Soda pop retailer hopes to duplicate craft beer's hipness

Seventh-grader Carson Brenny of Ham Lake loves his pop. He drinks about 10 sodas a week, and he's not worried about consuming too much liquid sugar.

"I'm not at all concerned about my weight," said Brenny, who is 13 years old. "I'm 5-foot-7, but I only weigh 96 pounds."

Brenny recently discovered a vast array of pops at Blue Sun Soda Shop in Spring Lake Park. Owner Mark Lazarchic opened the store in November with a stock of more than 1,100 different sodas, one of the largest collections in the United States.

"I bought two bottles of Harry Potter Butter Beer and a watermelon juice," Brenny said during a recent visit to Blue Sun with his aunt. "They're different and spectacular. Everyone should try something different."

In four months, sales have been triple Lazarchic's expectations. "I want to expand, maybe add another store, and then franchise it in two years," he said.

His success runs counter to a broader decline in soda consumption in the U.S. over the past decade. But it fits with another trendlet: the rise of local and "craft" products, from beers to chocolates and other foods. "Craft beer has been joined by craft soda," says Duane Stanford, editor of Beverage Digest.

More than 1,500 craft soda makers now tempt palates with flavor magnets such as grapefruit camomile cardamom, rhubarb strawberry, salty caramel, black cherry with tarragon, orange hibiscus and pineapple coconut nutmeg. Minnesota/Wisconsin brands such as Joia, Spring Grove Soda, Whistler, Dorothy's Isle of Pines Root Beer, North Star Craft Soda, and Wisco tempt those who want a different taste coupled with another trend, local sourcing.

Blue Sun Soda isn't the first soda specialty shop in Minnesota. Fizzy Waters in Canal Park in Duluth opened in April 2013. Nationwide, retail pop shops exist in many states. One franchise chain, Rocket Fizz, has more than 70 locations.

Bob Safford, founder of Minneapolis-based Joia All Natural Soda, said that people are experiencing flavor fatigue in traditional sodas. But he doesn't see premium soft drinks catching on in a big way until the craft soda makers can move into fountain sales. "When we go into fountain application," he said, "then the numbers start going through the roof."

Joia is actively looking into fountain sales, but quality control is more difficult when it's the restaurant employees who are mixing the syrup with water and adding the carbonation, not manufacturers. Until that happens, Joia is already one step ahead by getting its bottled products in restaurants such as Panera Bread.

"The whole fast casual restaurant movement has improved the quality of food. We helped them realize that their beverages didn't match their food," Safford said.

Craft soda has benefited from a perception by the majority of consumers that soda with natural ingredients is healthier than pop with artificial ingredients. More than a third of American consumers have tried craft sodas, according to market researcher Mintel, and its surveys show that ingredients were one of the top reasons people chose them.

Despite challenges for mature products such as Coke and Pepsi, marketers believe the category is far from losing its effervescence. Entire supermarket aisles filled with pop still attract many consumers. But consumers are paying more attention to the calories they consume, and Big Soda is now offering smaller sizes. "People still like a Pepsi, but they'd rather have 8 ounces rather than 12 or 20," said Stanford of Beverage Digest.

Big soda companies have raised prices to make up for declining demand, but the big names still cost well below the $2 to $3 per bottle for 8 to 12 ounces of craft soda. On sale, a 12-ounce can of a national brand in a multipack costs about 35 to 40 cents. Premium price is the top reason that consumers gave for not trying craft soda, according to Mintel.

Lazarchic, who charges $2.49 for most craft sodas sold in singles, hasn't encountered much price resistance. Most of his customers are so enamored of all the choices that they want to experiment with the sodas organized by sections such as apple, peach, pear, rhubarb, grape, pomegranate, citrus, lime and mango. "Most people buy two or three bottles," he said.

Asked about the sugar content of sodas, which was targeted by new dietary guidelines from the government in January, Lazarchic said he sells them one bottle at a time rather than in big packs, which discourages overconsumption. "People treat them like a dessert," he said.

Most craft sodas use cane sugar rather than high fructose corn syrup, giving them an even sweeter taste. For years, sugar purists have sought out Coca-Cola from Mexico, where it is made with cane sugar.

Craft sodas sometimes contain fewer grams of sugar than Coke or Pepsi, which have about 40 grams in a 12-ounce can.

"They're a refreshing, light dessert, not like a big old piece of chocolate cake," said Austin Ashley, founder of Wisconsin-based Wisco Pop.

In addition to the new nutritional guidelines, some cities around the country, including Minneapolis, are considering campaigns to steer kids and adults away from sugary drinks.

Carleton Johnson, a co-founder of Joia, noted that some of Joia's concoctions have less than half the sugar of national brands but with more complex flavors.

"Soda is almost a four-letter word," he said. Sometimes he wishes craft soda drinkers were more like craft beer drinkers. "They don't want to know how many calories are in their beer."

John Ewoldt • 612-673-7633