Can American Craft Sodas Save the Soft Drink Industry? - Smithsonian Magazine

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Driving through rural Georgia, past thickets of pine trees, I arrived at New Creation Soda Works, a cinderblock-walled building next to a field dotted with hay bales in the tiny town of Bishop. Inside, Paul Kooistra, 55, greeted me with a smile to his tasting room and warehouse, filled with 50-pound bags of Domino sugar and hundreds of cans of his craft-brewed soda neatly stacked on pallets.

He ushered me into the adjoining room. “We make our syrup in these kettles,” he said, pointing to gleaming silver pots sitting atop gas burners. “We transfer it to the tanks over there. Then we add purified water, then we chill and force carbonate them.” He opened up the door to the outside to show me a giant tank holding 2,000 pounds of carbon dioxide.

Eight years into business, New Creation makes five flavors of soda: its best-seller Root 42 (a root beer), butter pecan cream soda, strawberry and habanero, and banana cream, made especially for the Savannah Bananas, a gonzo baseball team with pitchers on stilts and breakdancing coaches. The labels on the cans exude the same Southern charm as Kooistra does. Krumkake, the butter pecan soda, features a hand-drawn squirrel atop the words “Made in GA by a couple of nuts.”

New Creation Soda Works banana cream soda — New Creation made a banana cream soda especially for the Savannah Bananas, a gonzo baseball team with pitchers on stilts and breakdancing coaches. Eric Schatzberg

After the tour, it was time to try the soda. I sat next to Kooistra in the soda taproom the company opens on Saturdays from 11 a.m. to 2 p.m., serving root beer floats with local ice cream. As he stood in front of a chalkboard menu, he jerked one of the 12 taps, and the caramel-hued root beer poured out into a small glass for me. It was some of the best root beer I’ve ever tasted: silky and vanilla-forward. The strawberry habanero tasted like an exotic dessert. The banana cream wasn’t available on tap, so he let me take a can home; it was delicious, like a banana cream pie distilled into liquid form.

For months, Kooistra has been perfecting peach soda, made from Pearson Farms Georgia peaches. He drops 720 pounds of peaches in a tank, boils them down to juice and strains it. Then he adds citric acid and water. New Creation plans to roll out the new flavor before the Fourth of July.

In the beginning, Kooistra, his wife and their three teenage daughters would load up their Ford Expedition with ingredients and a five-gallon keg, and drive to the Redeemer Presbyterian Church in downtown Athens to use its commercial kitchen on Monday nights. They’d drive around delivering their craft sodas to customers throughout Athens, including Heirloom Café and Creature Comforts Brewing. Now, the company makes about 15,000 cans each week to be sold at Ingles and Publix supermarkets in the South and 700 independent stores across the country.

New Creation Soda Works taproom — New Creation Soda Works opens its taproom on Saturdays from 11 a.m. to 2 p.m. Eric Schatzberg

Kooistra doesn’t pretend his soda is healthy. He calls it a sweet treat. (His butter pecan soda has more sugar than a regular Coke.) But if you’re going to drink soda, he argues, at least drink something with real ingredients: cane sugar instead of high-fructose corn syrup; real peaches and strawberries instead of artificial flavoring and Red Dye 40.

Soda has a bad rap: It’s blamed for obesity, diabetes and tooth decay. Yet, in an era of keto diets and intermittent fasting, the maligned “junk” food is being resurrected as an artisanal treat. Craft soda, usually defined as small-batch soda made with natural sweeteners, has managed to skirt the unhealthy reputation: It’s viewed as part of the local-food movement. Companies are imitating the craft beer movement with complex flavor profiles and regional ingredients. According to a 2023 IBISWorld market report, amid the declining soda market, craft sodas are a beacon—one of the few sectors of the $42.4 billion U.S. industry that appears to be growing. Worldwide, the craft soda market is forecast to grow from $587.75 million in 2020 to $855.22 million in 2028, according to research firm Fior Markets.

In the 19th century, when soda first became popular in the United States, all sodas were craft sodas, says Tristan Donovan, author of Fizz: How Soda Shook Up The World. As cities passed prohibition laws in the 1920s, soda fountains sprung up, operating much like coffee shops today. “Sodas would be made on the spot,” says Donovan. “So they’ll have the carbonated water, and you’ll go, ‘I want some sarsaparilla or cucumber in that.’”

Soda was considered health food. People learned how to carbonate water, Donovan explains, “because they thought it could cure scurvy and all kinds of things.” In the 19th century, soda manufacturers were full of health claims. “They didn’t claim it makes you immortal,” he says. But they claimed “pretty much anything else, from alleviating depression to protecting against cancer.” Without the Food and Drug Administration, there wasn’t any regulation.

Coca-Cola factory in 1940s — A woman inspects bottles of Coca-Cola brand soda on a conveyor belt as they pass before a bright light in a Cincinnati, Ohio factory in the 1940s. Cincinnati Museum Center/Getty Images

During the 1880s, sodas became mass produced, in part because bottles no longer had to be made by hand. “Coca-Cola, Dr Pepper and Moxie all went into production,” Donovan says. Bottle-making machines that used compressed air and molds were developed, alongside yet another key innovation: “The invention of the bottle cap in the 1890s was the turning point,” says Donovan. “It provided an airtight seal. Then came the Crown soda machine at the end of that decade that sped up the production of bottled soda.”

Mass production was a selling point. “Th[is] was a period where people liked standardization. It was quite novel. It’s like [you] could go anywhere in the world and pick up a Coke and it’s the same Coke in Cairo as in Atlanta,” Donovan says.

Like their bespoke predecessors, these mass-produced sodas were also sold as elixirs. “Pretty much all of the [sodas] in the 1880s claimed some sort of health benefit,” Donovan says. “Coca-Cola was largely founded on what was then seen as the healthy, energizing effects of kola nuts and cocaine.” Pepsi, invented in 1893 as Brad’s Drink, was a few years later given a new name derived from pepsin, a digestive enzyme, Donovan says. Sodas really took off during Prohibition, with new brands popping up, including 7Up in 1929. 7Up was also sold as a health drink due to its added lithium, Donovan says, which stayed in its recipe for nearly two decades.

In 1942, the American Medical Association recommended people limit the amount of sugary drinks they consumed, but the concern over soda causing obesity didn’t really emerge until the 1980s and 1990s, when companies like Coca-Cola switched out sugar with high-fructose corn syrup. “The ingredients in the sodas didn’t change radically,” Donovan says. “The reality was soda was never healthy … but our understanding of health improved massively. In 1860, people still thought cocaine was healthy. In the 1950s, people looked at sugary drinks as a source of energy. Soda turned from a pseudo-health drink to a temperance drink to a recreational drink.”

When craft sodas started making a comeback a couple decades ago, some of the first companies sweetened their sodas with cane sugar instead of corn syrup, created more sophisticated flavors and cut down on the quantity of sugar. GuS (short for Grown-Up Soda), founded in 2003, has about half the sugar of a Coca-Cola (around 22 grams per 12 ounces) and comes in a various flavors including Meyer lemon and cranberry lime. Seattle-based Dry Soda, established in 2005, has even less sugar (around 16 grams per 12 ounces) and comes in lavender and Fuji apple, among other flavors. Century-old craft sodas started to become popular again, including Boylan, which expanded its distribution nationwide in 2012 for its classic sodas like root beer, ginger ale and creme soda.

Olipop flavors — Olipop, founded in 2017, promotes a healthy gut biome. Olipop

A few years later, a subset of craft sodas started touting specific health benefits. Olipop, founded in 2017, promotes a healthy gut biome, and Poppi, founded in 2016, claims its sodas can help you lose weight, improve your skin and even “naturally detoxify.”

Olipop’s slogan is “A New Kind of Soda.” Unlike Coca-Cola, which contains 39 grams of sugar per 12 oz can, Olipop contains 2 to 4 grams. Olipop sodas are filled with prebiotics and have up to nine grams of fiber, from chicory root, Jerusalem artichoke, nopal cactus and cassava root. The brand leans into the functionality of its sodas, marketing them for gut health and partnering with researchers at the University of Minnesota, Purdue University and Baylor College of Medicine. Some scientists, however, are skeptical of these health claims, saying that there isn’t enough research to support that the fiber sources used in Olipop improve gut health. At high doses, they could also cause inflammation.

Olipop co-founder Ben Goodwin’s childhood relationship with soda influenced his decision to start the company. “I grew up fairly poor and [drinking] plenty of soda,” he says. “And I grew up fairly overweight and anxious.” As a teenager, he had an “epiphany” that he needed to eat more nutritiously. “And that started a lifelong journey for me,” he says.

Before starting Olipop, Goodwin helped a friend found a kombucha company. “During that whole process, I learned about the microbiome,” he says. Goodwin was frustrated that most of the products targeting gut health catered to high-end consumers. Soda is a “Trojan horse” to bring healthy products to consumers, he argues. “Soda has a very deep foothold in the American subconscious,” Goodwin says. “Most of us grew up building attachment memories with loved ones, with a soda in hand.”

Goodwin is trying to reach Coca-Cola and Pepsi enthusiasts and offer them a healthier product. That’s why he carries dupes like Vintage Cola, Doctor Goodwin and Lemon Lime. But some of his flavors are originals. “I’m always looking for what can strike an interesting nostalgic chord with our customers,” he says. “The Strawberry Vanilla is roughly modeled after the Strawberry Creme Savers that I used to eat.”

I tried the flavor, and it was a refreshing berry soda with a stevia aftertaste.

Given its nine grams of fiber, Olipop can cause gastrointestinal issues. “Some people may feel bloated and gassy and may experience abdominal pain,” Olipop’s website reads. “These symptoms should go away once the body gets used to the changes in your gut.” On TikTok, one woman described her experience of having to leave a Pilates class because of excessive flatulence she claimed was caused by Olipop.

At $2.49 a can, Olipop is more expensive than traditional sodas, making it cost prohibitive for some of the low-income consumers he plans to reach. But Goodwin claims that’s not a problem for the business, Goodwin says, because “Soda is actually the second most price-inelastic beverage,” meaning that consumers’ buying habits remain the same even when prices increase.

Olipop is sold at 22,000 locations across the country, including Walmart, Target and Whole Foods, with the company bringing in over $100 million each year. It has even enlisted pop star Camila Cabello as a celebrity sponsor.

“That’s the future of soda,” says Aaron Manahan, who has tried over 700 sodas for his website and YouTube channel, The Soda Jerk. He’s quaffed everything from seafood ramen soda from Japan to caramel apple soda from Texas. “I will be very surprised if Poppi and Olipop aren’t purchased by Coke or Pepsi at some point in the next two years,” he says.

Manahan says trying new sodas is a cheap way to open your mind to new experiences. He hopes those who watch his videos feel the same way.

A 41-year-old dad who works for Disney, Manahan started his site on a whim. He was at his friend’s house for a weekly anime and pizza night in 2008 when they decided to try a pricey four-pack of Virgil’s root beer. “It was the best root beer I ever had to date,” Manahan says. “I thought to myself, if this is out here and I didn’t want to try it, what else are people not trying?” His friend suggested they start a soda review site, and 1,065 reviews later, it’s still going.

In one of Manahan’s most entertaining reviews, he bounds by box elder trees as he clutches a clear glass bottle full of neon green liquid. “Instead of touching grass, I’m going to do one thing better,” he says. “I’m going to drink grass: Grass Soda, mowed and bottled in the USA.” He places the bottle to his nose and sniffs it as if it’s a prized Pinot Grigio. “It smells like a swimming pool with chlorine in it,” he says. He takes a swig. “I think I could finish this bottle.”

Recently he tried fried potato ramune soda from Japan. It smelled like the bottom of an empty McDonald’s bag and tasted like “carbonated Crisco,” he says. “I think it was one of the worst soda’s I’ve ever had.” Jones Key Lime Soda, on the other hand, was sublime. “You could taste the graham cracker crust and meringue,” he says.

Manahan has seen a change in the market recently brought on by craft soda makers. “If smaller brands weren’t making headway in the soda market, I don’t know that you’d see Coke doing their Creations line or a new Mountain Dew flavor every 17 seconds,” he says. Creations features limited-edition Cokes like the “space-flavored” Starlight, designed more for vibes than for taste. Mountain Dew’s recent concoctions are more flavor-focused, including Summer Freeze—formulated to taste like a cherry, lemon and raspberry ice pop—and Baja Passionfruit Punch.

Twenty-three years ago, when John F. Nese started hawking sodas in Highland Park, California, near Los Angeles, “craft soda” wasn’t even in the public’s vocabulary. Nese hadn’t dreamt of creating a soda store, but he was facing a dilemma. He was working at his father’s store, Galco’s Grocery, and food and beverage distributors, newly purchased by chain stores, had jacked up prices for customers like himself who weren’t buying in massive quantities. Nese had an idea: specialize and only sell rare and regional soda. His father shook his head and walked away, but his daughter supported the store’s new direction. She wrote a letter to Huell Howser, who hosted the PBS show “Visiting With Huell Howser,” about unique places in Southern California, telling him about her dad. Howser invited him on the show, and the episode was a hit. Within days, Nese’s entire inventory sold out.

Business remains strong for Nese. His store survived the Covid-19 pandemic without having to take out any small-business loans.

Galco’s Soda Pop Stop has two criteria for its products: The soda has to be in a glass bottle, and it has to contain cane sugar. Glass bottles don’t impart any taste to the soda, like aluminum cans do, Nese says. Cane sugar makes soda taste “crisp” and “clean.” Of the sodas he carries, 80 to 90 percent are made in the U.S., with hard-to-find classics like Moxie and Cheerwine alongside oddities like wasabi soda and Salem Sister’s Bad Apple Soda. One of his offerings, Blenheim Ginger Ale from South Carolina, is so spicy that Nese suggests that you should “invite your enemies over” to drink it.

At Manhattan Café in Athens, Georgia, Blenheim Ginger Ale has been the backbone of owner Joey Tatum’s signature drink: a bourbon and Blenheim. “It was my most popular drink and has been for pretty much the life of the bar,” says the owner of the 60-something-year-old dive bar, where members of R.E.M. famously stop when they’re in their hometown. The ginger ale was key. “It was the spiciest ginger ale you’ve ever had,” he says.

But in 2018, Tatum’s distributor was unable to regularly source the ginger ale. “Seven or eight years ago there was something weird with its distribution,” he told me as I sat next to him on a cushioned swivel stool. “It was hard to find.” So the resourceful bar owner decided to make it himself. He chopped up ginger and added it to soda. He even threw in some cayenne. “[It] was kind of cloudy and weird-looking, but once you put it in a glass with ice, it didn’t look so bad,” he says. “Taste wise, I think [it was similar].”

Tatum’s customers thought so too. “I took my homebrew and mailed it to a company in Louisville that develops drinks,” he says. The company sent back syrup samples, and Tatum responded with notes; they went back and forth this way until they hit on a spicy enough formula.

He struggled to then find a company to bottle his new soda in small batches. “I had to go all the way to Missouri to a winery,” he says. Tatum named the soda Ginger’s Bunkhouse, after his then 10-year-old daughter Ginger. Her twin, Neely, wasn’t happy. He considered making her a namesake soda, “Neely’s Not as Hot,” but he hasn’t yet.

The bar owner ordered 500 cases to be safe, unsure if the soda would sell. But it did, and he started ordering more and more cases. “I began selling it myself out of the back of my car,” he says. “Now, it’s with a distributor.” His ginger ale was even a finalist in the 2018 Flavor of Georgia contest, an annual competition organized by the University of Georgia’s College of Agricultural and Environmental Sciences.

I asked what Neely and Ginger thought of the soda. “They like Celsius better,” he says.

If Kooistra and New Creation’s success is any indication, Tatum’s ginger ale is just beginning its ascent. “The craft soda industry is 1 to 2 percent of overall [soda] sales, but 20 years ago that’s where craft beer was. Now, they are 15 percent,” Kooistra said.

The craft soda market is also taking a cue from craft beer flavor-wise. Craft soda “is trying to be a bit more upmarket, a bit more refined,” Donovan says. “They have to be more adult in how they look and how they taste. I mean, no one’s going to go around buying premium craft soda for the 8-year-old.”

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Can American Craft Sodas Save the Soft Drink Industry? - Smithsonian Magazine

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