Pepsi jumps on craft craze as it launches ‘1893’

With Pepsi becoming the first major soft drinks manufacturer to launch a craft product to “honour its heritage”, it seems soft drink brands are keen to copy the alcohol industry. But increased awareness is needed if it is to revive flagging sales.

This week, Pepsi announced it is launching ‘1893’ – a craft version of its traditional cola product – in the US. Described by the brand as “a blend of premium cola nut extract, real sugar and sparkling water”, it will be available in original and ginger cola flavour. The 1893 drink will debut a US TV spot in April.

Besides being drunk as a standalone beverage, the brand also hopes it will be used to complement cocktails. According to Chad Stubbs, vice president of marketing at Pepsi, it was inspired by increased consumer interest in craft, as well as its heritage.

“We were energised by the food revolution, and inspired by consumer interest in bold and interesting taste combinations. We were also motivated by our past, so we created these unique 1893 taste experiences to honour the passion of our founder, Caleb Bradham,” he explains.

Taking a leaf out of the brewers’ book

Pepsi is the first major soft drinks manufacturer to launch a craft product, but it certainly isn’t the first global brand to jump on the craze. The alcohol market has been aware of the popularity of craft with consumers for years, as they increasingly seek to move away from big brands in favour of independent brewers that proud themselves on using small-scale and innovative brewing methods.

For example, Diageo’s Guinness launched the Brewers Project last year in a bid to create more craft beer variants. Meanwhile, in December AB InBev bought Camden Town Brewery – leading to outrage among the craft community.

READ MORE: Craft beer brands risk a ‘clash of cultures’ as major brewers look to cash in

Andy Taylor, executive creative director at creative agency Iris, believes it is “no great surprise” soft drinks brands are copying alcohol manufacturers. “If anything, I wonder why no one has done this earlier? When you look at the success of craft beers, they are taking over by storm,” he says.

Pepsi has created craft variants – such as Stubborn Soda and Pepsi Throwback – in the past, but this is the first time a product has been marketed as such. Taylor believes Pepsi’s focus on different blends makes it a clear push for the adult market.

He says: “It makes sense, people are striving for authentic products, and want something special. There’s also a large movement of people drinking less alcohol and moving on to adult soft drinks.”

Tapping into health concerns

The soft drinks market is also facing a battle for sales amid the current health agenda. Brands have struggled due to negative media attention surrounding artificial ingredients, sweeteners, sugar content, and links to obesity and diabetes.

While Mintel figures show that the overall market value has increased 6.9% over the five years to 2015, volume growth decreased 1.3%. This could make a similar move to craft by UK brands a clever move.

READ MORE: Soft drink brands suffer blow as government pledges sugar tax for 2018

Consumer attitudes towards carbonated soft drinks are also increasingly health focused, says Mintel. Just under half (46%) of adults view low sugar content as being more important than the brand when it comes to soft drinks. Drinks with natural ingredients are perceived as healthier alternatives to drinks with artificial ingredients, which is something that Pepsi also seeks to play on with its 1893 beverage.

“It’s unclear whether they’ve actually changed the sugar content, but Pepsi’s decision to highlight the fact that it’s blended suggests it’s healthier as it’s rooted in natural ingredients.”

Andy Taylor, executive creative director, Iris

Advantages and challenges

The main advantage of the product launch is that it gives consumers the feeling that natural ingredients are part and parcel of the brand heritage, says Jenny Zegler, global food and drink analyst at Mintel.

“Pepsi’s release of 1893 showcases that the company has a long history that gives the releases authentic links to the natural segment, rather than a large company just trying to fit in with trends like natural and craft,” she explains.

While craft might seem like a good way to get the health-conscious and curious on board, however, more awareness is needed. Mintel cites the top reasons for craft soft drinks disinterest as unfamiliarity and its premium price, with 100% of US consumers who are not aware of craft fizzy drinks unprepared to try one. More than half of US consumers (55%) agree natural and craft soft drink offerings are too expensive to purchase regularly.

But even though most brands are unable to play the heritage card, it is expected that more UK soft drink brands will go down the blended and craft route.

“Exploring more interesting recipes and blends of ingredients is on trend. I can even imagine Tango doing a craft tango – it works in a serious and ironic way,” predicts Taylor.

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