First Drop Soda’s Survivors

Soda Bubble

Well, I guess the recent sale of Jones Soda to a Canadian

rollup ought to close the book on the whole craft soda thing, right? It’s all Coke and Pepsi from here on in, I think.

Or, maybe not?

In fact, closing the book on a publicly-traded Jones Soda may have simply served to end the prelude to a new age of CSD, with a variety of functional, natural, craft, and design-forward brands approaching the category with increasing relevance.

Let’s look at some of the players, while also thinking about the challenges.

At the front of the pack, we’re seeing energetic brands that are combining the functional aura of gut health with the classic fl avors cola or fruit CSDs. Top seller Olipop has mixed throwback fl avors (Cherry Vanilla, Root Beer, Orange Cream) with very low sugar and plant-based fi ber sources like inulin and chicory to create a low-calorie, prebiotically enhanced alternative to Coke, Pepsi, or Dr Pepper. Poppi goes lower calorie, higherdesign, with more fruit-forward fl avors and a functional ingredient set that includes apple cider vinegar and fruit juice; Culture Pop is also riding the gut health train, adding probiotics and marrying herbs and spices to its fruit fl avors (i.e. Orange Mango with Chili & Lime, or Lemon Lime & Cardamom).

Between Tom First (Culture Pop), Rohan Oza, Chris Hall and Jeff Rubenstein (Poppi), and Ben Goodwin and David Lester (Olipop), all of these brands have beverage veterans on board as investors, founders, or operators; are well-funded; and seem to top out at about a 40 calorie ceiling – less than 1/3 of a Coke or Pepsi.

These brands have arrived at the same time as a recent realization by legacy kombucha brands that there’s a way to distill their core gut health message into a less intimidating soda profi le. Live Soda tried this more than a decade ago, but now brands like Humm, with its Probiotic Soda, and Health Ade, with its Health Pop, are also on the shelves. It’s hard to look at the fast branding transition for that last one – from “Health-Ade Booch Pop” to “Health Pop” in short order – and not see what suppliers think consumers want.

They aren’t the only ones chasing the magic mix of gut health, bubbles and mainstream appeal: Mayawell and Wildwonder are a couple of other independent brands that push these forward with strong design, while healthy beverage companies Rebbl and Suja also have their own carbonated probiotics out on the market.

One question for the brands in the category: who will be the fi rst to go zero-sugar, or is their precious balance between sugar and other sweeteners the key to maintaining their lively fl avor? Consumers will likely adjudicate that one.

Over at Tractor Beverage Co., an organic, gourmet soda and beverage line that’s taking a full-calorie, full fl avor approach (about 120 per 12 oz.) and following a foodservice route, calories aren’t a big concern. The Washington-based brand pulled in a $60 million investment round -- including soda giant Keurig Dr Pepper – to continue to shake up the fountain at restaurants around the country. With revenue expected to hit $70 million this year, according to the company, and placement in a network of high-visibility accounts (think Umami Burger, Jose Andres’ restaurants, Pokeworks, and more), they’re fl ashing a homespun alternative for foodservice.

Tractor’s strategy calls to mind long standing high-end brand Boylan’s, which also aimed to break the grip of big cola by blazing a path through upper-middle-class foodservice outlets. New York-based carbonated stalwart Grown up Soda (GuS) pioneered the tactic through a swath of Zagat-certifi ed eateries more than a decade ago, but neither GuS nor Boylan’s were able to ink a deal with the potential reach of a KDP. Tractor’s in just one channel, of course, but food service has kept the big brands well-fed for decades.

Also traditional – and using caffeine – is New Wave, founded by old beverage hand Nat Noone. New Wave is trying to thread the needle between classic soda quality and lower calories; after launching with a set of low calorie (15-25) fruit fl avored sodas, New Wave has recently edged into traditional cola, pepper, and ginger ale varieties that raise the roof a little higher (10 g of sugar vs. 2-6 g in the fruit). Again, there are big partners on board – Noone has AB InBev incubator ZX Beverages on his cap table – alongside the throwback vibe. United Sodas of America is another brand that uses high-quality “unboxing” design and a lighter calorie profi le. Dropping calories all the way to zero, there are brands like stevia pioneer Zevia, which has a devoted following across its product portfolio, and even monkfruitsweetened Madvine.

How does one evaluate the chances of any of these brands to break the toehold that the Red and Blue systems have in CSD? One doesn’t, actually. The competition isn’t just from soda – it’s also from sparkling waters, non-alcoholic cocktails and the kombuchas that helped inspire this particular wave, as well as the bottled waters, sports drinks, and energy drinks that have eaten at soda’s share of the stomach.

But just as the fractured fi eld has big sodas contemplating how they fi t into a beverage future where they aren’t ubiquitous, it has the little guys hitting the gaps through D2C and retail selectivity, as well as audience cultivation. They might not all make it to the convenience store cooler or sponsor the NFL. But in a time where loyalties come in pockets, not hordes, there’s reason to imagine that giving the people what they want might be a better solution than only offering what the big guys have to sell.