Tastes are changing, says Klaus, which explains why the carbonated soft drinks category is in such a funk right now.
Consumers still love bubbles, Klaus told FoodNavigator-USA, but until relatively recently, carbonated soft drink makers haven’t delivered the sophistication or culinary-inspired innovation on offer in the still beverages aisle, and shoppers have become bored.
Four ingredients: Purified carbonated water; cane sugar; natural flavor from fruits, flowers, or herbs; phosphoric or malic acid
Back in 2005, when she first came up with the DRY Soda concept, there was a clear gap in the market for a carbonated product that was less sweet, and far more interesting from a flavor perspective, said Klaus.
"I don't have a background in the food or beverage industry. I'm a mother of four, and a real foodie. I knew I shouldn't be drinking wine through all my pregnancies, and I wanted a carbonated soft drink that was really nicely flavored, not sugar-flavored, something a bit more sophisticated, and there just wasn't anything out there.
"I saw a unique opportunity and I took it."
Initially, the target market for her fruit, herbs and botanical-inspired ‘dry’ (less sweet) soda was high-end restaurants - which wanted more inspiring, premium, non-alcoholic options to offer diners, she said.
DRY Soda contains just four ingredients: Purified carbonated water; cane sugar; natural flavor extracted from fruits, flowers, or herbs; and phosphoric or malic acid. The first four flavors were Rhubarb, Lavender, Lemongrass and Kumquat, followed by Blood Orange, Juniper Berry, Vanilla Bean, Cucumber, and Wild Lime.
Once you bring the sugar down you can really start to taste the flavors
Each 12oz. glass bottle or can contains 45-70 calories and is sweetened with 11-19g of cane sugar, between a quarter and half of the sugar in leading soda brands (12oz of Coca-Cola has 39g, Mountain Dew has 46g, Sprite has 38g) and no accompanying high intensity sweetener, said Klaus.
“People always ask how can you get down to that level of sugar without adding a high intensity sweetener, but once you bring the sugar down you can really start to taste the flavors, instead of the sweeteners. If you put stevia in there, all you can taste is stevia, and it's very bitter.”
The products were a big hit in the restaurant trade, but it soon became clear that the retail market presented a far bigger opportunity, said Klaus, who steadily gained listings in the natural and specialty retail channel via distributors including KeHE and Nature’s Best in the years that followed as well as full-service DSD (direct store delivery) distribution in several markets.
“The challenge isn’t getting on the shelf, it’s staying there,” said Klaus.
“Retailers want to try new things, especially in the carbonated soft drinks aisle, where there really hasn’t been much innovation, but you have to have the velocity to stay there and they don't give you long to prove yourself.”
We’re nationwide with Kroger and Safeway
However, the big breakthrough came last summer when she added four more flavors – Apple, Ginger, Pear, and Cherry, developed by Chef Richard Blais, DRY’s creative director - and put her sodas into slim aluminum cans, and sales exploded.
“We were a bit worried that it might just cannibalize sales of the bottled product, but it’s been incremental. It’s been a really exciting launch and we’re now nationwide with Kroger, we're going nationwide with Safeway, and we're in several Whole Foods regions. We're also in Canada.
“We had triple digit growth last in 2013 vs 2012 and I’m forecasting that again this year. There really isn’t anything else like it on the market.”
The only frustration is that as most retailers will typically stock four or five skus, shoppers don’t get to see the full range of flavors, she said. However, being able to sell the products online via Amazon enables fans to access a broader range, she added.
"You're not going to get a [bricks and mortar] retailer selling 11 different flavors, so being able to offer them all online is great."
There really isn’t anything else like it on the market
When you don’t have the money to spend millions on marketing, you also have to be much more creative about using the internet and social media to engage with consumers, she said.
“We recently launched a ginger variety because so many people were telling us on social media that they wanted it. I’m actually not a big fan of ginger, but we developed a product and it has been really successful for us.”
The great thing about being a minnow in a shark pool is that you can move quickly, she added.
“We can listen to consumers and respond fast. A small company like mine can turn things around and get them out of the door in six months."