THE BLOG
06/05/2013 09:51 am ET | Updated Aug 05, 2013

What's the Future of Soda?

Challenger soda brands, take note: there seems to be a tremor in the force of the beverage world. I'm talking, of course, about the war being waged on "big sugar" -- sugary beverages like Coke and Pepsi, namely -- by one Mr. Michael Bloomberg (that's "Mayor" to you). Sugar is the devil these days, thanks in large part to widespread campaigns against childhood obesity, the trendy farm-to-table movement and an uptick in healthy eating in general. Soda sales dropped 1.2 percent in 2012, compared with declines of 1 percent in 2011 and .5 percent in 2010. New York has been embroiled in a battle over "to tax or not to tax" for the past year, and 33 other states are giving the thumbs down to soda and its sugary counterparts. And it's not just America that's giving these beverages the boot. Since 2012, France has imposed a "fat tax" on sugary beverages as well.

Not that we should really feel that bad for Coke and Pepsi, who've done a great job of expanding their portfolios to include water (now the #1 beverage in the world), juices and energy drinks. Apparently they knew the day would come when the tide would turn against soda, and it's paying off. They seem more focused on just maintaining the audience they have for their soda brands rather than necessarily growing that audience.

This means there's an opportunity for you, challenger brand, to take advantage of the backlash and create a little niche for yourself. Innovate around where the audience is, from Gen Y- and Z-ers to helicopter parents who couldn't imagine anything as toxic as soda touching their children's lips. Here are some tips we've gleaned from the "little guys" -- many of whom seem to be doing this beverage thing right.

Show you love the planet.
Eco-friendly packaging may have backfired for a snack brand like Sun Chips, but it presents a huge opportunity for beverage makers. SodaStream, a product that forces carbon dioxide gas into water, has become a worldwide sensation with messaging that is morally and economically attractive to younger generations. Owners of SodaStream makers can eliminate dollars spent and bottles wasted while enjoying the hand-crafted experience of making their own sodas. Coke and Pepsi might consider making their bottles refillable, a la growlers, with retailers allowing customers to bring their empty bottles to the store to be refilled at taps.

Stay trendy.
If you think that fashion is temperamental, try the beverage industry. What's cool one season is suddenly passé the next, so it's important to keep abreast of what consumers want in the here and now. Remember when Snapple Ice Tea first came out? And VitaminWater? And Zico coconut water? At the moment, fizzy drinks are all the rage...even IF it was recently proven that one fizzy drink a day can raise the diabetes risk by a fifth.

Offer your product in small batches.
Small-batch beer brewing is huge; why not small-batch soda-making? Jones Soda offers 12-packs of quirky flavors like Berry Lemonade and Fufu Berry (what the what?) on its Internet site, and also allows you to design your own label for your bottles. Boylan Sodas calls itself "a full line of hand-crafted small batch sodas and mixers to please any palate." Everything about Stewart's Fountain Classics, from its name to its bottles to its logo, harkens back to a more personal time. In this age of artisanal everything, a Starbucks-style soda shop - like the old-fashioned soda fountains - seems like a brilliant idea.

Produce products the way nature intended.
Since everyone assumes that soda is the unhealthiest product known to man, it would behoove companies making more natural beverages to say how their products are made. Virgil's Root Beer brews its combination of herbs and spices naturally, rather than concocting a chemistry experiment of artificial flavorings, dyes, and additives. Hot Lips Soda's lineup changes with the seasons, based on what's locally available; to make the soda, the company takes fruit, cooks it, adds water and cane sugar then bottles it, with much of the fiber-rich pulp intact, and carbonates it.

Pack them full of good things (or, without any bad things).
These days, people want to know not only where their food came from but just what their food ATE before it arrived on their plates. So it's no surprise that people want the best, most natural ingredients packed into their beverages. Oogave, a soda that incorporates agave nectar as a sweetener, was started by a natural foods restaurant owner in Denver, and dubs itself "the purest, best-for-you soda without chemicals or GMO products." Steaz is a family of "all-natural, organic and fair tea-based beverages." Hot Lips sodas contain organic lemon juice as a preservative, rather than ascorbic or citric acid, both of which can be derived from genetically modified corn and soy.

These small guys may not be trying to be the next Coke or Pepsi, but they are doing a great job of making names for themselves in a crowded market. Utilizing one or several of these tips could help you snag a few customers from those beverage giants, and feel better about your brand in the process. Because let's face it...it's unlikely that people will ever STOP drinking soda, but they certainly are clamoring for more alternatives. The beverage options mentioned here are options that even sugar hater Mike Bloomberg can live with. Who knows - they may distract him long enough to stop hating on soda and seek out a new target - butter, perhaps?