The global craft soda market size was valued at USD 635.48 million in 2022. It is estimated to reach USD 924.24 million by 2031, growing at a CAGR of 4.25% during the forecast period (2023–2031). In recent years, there has been a significant increase in the market for craft soda. People increasingly seek alternatives to traditional sodas and products with more organic ingredients and distinctive flavors. Moreover, this craft soda is particularly popular amongst the millennials and younger population, who are a significant market driver.
Craft soda denotes non-alcoholic beverages historically crafted by small, independent, and frequently artisanal or craft beverage enterprises. These beverages are usually made by hand in smaller quantities, emphasizing top-notch ingredients, distinctive flavors, and a more individualized production process.
Craft soda is typically differentiated from mass-produced sodas manufactured by prominent soft drink companies. Craft soda makers may utilize natural sweeteners, actual fruit juices, and unique flavor combinations to create beverages that stand out from mass-produced equivalents. Craft soda provides a range of distinctive and inventive flavors, including ginger, root beer, lemonade, cola, tropical fruits, and berries, to meet customers' broad and changing tastes.
The rising customer preference for natural, organic, and healthy drinks is a significant driver of the craft soda market's expansion. Consumers are more aware of the adverse health effects associated with sugary and carbonated beverages, including obesity, diabetes, tooth decay, and cardiovascular diseases. As a result, they are changing their preferences towards beverages that are prepared with natural ingredients and have reduced calorie and sugar content.
Craft soda fulfills these requirements by utilizing natural fruits, herbs, spices, and cane sugar while including fewer artificial additives and preservatives. Craft soda offers a range of health advantages, including antioxidants, vitamins, minerals, and probiotics, which can enhance users' immune systems, digestion, and metabolism. Moreover, based on a survey by Nielsen, nearly half (47%) of customers worldwide are inclined to pay extra for products containing non-GMO ingredients, highlighting a significant need for natural and healthier choices in the market.
The increasing market growth is driven by the growing appeal of craft beverages among millennials and young adults. This particular group of customers is more inclined to try new and unconventional beverages. They actively look for items that provide distinctive and genuine flavors, memorable experiences, and narratives. This particular demographic is drawn to craft soda due to its distinct flavors that diverge from popular soda brands.
Craft soda also aligns with these customers' ideals and lifestyles, embodying natural, organic, artisanal, and locally produced characteristics. Craft soda allows consumers to showcase their uniqueness and personal characteristics by offering diverse flavors and brands catering to their likes and preferences.
The high price of craft soda is a significant obstacle that impedes market expansion. Craft soda typically commands a premium price compared to conventional or mass-produced soda due to elevated production expenses. These expenses include procuring natural and organic ingredients, employing glass or metal packaging, and upholding stringent quality and safety standards.
Craft soda encounters elevated distribution and marketing expenses due to competition with well-established, prominent soda brands with broader market reach and visibility. The high price of craft soda can be a substantial disincentive for consumers, particularly those residing in low- and middle-income nations. It may restrict the market's potential and the widespread adoption of craft soda.
There has been a significant increase in the launch of novel and inventive products and flavors by major industry leaders in recent years. The craft soda market is characterized by ongoing innovation and experimentation, as manufacturers and brands aim to offer new and differentiated products that can attract and retain consumers. This is expected to generate opportunities for the market to increase its growth.
For instance, in October 2023, Jones Soda Co., a company famous for original craft soda, launched a new soda called Orange Chocolate Soda. This special edition beverage is now available at various retail stores nationwide and on the company's website, JonesSoda.com. Similarly, in May 2023, Sprecher Brewing, a craft brewer and craft soda pop maker based in Milwaukee, is launching a special edition Door County Cherry Soda. This flavored soda is created with only Montmorency cherry juice provided by Cherry De-Lite in Forestville.
| Study Period | 2019-2031 | CAGR | 4.25% |
| Historical Period | 2019-2021 | Forecast Period | 2023-2031 |
| Base Year | 2022 | Base Year Market Size | USD 635.48 Million |
| Forecast Year | 2031 | Forecast Year Market Size | USD 924.24 Million |
| Largest Market | North America | Fastest Growing Market | Europe |
North America Dominates the Global Market
Based on region, the global craft soda market is bifurcated into North America, Europe, Asia-Pacific, Latin America, and the Middle East and Africa.
North America is the most significant global craft soda market shareholder and is expected to expand substantially during the forecast period. The United States is the primary contributor to North America's largest and most advanced craft soda market. The region has a significant market demand and consumption for craft soda due to a substantial consumer base actively seeking natural, organic, and health-conscious alternatives to conventional or mass-produced soda. These consumers are ready to pay a higher price for such items. Consumers in North America exhibit a strong awareness and acceptance of craft soda. They are prepared to pay a premium for natural, pure, and genuine products. Moreover, the Craft Beverage Modernization and Tax Reform Act, enacted in the United States in 2017, has offered incentives to craft beverage makers, such as craft soda manufacturers, creating a favorable climate for innovation and enhancements in industry standards. The legislative support has fostered the utilization of natural components and the provision of clear information on product labels by the health-conscious inclinations of customers.
Additionally, the region boasts a vibrant and inventive craft soda market, with numerous manufacturers and brands like Jones Soda, Reed's, Boylan Bottling, Sprecher Brewing, and Maine Root. These companies offer various products and flavors, including ginger, root beer, lemonade, cola, tropical fruits, and berries, to cater to consumers' ever-changing preferences. These key regional players also tap into strategic initiatives like mergers and acquisitions, expansions, collaborations, etc., to enhance their regional market share. For instance, in September 2022, Jones Soda Co. secured a retail partnership with Target Café. This partnership allows Jones Soda to sell four of its most popular flavors in grab-and-go coolers nationwide at over 1,000 Target Café locations. All these factors are anticipated to drive the North American craft soda market.
Europe is projected to hold a significant portion of the market due to its strong demand and preference for natural and organic products, particularly in nations like Germany, France, and the U.K. Europe boasts a vibrant and varied cultural and historical tradition of non-alcoholic beverages, with consumers displaying a strong affinity for a wide range of flavors and types of artisanal carbonated drinks, including ginger beer, lemonade, and birch beer. Moreover, the market growth is being enhanced by the growing travel and tourism activities, the increasing appeal of craft beverages among millennials and young adults, and prominent industry participants and research institutes in the region. The region is experiencing an increase in craft soda producers, like Fentimans Ltd., Fever-Tree Ltd., and The London Essence Co., who provide inventive and high-quality offerings for enthusiasts of craft soda.
Furthermore, the prominent international key players are expanding their footprint in this region by collaborating with the local players. For instance, Jones Soda Co., the craft soda brand renowned for its odd tastes and user-created artwork, is venturing into many European countries. In 2023, the soda manufacturer located in Seattle announced a partnership with American Fizz, the leading distributor of American food and beverage items in the UK. This collaboration aims to market the soda products across England, France, and Belgium. Such factors foster the market expansion in the region.
The Asia-Pacific region is projected to experience the highest growth rate in the market. This is primarily attributed to the rapid expansion of the beverage industry, the rise of new and emerging markets like China, India, Japan, and Australia, the increasing disposable income and living standards, and the growing consumer demand for high-quality and unique beverages. Craft soda manufacturers may capitalize on this market by broadening their distribution networks, developing regionalized tastes and packaging, and intensifying their marketing and promotional endeavors. Moreover, craft soda brands, such as Hey Song in Taiwan, have garnered considerable acclaim due to their inventive flavor combinations that pander to the varied taste inclinations of Asian consumers. The beverage industry in the region is constantly changing and developing, which offers profitable prospects for craft soda manufacturers who want to enter this growing market.
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The global craft soda market is segmented by flavor, packaging, and distribution channel.
Based on flavor, the global craft soda market is divided into cola, tropical fruits, berries, and others.
The cola segment dominates the global market. Cola-flavored craft soda is a form of small-scale, handcrafted soda made with a taste profile resembling that of cola. The word "cola-flavored" generally denotes a flavor that closely resembles that of conventional colas, such as Coca-Cola or Pepsi. Cola flavors often contain sugars, carbonation, spices, and flavorings such as cinnamon, vanilla, and citrus. Cola is projected to dominate the industry due to its widespread consumer base and acceptance, as it is the most popular and traditional soda flavor.
Moreover, the key players are launching new products in this segment, which is estimated to foster market growth. For instance, in June 2023, Jones Soda Co. recently introduced two additional varieties to its Mary Jones line of cannabis-infused beverages. The delectable new offerings include MF Grape and Cola flavors infused with 10 and 100mg of THC, respectively.
Based on packaging, the global craft soda market is bifurcated into glass, cans, plastic, and others.
The glass packaging segment contributed to the largest market share. Glass packaging for craft soda involves the utilization of glass containers or bottles to encase and distribute craft soda beverages. Glass is impervious and chemically unreactive, indicating that it does not interact with the substances contained within. This process aids in maintaining the original taste of the artisanal soda, guaranteeing that consumers enjoy the drink as intended by the maker.
Glass is easily recyclable; thus, utilizing glass bottles for craft soda is in line with environmental sustainability objectives. Recycled glass can be utilized to fabricate fresh containers, hence diminishing the need for more primary resources. Glass bottles can evoke a feeling of excellence and skill, augmenting the perceived worth of craft soda. The transparency of the glass enables consumers to perceive the beverage, displaying its color and clarity visually. These factors boost the glass packaging segment's growth in the market.
Based on distribution channels, the global craft soda market is divided into on-trade and off-trade.
The on-trade sector is anticipated to dominate the market. It serves as the primary and most favored channel for distributing and consuming this beverage. The on-trade distribution of craft soda pertains to the direct sale of craft soda products to consumers at establishments where they are consumed on-site, like restaurants, cafes, bars, and other hospitality establishments. The objective of the on-trade distribution approach for craft soda is to ensure the product is accessible to customers when dining or socializing at a specific location. In addition, craft soda manufacturers may form partnerships with restaurants and bars to feature their products on the menu, thus enhancing the dining or drinking experience. This strategy enables craft soda businesses to leverage the distinct ambiance of each place and cater to consumers seeking specialized and artisanal beverage choices.
