Good things come in small batches

As the mother of two now-teenaged boys, Jennifer martin was always annoyed at the number of overly sweet beverages at the supermarket.

“I just thought, There are billions of beverages in the world, but not enough of the right kind of beverages,” she says.

So Martin, a food scientist, decided to do something about it.

In 2011, she opened Vancouver-based SIP Soda, with a focus on “simple, infused pairings of botanicals and fruit.”

SIP makes three varieties of natural, craft sodas: Lavender Lemon Peel, Coriander Orange and Rosemary Lime. The products are made with sparkling spring water and sweetened with natural cane sugar.

SIP is part of Canada’s burgeoning craft soda industry, which is taking the beverage world by storm.

READ: As soda sales fall, Coke’s profit slips

Research firm Euromonitor doesn’t track sales of craft sodas in Canada, but says a number of craft soda makers have averaged a robust 40% to 50% annual growth in recent years, with similar growth expected going forward.

What’s driving the trend?

Phillips craft soda is the top- selling beverage in the entire pop category. The sodas have prime real estate in the pop aisle: they’re featured in floor displays, rather than on the shelf. Signage indicates the products are homegrown.

“The West Coast is extremely strong on ‘local,’ ” says Barbot. “These are good-quality sodas without artificial colours or flavours, but people go for them because they’re local.”

Canmore, Alta.-based The Grizzly Paw Brewing Company first started making craft sodas in 2005. It now has six flavours available in bottles: Cream Soda, Orange Cream Soda, Black Cherry Cola, Ginger Beer, Root Beer and Grapefruit, as well as Bitter Lemon, which is only available on tap at the Grizzly Paw pub.

“More people are switching over to craft soda,” says Kristina Cardinale, sales and marketing coordinator at The Grizzly Paw. Our products are gluten-free, soy free and vegan friendly, which can’t be said for a lot of pops.”

READ: Next emerging soda segment: the mid-calorie soda

Euromonitor notes while craft soda is growing, it faces real obstacles. Resources for marketing and distribution fall far behind those of big pop brands. In addition, going mainstream may undermine the marketing message of being a small, handcrafted product.

SIP’s Martin says the biggest challenge is that craft products must be produced on a small scale, which limits growth opportunities.

“We can’t really get too big on our production and still be able to offer an all-natural, no-preservative, homemade- style product,” she says.

But she thinks the outlook for the craft-soda segment is positive. “I always say to people, ‘Small is the new big.’”

Health-conscious consumers are looking for alternatives to super-sweet or artificially sweetened pop, and they’re increasingly interested in buying from local companies.

READ: Stevia, soda pop and that aftertaste

“Consumers want authenticity,” says Martin. “They want to know where the product is from and how it’s made. The local movement is driving our success, for sure.”

Those same consumer trends are driving sales of craft beer, as breweries emphasize high quality ingredients and their local roots.

So, it’s no surprise craft breweries are branching out to natural sodas. Victoria-based Phillips Brewing Company, for example, launched Phillips Soda Works, in 2012, with Sparkmouth Ginger Soda and Intergalatic Root Beer.

The brewery was playing around with the formulas for alcoholic ginger and root beers.

“We realized at the end that we really enjoyed the flavours and we had learned a whole lot about it and had done everything but make a soda out of it,” says founder, Matt Phillips. “So we set down that road.”

Phillips’ craft soda is mainly sold in cafés and boutique grocers in B.C. One such grocer is Mother Nature’s Market & Deli in Victoria. Huguette Barbot, director of operations, says