investments: an old-school style soda fountain, eight or so house-made syrups made fresh each morning, ingredients sourced from area farms, pun-riddled drink names (“We Heard It Through the Grape Soda”) and little flourishes. “The cherry one gets a maraschino cherry on it, our pineapple one gets a slice of pineapple. We do different things. Yes we’ve invested a lot in it because we wanted to make it a feature.”

Of house-made syrups, she stresses, “I find when you make them yourself it produces an extra flavor.” And the artisanal aspect seems to be paying off. We, The Pizza has received a shoutout in The Washington Post for hipster originality, plus this high praise from a Tasting Table reviewer: “’Don’t Forget Your Ginger Roots’ is like drinkable candy with real ginger heat that obliterates its commercial competition.”

For interested proprietors, Mendelsohn’s advice is to start small — maybe resist investing in the fancy soda fountain at first. “If people are really loving them, then you can expand.”

3: Seasonal, small-batch, chef-inspired — Frankly Pizza, Kensington, Maryland

Frank Linn, whose cozy pizza place frequently earns a spot on area “best of” lists and references to house-made soda, noticed the craft soda trend picking up in restaurants since around 2007. He long wanted to make it and now, with his own restaurant his approach is probably best described as “chef-driven,” involving simple tools (steam juicer, carbonator, small soda jerk-style tap) and a seasonal rotation of flavors. Linn might serve anything from guava, blood orange, blackberry mojito and pineapple lemongrass flavors; and says his biggest sellers are simple — vanilla cream and cherry fizz.

While craft sodas make a profit, Linn admits making them is time-consuming. Costs are also higher than for commercial products (35 to 40 cents a soda compared to mere pennies), and require chefs to do initial groundwork, like deciding on a percentage of salt-sugar-juice ratios. “Do your homework, taste everything. As for the business, make sure you’re aiming at a crowd that’s going to accept what you’re making.”

So why do this? Linn’s reasons are chef-inspired. “First of all, I’m trying to provide something unique and different as I am a chef. I believe if you have a restaurant you should make everything.” He also talks about lower sugar counts, better ingredients and intense flavor. “Literally, my wife will go and pick strawberries and I’ll steam them and make strawberry soda.”

Finally, particularly outside of the alcohol beverage category, Linn sees craft soda as the perfect accompaniment for pizza. “I think water’s too bland for pizza, you need something to stand up. Our pizza is super flavorful, it needs something vibrant. So the vibrant flavors of soda really go well with it, you know?”   

Connie Jeske Crane is a Canadian freelance writer.