Premium sodas make a splash in fast casual

Premium bottled soda is splashing sweet profits across the fast-casual segment.

 

Panera Bread Co., Zaxby's, Moe's Southwest Grill, Camille's Sidewalk Café and Chipotle Mexican Grill are just a few of the many brands serving 12-ounce single-serve sodas for around $2 each.

 

There's more growth potential for the $500-million bottled soda market in fast casual than any other restaurant segment, said Ron Douglas, a foodservice broker for the White Rock Beverage. Douglas believes premium soda took off because Baby Boomers, who many believe were the inspiration for the fast-casual segment, desired the tastes of their youth. Not only is the product better, the packaging is just cool.

 

"A lot of the success with premium soda has to do with the bottles," said Douglas. "They are embossed glass bottles with fancy decorations on them."

 

In the beverage business, premium soda is part of the niche new-age beverage market, a $16.9-billion category. Seth T. Godwin, marketing manager for Jones Soda, said premium soda is something most people regard as a treat. 

 

"Premium soda was built on flavors outside of colas and diet colas. It was born from core flavors like cream soda and root beer and has grown into grape, cherry and fun originals like FuFu Berry," Godwin said. "They appeal to a market that doesn't want your everyday cola, at least not at that moment. They want something different and unique. Enter the market for premium sodas."

 

Beverage brands like Jones Soda and SoBe not only come in eye-catching containers with jazzed-up images, such brands carry a cachet similar to that granted imported beers. Plus, their unusual flavors fit the desires of those seeking something beyond Pepsi and Coke. Jones sells flavors as creative as Blackberry Cream and Banana, and as interesting as Broccoli.

 

Premium bottled soft-drinks have an additional advantage over fountain drinks: They travel well and are resealable. Dave Zambory, beverage director for Subway, told Brandweek magazine in June that because 60 percent of its business is takeout, customers kept asking for non-fountain offerings. "Offering the right brands in the right packages made all the sense in the world," Zambory said.

 

But does that mean premium sodas overtake the fountain? Not likely.

 

"Your volume business will always be in the Cokes and Pepsi," Douglas said. "It will only cost pennies to put out a 32-ounce glass from a fountain."

 

 

Hot Lips Pizza in Portland, Ore., got on the cutting edge of the supreme soda trend when it started brewing and bottling its own fruit sodas in 2005. Co-owner David Yudkin, a longtime proponent of locally grown produce, started receiving excess fruit from farmers hired to provide him other staples. At first, Yudkin didn't know what to do with the backlog of berries building up at his back door. But as he was dreaming up new ideas to generate revenue, Hot Lips-brand fruit soda came to mind.

 

Using a local organic brewery, Yudkin produced his first batches for trial at a local festival he expected would draw about 10,000 people. The soda was a hit.

 

"People went nuts for it, so we knew we had to get it in our stores," Yudkin said. "It's a money maker already, and from a marketing standpoint, it's a home run."

 

At $2.25 a pop, sales of raspberry, blueberry, blackberry and strawberry Hot Lips Soda make up 48 percent of the company's total beverage sales. Fruit flavors change with every season, and the sodas are sweetened with cane sugar, not corn syrup.

 

Jeana Edleman, Yudkin's wife and partner in the four-unit company, said Hot Lips Soda is selling in select stores and restaurants up and down the West Coast, and she sees even greater sales potential.

"What's neat is our soda is fabulous just poured over ice cream," she said. "It's also great with vodka, so upscale restaurants are serving it at their bars."