Consumer demand for local products drives craft soda industry

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The demand from consumers for locally produced products has spilled over to the beverage industry. Regional, small-distribution craft sodas produced by companies like Reed's, Jones and Virgil's can now be found in convenience stores, toy stores and restaurants almost as commonly as Coca-Cola and Pepsi.

Consumer demand for local products drives craft soda industry

Regional soda is not a new trend. Americans have enjoyed regionally crafted soft drinks since the late 1800s. Among the first American soda brands were Cheerwine, White Rock, Moxie and Boylan. Over time, the brand identities of these soft drinks have grown to become staples of their regions, which is how they have survived despite the pervasiveness of the big beverage corporations.

Today, the craft soda industry is thriving due to the recent movements towards buying local goods. Statistics reported by the United States Department of Agriculture show that from 1992 to 2007, the revenue generated by farm-to-consumer sales has grown three-fold, rising from $404 million to $1.2 billion.

"It is a growing phenomenon, somewhat like the craft beer industry," Tom Keenan, president of beverage packaging company Portland Bottling Co., noted.

Portland Bottling Co. has seen the rise of many craft soda companies in the Northwest, such as Hot Lips, Hollywood's Original Shirley Temple Soda Pop and Portland Soda Works, and Keenan predicts the trend will only continue as time goes on.

Why are consumers choosing to buy local rather than stick with the established national brands?

The demand is driven by consumers' desire for superior quality. It is believed that locally produced sodas have more time and care put into their development than those that are mass-produced. Consumers also want to support local businesses that make their communities unique.

The craft soda boom also has coincided with consumers' efforts to become more health-conscious.

"Today's consumers are more interested than ever in what they eat and where their food comes from," said Hudson Riehle, Senior Vice President of the National Restaurant Association's research and knowledge group.

Many craft soft drink producers capitalize on this trend by forgoing high fructose corn syrup and using real sugar to sweeten their beverages.

Even with the increased demand for locally crafted and health-conscious products, craft soda companies only have a tiny market share compared to mega-corporations like Coca-Cola and Pepsi Cola, which begs the question: how do they stay economically viable?

"The economic advantage is that they're able to charge a premium price," Keenan explains. "It gives them a little bit of a leg up. They don't have to get into a competition with national brands that way."

Americans have shown that they are willing to pay a premium price for locally made goods. According to the report Experience Radar 2013: Lessons from the U.S. Grocery Industry, soda buyers in the United States as a whole are willing to pay a 4 percent premium on locally produced products. This number jumps significantly when examining the younger demographics surveyed, as they will pay up to a 27 percent premium on local goods.

With the trend of artisan sodas continuing to grow, it is not hard to imagine favorites like Reed's, Jones and Virgil's lasting long into the next century.

Fuente: www.oregonlive.com
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