PepsiCo Is Launching a Line of Craft Fountain Sodas Called ‘Stubborn Soda’

Pepsi is going hipster by introducing this line of all-natural, cane sugar-sweetened sodas that will hit stores this summer

Pepsi’s new line of sodas is meant to appeal to a nutrition-conscious audience as soda consumption slows down nationwide.

After the success of its craft soda launches for Caleb’s Kola and Mountain Dew’s Dew Shine, PepsiCo is dipping into the craft soda business once again. As an appeal to health-conscious customers, and perhaps in reaction to the craft beer boom, Pepsi will be releasing Stubborn Soda, sweetened with raw cane sugar and natural flavors, as early as this summer.The line of small-batch sodas sold only “on tap” (soda fountains) will include unique flavors like black cherry with tarragon, orange hibiscus, pineapple cream, and agave vanilla cream, according to The Associated Press.

The beverage market is starting to change as cities attempt to tax soft drinks. Soda companies are scrambling to introduce “natural” beverages that don’t contain high fructose corn syrup, like Coca-Cola Life and Pepsi True, which are sweetened with raw cane sugar and Stevia.

“Stubborn Soda is in an incubation phase,” says Gina Anderson, a PepsiCo representative. “It's very new, they're still learning from it and reaching out.”

Pepsico Inc Introduces New "Craft" Soda, but Is There Really Such a Thing?

PepsiCo isnationally launching its so-called "craft" soda brand Stubborn, but what does that really mean? Image source: PepsiCo.

People have a pretty good idea of what craft beer is supposed to be, but does anyone really know what "craft soda" is? As PepsiCo (NYSE: PEP) takes its newest line of Stubborn "craft soda" national, it might be a good time to ask exactly "craft soda" should be defined as.

Pepsi to Launch Craft Soda

Wow. This craft beer boom train is getting full. Businesses are scrambling to jump aboard, whether they are breweries or not. Now Pepsi Cola company is riding the craft beer wave and they intend to launch a series of fountain craft soda. From Fox Business News

The maker of Pepsi-Cola and Mountain Dew sodas said Thursday it hopes to start placing a fountain machine in restaurants this summer carrying a new line of nonalcoholic, carbonated soft drinks called “Stubborn Soda” with flavors like “agave vanilla cream” and “black cherry with tarragon.”

PepsiCo also is trying to tap into the success of small craft brewers that have swiped market share from mainstream lagers like Budweiser and Miller with exotic offerings like cherry wheat ale and maple bacon coffee porter. The Stubborn Soda fountain machine will feature taps for eight flavors, including “lemon berry aç aí ,” that will be dispensed with levers resembling those used to pour beer.

The sodas will be naturally flavored and sweetened with cane sugar instead of high-fructose corn syrup at a time when more consumers are demanding natural ingredients.

PepsiCo declined to say if it has struck any agreements yet to place the machines in any restaurants. It plans to continue supplying its traditional machines carrying its major soda brands, which also include Sierra Mist.

Unlike in the beer industry, small soda makers have struggled to make big inroads and most Americans have continued to stick with mainstream brands like Coca-Cola, Sprite, Dr Pepper, Pepsi and Mountain Dew.

Considering our recent reports on the future of small breweries and the potential struggles they may face from illegal activities of larger breweries, the latter part of that report is quite insightful. The soft drink industry has not been kind to smaller drink makers. Perhaps craft beer should learn from that?

PepsiCo Is Launching a Line of Craft Fountain Sodas Called ‘Stubborn Soda’ - Recipes

PepsiCo has released a new, retro, artisanal cola product. Aimed at Millennial consumers, Caleb’s Kola is for those who have been gravitating towards products using pure and simple ingredients. Thus giving it an authentic and honest feeling.

The push to develop a market for craft sodas comes as Americans have been cutting back on carbonated drinks people are turning to a growing number of teas, waters and other choices in the beverage aisle. Caleb’s Kola is Pepsi’s response to this shift in consumer shopping habits.

Named after Pepsi’s inventor, Caleb Bradham, the new Caleb’s Kola uses simple ingredients such as, sparkling water, Fair Trade cane sugar, kola nut extract, and a “secured blend of brown spices from around the world.” Caleb’s Kola comes in a classic 10-ounce glass bottle. Currently being sold at US Costco locations in Maryland, New York, Virginia and Washington, D.C., it will eventually be made available at other supermarkets.

It’ll be fascinating to see if Coca-Cola or other big soda brands follow with a similar approach.

Caleb’s Kola Update

Here’s more evidence that the craft beer boom is spilling into soda. PepsiCo confirmed that it will soon launch a new line of craft sodas called Stubborn Soda. These sodas will be sold in fountains at select foodservice accounts. Stubborn Soda is expected to come in flavours including, black cherry with tarragon, classic root beer, lemon berry acai, agave vanilla cream, orange hibiscus and pineapple cream.

“Following our recent launches of Caleb’s Kola and Mountain Dew Dewshine, we’re continuing to explore the craft space with Stubborn Soda and its unique, contemporary flavor profiles,” said a PepsiCo spokeswoman. “Introducing it on fountain with an engaging piece of innovative equipment offers consumers a new take on the traditional soft-drink experience while also creating value for customers.”

[Editor’s Note: This is a sponsored post.]

New products aren’t always about reinventing the wheel. Some of the most successful innovations put a new spin on an existing product or create new experiences. Some of the most groundbreaking innovations, however, are creating new categories and starting something from scratch, reimagining the experience as opposed to taking a new approach to something old.

A big key is building upon lessons learned with other product launches – be it your own or that of others. That said, innovation doesn’t happen overnight it is definitely an intense and lengthy process – one that must incubate from within the corporate culture.

On the tech side, take the highly innovative and intensely popular Nest smart thermostat. Nest Labs CEO Tony Fadell summed it up at the 2014 Fast Company Innovation by Design Award and Conference in New York City. “Don’t just build a product, build a culture, company, and mission.”

Consumers value innovation. A 2015 Lab42 study revealed that, for 84 percent of respondents, it is somewhat or very important to buy from an innovative company. And consumers are willing to pay a premium for it. In fact, 67 percent of respondents would pay more for what they perceive to be innovative items.

Stubborn to the Soul

At PepsiCo, innovation is seen as all-encompassing, and much broader than just a product or packaging (from the way they communicate with customers to the way plants are set up to the product launch). In fact, there is an actual KPI (key performance indicator) setting a goal for the percentage of sales that should come from innovation, because the company knows that this is what keeps brands relevant and alive.

Its latest innovation, STUBBORN SODA, validated what they already knew by talking to owners and operators in the fast-casual space. PepsiCo confirmed that, as one of the fastest growing channels, fast-casual operators understand what consumers are looking for: authenticity, prominence of food, depth of experience, and new experiences.

“Fast-casual owners and operators have been successful because they reflect what consumers are looking for,” said Roberto Rios, CMO of Foodservice for PepsiCo. “We realized they were so passionate about their concept, and they wanted a beverage solution that reflected those same values. We realized that we had a great opportunity to develop something unique that reflected those values and that’s how we started working on STUBBORN.”

PepsiCo's Hello Goodness vending initiative.

PepsiCo believes the craft sodas will pair nicely with the artisanal pizza and burgers some of their customers across the country, including Umami Burger, Oath Craft Pizza, and California Fish Grill, are serving.

Incubation for the STUBBORN line started with a whole new fountain experience. The tap machine takes into account everything from the feel of the handles (which are real wood, like in Italy) to the way it pours (with a feel similar to craft beer), users not only get a sense of how the product is coming out, but they get a whole different experience.

The STUBBORN brand brings what customers value — authenticity and a premium experience — to life by giving customers what they are looking for in terms of natural, higher quality ingredients, prominence of flavors, and new tastes (like black cherry and tarragon), as well as a story around how the brand was formed.

“It’s a lot about storytelling, the content. We have a very clear positioning — of course, the name [STUBBORN] helps a lot,” Rios said. “We have so much fun around how we bring it to life, what type of spokesperson we’re going to use to represent the values of the brand. We believe that, in their soul, any creator is stubborn — to be able to put something out there into the world, to have the courage to do that.”

PepsiCo is hyper targeted in its processes — from its holistic business approach to its brand presence to its go-to-market strategy. Millennials are a key target for the craft brand.

“The fast-casual segment has a very unique and different approach to how they are providing differentiated food and beverage experiences. Because of that and because they are tapping into what millennials are looking for, they are being rewarded with growth,” Rios noted. “We realized that in order for STUBBORN to be everything we want it to be, it is important to…start in those spaces.”

Out of hundreds of names, some about prominence, some nostalgic, and everything in between, the decision was STUBBORN.

“It really reflected who we are because, to launch something in the market in today’s world, especially in a market like the U.S. where more than 10,000 innovations are launched every year, you have to be stubborn,” Rios explained. “You have to be on a mission.”

According to Harvard Business School, 95 percent of these products fail. Those that succeed take a “jobs to be done” or “purpose marketing” approach to market segmentation, according to Clayton M. Christensen, Kim B. Clark Professor of Business Administration at Harvard Business School.

A History of Innovation and Incubation

PepsiCo NSPIRE kitchen on wheels.

Mtn Dew Black Label is another example of PepsiCo’s innovative incubation. With 22 million college students in the United States, many of which engage with Mountain Dew, it was only logical to target the Mtn Dew Black Label brand to colleges and universities initially, making the product exclusively available in 900 schools. Samples were given out on campus, but beyond that, the campaign went much further, offering unique services to students like doing their laundry, delivering free pizza, and stocking their fridge — all centered around communicating the exciting new Mtn Dew Black Label, which became available nationally in 2016.

“The college kids went crazy on social, and we couldn’t believe some of the posts. The product ended up being sold on eBay and Amazon for $70 a case,” Rios recalled. “It created a craze because there’s a very loyal fan base of Mountain Dew, and Mtn Dew Black Label is also a unique product. It had the right target.”

The innovation team is fortunate to be able to learn from these previous incubations and launches.

“Every year we’re defining what we are going to do, and we take on the lessons of the past. Specific to STUBBORN, we learned that we had to be really uncompromising on everything that has to do with the brand,” Rios explained. “To command a premium, it had to have premium ingredients. We realized, that to break through the clutter to connect in today’s world, you need a different approach with a brand like STUBBORN.”

PepsiCo to launch new line of fountain craft sodas

(Reuters) - PepsiCo Inc <PEP.N> plans to introduce a line of fountain craft sodas called "Stubborn Soda" for soft drink dispensers in the United States as early as this summer.

The new sodas will be made with natural flavors, contain fair trade-certified cane sugar and will not contain high fructose corn syrup.

"Following our recent launches of Caleb’s Kola and Mountain Dew Dewshine, we’re continuing to explore the craft space with Stubborn Soda," PepsiCo spokeswoman Gina Anderson said in an email.

PepsiCo launched bottled versions of Caleb's Kola last year and introduced Mountain Dew Dewshine in March.

The company plans to roll out the new line in some regions this summer and may price it at a premium to brands such as Pepsi and Mountain Dew at dispensers.

The move comes amid a slowdown in soda consumption in the United States as more consumers prefer healthier options that are less sugary and use more natural ingredients.

Craft sodas are usually manufactured in smaller batches with more natural ingredients.

Trade publication Beverage-Digest first reported the news on Thursday.

The company may also offer Stubborn Soda for retail sale later, likely in glass bottles, and the new line could either replace or supplement PepsiCo's main brands on fountain taps.

(Reporting by Ramkumar Iyer and Nayan Das in Bengaluru Editing by Sriraj Kalluvila)

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Automotive Thermal Management System Market to Develop at 5.04% CAGR by 2027 | Market Research Future (MRFR)

Key companies profiled include VOSS Automotive GmbH (Germany), Dana Limited (US), Robert Bosch GmbH (Germany), BorgWarner Inc. (US), NORMA Group (Germany), Ymer Technology (Sweden), Renesas Electronics Corporation (Japan), Continental AG (Germany), DuPont (US), Hanon Systems (South Korea), Gentherm (US), Valeo (France), MAHLE GmbH (Germany), Modine Manufacturing Company (US), and Denso Corporation (Japan), among others.Pune, May 31, 2021 (GLOBE NEWSWIRE) -- Automotive Thermal Management System Market Analysis The automotive thermal management system market is anticipated to grow at a 5.04% CAGR in the forecast period (2020- 2027), states the current Market Research Future (MRFR) report. Thermal management, put simply, is a process to control the temperature and heat over technology. The electronic devices dissipate surplus heat during its operating condition and thus the thermal management system is utilized for improving the reliability and preventing failure of devices. This process is widely utilized in analyzing and monitoring the temperature of various components like cabinet area, battery, motor, and others. Power integrated circuits (ICs), connectors, converters, inverter, ECU’s, domain controller units, power distribution box, and others are the different components that have wide applications in waste heat recovery, transmission cooling, engine cooling, and others. Alluring Features that Bolster Market Growth According to the MRFR report, there are numerous factors that are propelling the automotive thermal management system market growth. Some of these entail the growing focus on fuel efficiency, increasing demand for electric cars worldwide, increasing focus on driver comfort, stringency in emission norms for cutting down vehicular emissions, and advances in mobility solutions. On the contrary, less acceptance of thermal system manufacturers, lack of calibration, and high price of thermal technology may limit the global automotive thermal management system market growth over the forecast period. Get Free Sample PDF Brochure https://www.marketresearchfuture.com/sample_request/6063 COVID-19 Analysis The COVID-19 outbreak has immensely impacted the global automotive thermal management system market growth due to a fall in demand. Besides, the manufacturing of automobiles was impacted due to physical distancing and lockdowns resulting in decline in the market growth. Also unavailability of labors, difficulty of sourcing raw materials owing to restrictions on transport, and supply chain disruptions overall have caused some obstacles in the growth of the market. Market Segmentation The MRFR report highlights on an inclusive analysis of the global automotive thermal management system market based on propulsion, vehicle type, application, technology, and component. By component, the global automotive thermal management system market is segmented into power integrated circuits (ICs), connectors, converters, inverter, ECU’s, domain controller units, power distribution box, and others. Of these, the power distribution box will lead the market over the forecast period. Based on technology, the automotive thermal management system market is segmented into exhaust gas recirculation, engine thermal mass reduction, active transmission warmup, and others. Of these, the engine thermal mass reduction segment will dominate the market over the forecast period. By application, the global automotive thermal management system market is segmented into waste heat recovery, transmission cooling, engine cooling, and others. Of these, engine cooling segment will spearhead the market in the forecast period. Based on vehicle type, this market is classified into commercial vehicles and passenger cars. Of these, the passenger cars will have the lions share in the market over the forecast period. By propulsion, the automotive thermal management system market is segmented into electrical vehicle and internal combustion engine (ICE). Of these, the internal combustion engine (ICE) segment will command the largest share in the market over the forecast period. Browse In-depth Market Research Report (136 pages) on Automotive Thermal Management System Market https://www.marketresearchfuture.com/reports/automotive-thermal-management-system-market-6063 Regional Analysis APAC to Sway Automotive Thermal Management System Market Geographically, the global automotive thermal management system market is bifurcated into Europe, North America, the Asia Pacific, and Rest of the World (RoW). Of these, the APAC region will sway the market over the forecast period. The existing infrastructure, the presence of key players, the presence of developing regions such as South Korea, India, Japan, and China which are the key markets for automotive components, increased consumption of commercial and passenger cars in China, the massive rise in the production of electric cars, increased sales of electric vehicles that need high-end technology to be installed in the cars, and growing need for e-mobility are adding to the global automotive thermal management system market growth in the region. Besides, the increasing purchasing power of consumers, strict regulation about fuel economy with restricted greenhouse emissions, the presence of leading manufacturers in Japan, growing vehicle production, increasing sales of hybrid cars, and the demand for lightweight and high performance thermal system are also adding market growth. Europe to Hold Second-Largest Share in Automotive Thermal Management System Market In Europe, the global automotive thermal management system market is predicted to hold the second-largest share over the forecast period. Regulatory laws revealed by the EU for vehicle emissions, the UK and France having announced their timelines for vehicle zero emission zones, improve fuel efficiency by optimizing the output from HVAC, fluid transport, and powertrain cooling, increased need among OEMs to develop advanced powertrain cooling technologies, and increasing need for alternative fuel vehicles are adding to the global automotive thermal management system market growth in the region. North America to Have Notable Growth in Automotive Thermal Management System Market In North America, the global automotive thermal management system market is predicted to have notable growth over the forecast period. Growing investments on R&D to promote vehicle advanced technologies, increased presence of key manufacturers, increased government support and backing, investments in R&D, huge potential consumer base, and demand for fuel efficiency in cars are adding to the global automotive thermal management system market are adding to the automotive thermal management system market growth in the region. Share your Queries https://www.marketresearchfuture.com/enquiry/6063 Key Players The leading players profiled in the global automotive thermal management system market report include VOSS Automotive GmbH (Germany), Dana Limited (US), Robert Bosch GmbH (Germany), BorgWarner Inc. (US), NORMA Group (Germany), Ymer Technology (Sweden), Renesas Electronics Corporation (Japan), Continental AG (Germany), DuPont (US), Hanon Systems (South Korea), Gentherm (US), Valeo (France), MAHLE GmbH (Germany), Modine Manufacturing Company (US), and Denso Corporation (Japan), among others. The automotive thermal management system market is fragmented and also competitive with the presence of many domestic as well as international industry players. They have incorporated assorted strategies to stay at the forefront and also cater to the surging needs of the customers, including collaborations, partnerships, contracts, geographic expansions, new product launches, joint ventures, and more. Additionally, these players are also making heavy investments in research and development activities for strengthening their portfolios and also creating a hold in the market. Discover More Research Reports on Automobile Industry, By Market Research Future Browse Related Reports: Air Powered Vehicle Market Research Report: Information by Energy Mode (Single Energy Mode, Dual Energy Mode), Vehicle Type (Passenger Car, LCV, HCV) and Region - Global Forecast till 2027 Global Electric Vehicle Battery Recycling Market Research Report: Information, by Battery Type (lead acid, lithium-ion and others), Process (Pyrometallurgical, Hydrometallurgical and others), Application (Passenger Car and Commercial Vehicle) and Region (North America, Europe, Asia-Pacific and the Rest of the World) - Forecast till 2027 Global Electric Car Rental Market Research Report: Information by Vehicle Type (Battery, Hybrid and Plug-In Electric Car), Application (Economic Car, Executive Car, and others), Service (Online and Offline) and Region (North America, Europe, Asia-Pacific and Rest of the World) - Forecast till 2027 Global Battery Management System for Electric Vehicles Market Research Report: Information by System (Hardware and Software), Application (Passenger Car and Commercial Vehicle), Vehicle Type [Battery Electric Vehicle (BEV), Hybrid Electric Vehicle (HEV), Plug-in Hybrid Electric Vehicles (PHEV)] and Region (North America, Europe, Asia-Pacific and the Rest of the World) - Forecast till 2027 Global Solar-Powered Vehicle Market Research Report: Information by Solar Panel (Monocrystalline and Polycrystalline Solar Panel), by Battery Type (Lithium-Ion Battery, Lead-Acid, Lead-Carbon and others), by Propulsion (Battery and Hybrid Electric Vehicle), by Vehicle Type (Passenger Car and Commercial Vehicle) and by Region (North America, Europe, Asia-Pacific and Rest of the World) - Forecast till 2027 Global Hyper Car Market Research Report: Information by Propulsion (ICE Vehicle, Electric Vehicle and Hybrid Vehicle), by Application (Racing Competition, Entertainment and others) and by Region (North America, Europe, Asia-Pacific and the Rest of the World) - Forecast till 2027 Global Semi-Autonomous Vehicle Market Research Report: Information by Component (Camera, LiDAR, Radar, Ultrasonic Sensor and others), ADAS Features (Lane Assist, Crash Warning System, Adaptive Cruise Control, Smart Park Assist, Cross Traffic Alert, Automatic Emergency Braking and others), Automation Level (Level 1, Level 2 and Level 3), Propulsion (ICE and Electric) and by Region (North America, Europe, Asia-Pacific and the Rest of the World) - Forecast till 2027 Global Electric Vehicle Battery Charger Market Research Report: Information by Electric Vehicle Type (Battery Electric Vehicle and Plug-In Hybrid Electric Vehicle), Level of Charging (Level 1, Level 2 and Level 3), Application (Private and Public) and by Region (North America, Europe, Asia-Pacific and the Rest of the World) - Forecast till 2027 Global Automotive Industry Research Report, Information Segmentation By Vehicle Type (Passenger Cars, Commercial Vehicle) and Region – Global Report Forecast till 2027 Global Used Vehicle Market Research Report: Information by Vehicle Age (0-5, 6-10, 11-15, 15-20, and > 20 years old), Vehicle Type (Passenger Car, Light Commercial Vehicle, And Heavy Commercial Vehicle), Propulsion (ICE and Electric Vehicle), Sales Channel (Franchised, Independent Car Dealers, Rental Car Companies, and Others), and Region (North America, Asia–pacific, Europe, and Rest of the World) - Forecast till 2027 About Market Research Future: Market Research Future (MRFR) is a global market research company that takes pride in its services, offering a complete and accurate analysis with regard to diverse markets and consumers worldwide. Market Research Future has the distinguished objective of providing the optimal quality research and granular research to clients. Our market research studies by products, services, technologies, applications, end users, and market players for global, regional, and country level market segments, enable our clients to see more, know more, and do more, which help answer your most important questions. Follow Us: LinkedIn | Twitter CONTACT: Contact: Market Research Future Phone: +1 628 258 0071(US) +44 2035 002 764(UK) Email: [email protected] Website: https://www.marketresearchfuture.com

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(Reuters) - PepsiCo Inc (PEP.N) plans to introduce a line of fountain craft sodas called "Stubborn Soda" for soft drink dispensers in the United States as early as this summer.

The new sodas will be made with natural flavors, contain fair trade-certified cane sugar and will not contain high fructose corn syrup.

"Following our recent launches of Caleb’s Kola and Mountain Dew Dewshine, we’re continuing to explore the craft space with Stubborn Soda," PepsiCo spokeswoman Gina Anderson said in an email.

PepsiCo launched bottled versions of Caleb's Kola last year and introduced Mountain Dew Dewshine in March.

The company plans to roll out the new line in some regions this summer and may price it at a premium to brands such as Pepsi and Mountain Dew at dispensers.

The move comes amid a slowdown in soda consumption in the United States as more consumers prefer healthier options that are less sugary and use more natural ingredients.

Craft sodas are usually manufactured in smaller batches with more natural ingredients.

Trade publication Beverage-Digest first reported the news on Thursday.

The company may also offer Stubborn Soda for retail sale later, likely in glass bottles, and the new line could either replace or supplement PepsiCo's main brands on fountain taps.

(Reporting by Ramkumar Iyer and Nayan Das in Bengaluru Editing by Sriraj Kalluvila)

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Stock Splits Are Back. So Is the Debate Over Whether They Matter

(Bloomberg) -- Stock splits are back in vogue among big U.S. companies, reviving a debate about whether the practice that had fallen out of favor for years is worth the fuss.Last week, Nvidia Corp. became the eighth company in the S&P 500 Index to announce a split in the past year, joining big names like Apple Inc. and Tesla Inc. That’s the most over a comparable period in six years, according to data compiled by Bloomberg.The surge in splits comes amid a rally that’s pushed share prices of almost 600 stocks in the Russell 3000 Index above $100. Yet that has done little to settle the age-old-argument among investors about whether such stock-price engineering has any bearing on performance. In fact, recent developments such as soaring retail trading and fractional share ownership have only heated things up.“Arithmetically, there’s no merit to the notion that stock splits work,” said Mark Lehmann, chief executive officer of JMP Securities LLC. “But there is an optical hesitancy for certain stocks at certain prices and there is a segment of the investing public where that will never change.”The primary motivation cited by companies doing splits is simple: to make each share cheaper to buy. Nvidia, whose share price has more than quadrupled since the start of 2019 to reach almost $650, said in a statement announcing its 4-for-1 stock-split plan that its aim was to “make stock ownership more accessible to investors and employees.” A representative for the chipmaker declined to comment further.Once a reliable hallmark of bull-market exuberance, the practice had until recently fallen out of favor. In 2006 and 2007, when stocks were again setting records, there were 47 splits in the S&P 500. Three companies -- Nvidia, Paccar Inc. and Cummins Inc. -- even split twice. In 2019, there were only two.For Julian Emanuel, chief equity and derivatives strategist at BTIG, it’s harder to make the case for splitting a stock these days because of the rise of commission-free trading and brokerages offering fractional shares. Those developments “have largely rendered irrelevant the dollar value of a company’s share price,” he said in an interview.Brokerages like Robinhood now let investors buy a slice of a share for as little as $1 rather than forking over, say, more than $2,300 for a single share of Google-parent Alphabet Inc.Limited Benefits A look at the data backs up the case against splits providing long-term benefits to stock performance. The shares of companies that have split outperformed the S&P 500 on average in four of the last five years in the year the split was announced, according to Bloomberg data. The calendar year following the move, however, those same shares underperformed four of the five years.The recent rash of stock splits has sparked speculation that other large technology companies like Amazon.com Inc. that boast four-digit share prices may be next. Amazon split its stock three times in 1998 and 1999 and hasn’t done one since. Shares of the e-commerce giant trade around $3,200 and have gained more than 5,000% since its last split.Regardless of what the historical-performance record shows, the surge in retail trading over the past year may be altering the calculus for companies when it comes to evaluating splits.U.S. retail investors are now second in share trading only to market makers and independent high-frequency traders, according to Larry Tabb, director of market structure research at Bloomberg Intelligence. The retail segment is now larger than quantitative investors, hedge funds and traditional long-only participants, said Tabb.“A lot of investing is driven by psychology,” said Kevin Walkush, a portfolio manager with Jensen Investment Management. “Now, rather than a retail investor facing the challenge of buying a fractional share, a stock split means they can buy it outright. It just opens up the market that much more for retail investors.”More stories like this are available on bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.

China Huarong’s Journey From Safe Bet to Bad News: A Timeline

(Bloomberg) -- It’s nearly two months since turbulence erupted around China Huarong Asset Management Co.At the end of March, its 4% perpetual dollar bond was trading at 102 cents on the dollar as investors figured the January execution of former chairman Lai Xiaomin for bribery put a line under past wayward behavior. But the failure of the company to release 2020 results by a March 31 deadline, and a subsequent report by mainland media Caixin that the firm will restructure, sparked weeks of turmoil. The same bond is now at 57 cents.The heart of the matter is whether the central government will rescue a state-owned company that’s integral to the smooth running of the financial system. While there are signs Beijing wants to ensure China Huarong can repay its debts on time, uncertainty prevails.Here’s a look at the key events for China Huarong:May 28The company has wired funds to repay $978 million of notes maturing within the following week, according to Bloomberg News, the biggest bond payment since the 2020 results delay.May 27Liang Qiang, who currently heads another bad-debt manager, is on track to become president of China Huarong, reports Bloomberg News.May 24China Huarong dollar bonds climb after the managing editor of Caixin Media wrote in an opinion piece that the asset manager is “nowhere near” defaulting on its more than $20 billion of offshore notes.May 21Some of China Huarong’s thinly traded onshore bonds slump after having held up better than the company’s dollar-denominated notes, signaling broadening concern about the firm’s financial health.May 18China Huarong has transferred funds to repay a $300 million note maturing May 20, Bloomberg News reports, the first dollar bond to come due since the delayed 2020 results. Prices for the firm’s dollar bonds slump earlier in the day after the New York Times reports China is planning an overhaul that would inflict “significant losses” on both domestic and foreign China Huarong bondholders.May 17The company has reached funding agreements with state-owned banks to ensure it can repay debt through at least the end of August, by which time China Huarong aims to have completed its 2020 financial statements, according to a Bloomberg News report. That as at least two of its onshore bonds see big price declines in recent days, worrying some investors.May 13The firm says it’s prepared to make future bond payments and has seen no change in the level of government support, seeking to ease investor concerns after a local media report that regulators balked at China Hurarong’s restructuring plan.May 6The company says it transferred funds to pay five offshore bond coupons due the following day, its latest move to meet debt obligations amid persistent doubts about its financial health.April 30China Huarong breaks its silence, with an executive telling media it is prepared to make its bond payments and state backing remains intact. The official also says the week’s rating downgrades “have no factual basis” and are “too pessimistic.”April 29Moody’s Investor Service downgrades China Huarong by one notch to Baa1, adding the firm remains on watch for further downgrade. The cut reflects the company’s weakened funding ability due to market volatility and increased uncertainty over its future, according to the statement.April 27China Huarong units repay bonds maturing that day. The S$600 million ($450 million) bond was repaid with funds provided by China’s biggest state-owned bank, according to a Bloomberg News report.April 26Fitch Ratings downgrades China Huarong by three notches to BBB while dropping the company’s perpetual bonds into junk territory. The lack of transparency over government support for the firm may hamper its ability to refinance debt in offshore markets, Fitch said.April 25China Huarong says it won’t meet an April 30 deadline to file its 2020 report with Hong Kong’s stock exchange because auditors needed more time to finalize a transaction the company first flagged on April 1. Securities and asset-management units said in the days before that they wouldn’t release 2020 results by month’s end.April 22The China Banking and Insurance Regulatory Commission asks lenders to extend China Huarong’s upcoming loans by at least six months, according to REDD, citing two bankers from large Chinese commercial lenders.April 21China is considering a plan that would see its central bank assume more than 100 billion yuan ($15 billion) of China Huarong assets to help clean up the firm’s balance sheet, according to a Bloomberg News report. Peer China Cinda Asset Management Co. was said to be planning the sale of perpetual bonds in the second quarter.April 20China Huarong’s key offshore financing unit says it returned to profitability in the first quarter and laid a “solid” foundation for transformation. Reorg Research reports that regulators are considering options including a debt restructuring of the unit, China Huarong International Holdings Ltd.April 19Huarong Securities Co. says it wired funds to repay a 2.5 billion yuan local note.April 16The CBIRC says China Huarong’s operations are normal and that the firm has ample liquidity. These are the first official comments about the company’s troubles. Reuters reports Chinese banks have been asked not to withhold loans to Huarong.April 13Fitch and Moody’s both put the company on watch for downgrade. The finance ministry, which owns a majority of Huarong, is considering the transfer of its stake to a unit of the country’s sovereign wealth fund, Bloomberg News reports. Chinese officials signal they want failing local government financing vehicles to restructure or go bust if debts can’t be repaid.April 9China Huarong says it has been making debt payments “on time” and its operations are “normal.” Bloomberg News reports the company intends to keep Huarong International as part of a potential overhaul that would avoid the need of a debt restructuring or government recapitalization. S&P Global Ratings puts China Huarong’s credit ratings on watch for possible downgrade.April 8China Huarong is preparing to offload non-core and loss-making units as part of a broad plan to revive profitability that would avoid the need for a debt restructuring or government recapitalization, Bloomberg News reports.April 6Selling gains steam in China Huarong’s dollar bonds, following a holiday in China. Huarong Securities says there has been no major change to its operations, in response to a price plunge for its 3 billion yuan local bond.April 1China Huarong announces a delay in releasing 2020 results, saying its auditor is unable to finalize a transaction. Stock trading is suspended and spreads jump on the firm’s dollar bonds while China Huarong tells investors its business is running as usual. Caixin reports the company submitted restructuring and other major reform plans to government officials and shareholders.More stories like this are available on bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.

Fourth stimulus check in jeopardy while the last payments keep dwindling

Will President Biden and Congress provide more relief? It's looking iffy.

Turkish Economy Likely Outperformed Most Peers But at a Cost

(Bloomberg) -- Sign up for the New Economy Daily newsletter, follow us @economics and subscribe to our podcast.Turkey’s economy has continued to grow at a strong pace so far this year, but that doesn’t necessarily mean its citizens are getting richer.The $717 billion economy likely outperformed all Group of 20 nations except for China in the first quarter after nearly stalling a year ago when the pandemic struck. It’s been bolstered by robust consumption on the back of last year’s government-led credit push, an expansion that came at the expense of price and currency stability.Data on Monday is likely to show gross domestic product rose 6.3% from a year earlier and 1.3% from the fourth quarter, according to the medians of forecasts in Bloomberg surveys. Treasury and Finance Minister Lutfi Elvan said Thursday that “data point to 6% growth in the first quarter.”There is an “exchange rate illusion” in Turkey’s economic growth data, according to Enver Erkan, chief economist at Istanbul-based Tera Yatirim, who’s ranked by Bloomberg as the most accurate forecaster on Turkish GDP data.Noting that the GDP per capita in U.S. dollar terms dropped nearly 40% since 2013 to around $7,700 last year, Erkan said Turkey’s recent economic model isn’t sustainable as the growth is mainly driven by consumption supported by government spending and loan campaigns.“This comes at the expense of lira and price stability,” he said.The government pushed banks to ramp up lending to help businesses and consumers ride out last year’s Covid-19 emergency. The credit boom was coupled with a front-loaded easing cycle that helped prime the economy. That growth push weakened the currency by 20% last year and kept headline inflation in double digits. The size of the economy dropped to $717 billion last year from $760.8 billion a year earlier.The currency further lost 10% against the dollar in the first quarter, especially after President Recep Tayyip Erdogan fired the central bank’s former hawkish governor Naci Agbal in March. The decision to fire Agbal, who had sought to restore the central bank’s credibility, set off a swift reversal of investor enthusiasm, sending Turkish markets into a nosedive.The data expose the challenge facing new central bank Governor Sahap Kavcioglu as he looks to restore price stability without cooling the economy ahead of the general elections in 2023.Kavcioglu has pledged policy continuity after his appointment and kept benchmark interest rate unchanged at 19% for a second meeting this month, saying the pace of price gains had peaked in April. Consumer inflation quickened for a seventh month to 17.14% in April.More stories like this are available on bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.

This Time Is Different: Outside OPEC+, Oil Growth Stalls

(Bloomberg) -- “This time is different” may be the most dangerous words in business: billions of dollars have been lost betting that history won’t repeat itself. And yet now, in the oil world, it looks like this time really will be.For the first time in decades, oil companies aren’t rushing to increase production to chase rising oil prices as Brent crude approaches $70. Even in the Permian, the prolific shale basin at the center of the U.S. energy boom, drillers are resisting their traditional boom-and-bust cycle of spending.The oil industry is on the ropes, constrained by Wall Street investors demanding that companies spend less on drilling and instead return more money to shareholders, and climate change activists pushing against fossil fuels. Exxon Mobil Corp. is paradigmatic of the trend, after its humiliating defeat at the hands of a tiny activist elbowing itself onto the board.The dramatic events in the industry last week only add to what is emerging as an opportunity for the producers of OPEC+, giving the coalition led by Saudi Arabia and Russia more room for maneuver to bring back their own production. As non-OPEC output fails to rebound as fast as many expected -- or feared based on past experience -- the cartel is likely to continue adding more supply when it meets on June 1.‘Criminalization’Shareholders are asking Exxon to drill less and focus on returning money to investors. “They have been throwing money down the drill hole like crazy,” Christopher Ailman, chief investment officer for CalSTRS. “We really saw that company just heading down the hole, not surviving into the future, unless they change and adapt. And now they have to.”Exxon is unlikely to be alone. Royal Dutch Shell Plc lost a landmark legal battle last week when a Dutch court told it to cut emissions significantly by 2030 -- something that would require less oil production. Many in the industry fear a wave of lawsuits elsewhere, with western oil majors more immediate targets than the state-owned oil companies that make up much of OPEC production.“We see a shift from stigmatization toward criminalization of investing in higher oil production,” said Bob McNally, president of consultant Rapidan Energy Group and a former White House official.While it’s true that non-OPEC+ output is creeping back from the crash of 2020 -- and the ultra-depressed levels of April and May last year -- it’s far from a full recovery. Overall, non-OPEC+ output will grow this year by 620,000 barrels a day, less than half the 1.3 million barrels a day it fell in 2020. The supply growth forecast through the rest of this year “comes nowhere close to matching” the expected increase in demand, according to the International Energy Agency.Beyond 2021, oil output is likely to rise in a handful of nations, including the U.S., Brazil, Canada and new oil-producer Guyana. But production will decline elsewhere, from the U.K. to Colombia, Malaysia and Argentina.As non-OPEC+ production increases less than global oil demand, the cartel will be in control of the market, executives and traders said. It’s a major break with the past, when oil companies responded to higher prices by rushing to invest again, boosting non-OPEC output and leaving the ministers led by Saudi Arabia’s Abdulaziz bin Salman with a much more difficult balancing act.Drilling DownSo far, the lack of non-OPEC+ oil production growth isn’t registering much in the market. After all, the coronavirus pandemic continues to constrain global oil demand. It may be more noticeable later this year and into 2022. By then, vaccination campaigns against Covid-19 are likely to be bearing fruit, and the world will need more oil. The expected return of Iran into the market will provide some of that, but there will likely be a need for more.When that happens, it will be largely up to OPEC to plug the gap. One signal of how the recovery will be different this time is the U.S. drilling count: It is gradually increasing, but the recovery is slower than it was after the last big oil price crash in 2008-09. Shale companies are sticking to their commitment to return more money to shareholders via dividends. While before the pandemic shale companies re-used 70-90% of their cash flow into further drilling, they are now keeping that metric at around 50%.The result is that U.S. crude production has flat-lined at around 11 million barrels a day since July 2020. Outside the U.S. and Canada, the outlook is even more somber: at the end of April, the ex-North America oil rig count stood at 523, lower than it was a year ago, and nearly 40% below the same month two years earlier, according to data from Baker Hughes Co.When Saudi Energy Minister Prince Abdulaziz predicted earlier this year that “‘drill, baby, drill’ is gone for ever,” it sounded like a bold call. As ministers meet this week, they may dare to hope he’s right.More stories like this are available on bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.

Sunak pushes Biden for tougher global tax deal

Rishi Sunak is pushing the United States to agree to tougher rules on the tax paid by tech giants as part of a global corporation tax overhaul. Finance ministers from the G7 will meet this week to thrash out the biggest reforms to global tax rules in a generation in a bid to ensure multinational companies pay their fair share. President Joe Biden has proposed a minimum global corporation tax rate of 15pc as well as new rules forcing the world's largest 100 companies to pay taxes based on the location of their customers, rather than where they book profits. The plans are aimed to preventing multinationals from shifting profits to low-tax jurisdictions - a growing problem that is feared will deprive governments of revenues as they try to recover from the pandemic. However, the UK is holding out on backing America's plans for a minimum corporation tax rate as it seeks more assurances over the tax treatment of big tech companies such as Facebook, Amazon and Google. The Chancellor told the Mail on Sunday: "We understand why an agreement on global corporation tax is important to our American friends. We need them to understand why fair taxation of tech companies is important to us. "There's a deal to be had and I'm urging the US - and all of the G7 - to come to the table next week and get it done."

Mortgage rates dip beneath 3% again, offering new refinance savings

Over 14 million mortgage holders can qualify to save on a refi, new data shows.

Going flat

Soda, like beer, has been caught in multiyear decline in consumption, though for vastly different reasons. With beer, it was largely a rebellion again the watered-down, pale yellow brews served up by A-B InBev, SABMiller, and Molson Coors that helped foment the craft beer revolution. In soda, it was consumers rejecting artificial additives and sweeteners that caused the rising tide of change.

Where Pepsi and Coke had once been able to rely upon high fructose corn syrup and aspartame to create big-selling diet soda brands, consumers suddenly had concerns about the effects these sweeteners had on their health and they turned to other beverages as a result. For 11 straight years, soda consumption has fallen and consumption in the U.S. hit a 30-year low in 2015.

The soda companies are responding by switching to "real sugar" as their preferred sweetener, but using odd additives to give their brands that "craft" feel. Both Caleb's Kola and 1893 are made from kola nuts, real sugar, spices, and other natural ingredients. Pepsi says Stubborn will only use "quality ingredients and flavors." Ironically, it was concern about sugar's contributing to the obesity epidemic that led the soda companies to switch to artificial ingredients in the first place.

Pepsi even had its own New Coke moment when it removed aspartame from its Diet Pepsi brand, but actually caused sales to erode faster. It's since brought back the artificially sweetened version and sells both styles now.

Medicinal Soft Drinks and Coca-Cola Fiends: The Toxic History of Soda Pop

Soda’s reputation has fallen a bit flat lately: The all-American beverage most recently made headlines due to an FDA investigation of a potential carcinogen, commonly called “caramel coloring,” used in many soft-drink recipes. This bit of drama follows other recent stories that paint an unflattering picture of the soda industry, including New York’s attempt to ban super-sized drinks, the eviction of soda machines from many public schools, and a spate of new soda-tax proposals. All these regulations are designed to mitigate the unhealthy impacts of Big Soda, such as increasing childhood obesity, in the same way restrictions were slapped on cigarettes in years past.

“The drink became symbolic of America, and even freedom in a way. It made Coca-Cola more than just another fizzy drink.”

Faced with all this bad press, it’s hard to believe that the “evil” soft drink actually began as a health product, touted for its many beneficial effects. In fact, soda got its start in Europe, where the healing powers of natural mineral waters have been prescribed for hundreds of years. Bathing or drinking the water from these natural spas was thought to cure a wide variety of illnesses. Tristan Donovan, the author of Fizz: How Soda Shook Up the World, says that the ailments treated with bubbling spring waters constituted a “ludicrously big list,” everything from gallstones to scurvy. (In reality, the beverage did little more than settle an upset stomach, without any adverse side effects.)

Despite the broad appeal of mineral water, packaging and transporting this effervescent liquid proved difficult, so chemists set out to make their own. “It took until 1767 for the real breakthrough to happen when Joseph Priestley, the British chemist who was the first to identify oxygen, figured out a way to put carbon dioxide into water,” says Donovan. Priestley’s process used a fermenting yeast mash to infuse water with the gas, resulting in a weakly carbonated drink. Proponents of the bubbly beverage’s healthful properties were thrilled.

Top: A Coke advertisement from 1907. Above: Early soda machines required oversized cranks to manually carbonate water, like these devices from the 1870s.

In 1783, the Swiss scientist Johann Jacob Schweppe improved on Priestley’s process with a device for carbonating water using a hand-cranked compression pump, launching the now-famous Schweppes company. Yet it was still virtually impossible to get carbonated water to market without losing its fizz, as drinks in corked stoneware bottles tended to go flat quickly and glass bottles weren’t widely available. Charles Plinth solved part of the problem with his soda syphon in 1813, which could dispense bubbly water without compromising the remaining mixture’s carbonation, though syphons still had to be refilled at a facility that actually produced the carbonated liquid.

Finally, in 1832, the English-born American inventor John Matthews developed a lead-lined chamber wherein sulphuric acid and powdered marble (also known as calcium carbonate) were mixed together to generate carbon dioxide. The gas was then purified and manually mixed into cool water with steady agitation, creating carbonated water. Matthews’ design worked either as a bottling unit or a soda fountain, since it produced enough carbonated water to last customers all day. But America’s weak glass industry still wasn’t able to support large-scale bottling plants, so the simplest way to sell soda water was at public fountains.

Left, a Schweppes ad from 1937, more than 150 years after the mineral water company was founded. Right, early carbonated waters were sometimes sold in rounded “torpedo” bottles, forcing them to lie flat so the liquid contents would dampen the cork, preventing it from shrinking.

“If I were going to single out one person as creating the carbonated drink industry, I would give credit to Benjamin Silliman, even though he eventually failed financially,” says Anne Funderburg, the author of Sundae Best: A History of Soda Fountains.

An illustration of a French soda water apparatus, featuring soda syphons and carbonating machines below the counter, circa 1830s.

“Silliman was a chemistry professor at Yale College, and he wanted to supplement his small paycheck while also doing something altruistic for mankind. Silliman believed that carbonated waters could be used as medicine, so he set up a business in New Haven, Connecticut, selling bottled carbonated water.” Though Silliman had little success selling the drink at his local apothecary, he decided to expand his business, designing a larger-capacity carbonation apparatus and securing investments to open two pump rooms in New York City.

In 1809, Silliman started selling his soda water at the Tontine coffeehouse and the City Hotel, elegant establishments that catered to an elite clientele (the Tontine was in the same building as the New York Stock Exchange). In addition to their supposedly beneficial products, these early soda fountains were designed to create an uplifting environment, adorned with marble counters and ornate brass soda dispensers. However, Silliman continued to focus on the medical benefits of his soda water, while his competitors recognized that the social aspects of drinking were potentially more appealing.

In their heyday, soda fountains were elaborately designed places for rejuvenation. Left, the counter at the Clarkson & Mitchell Drugstore in Springfield, Illinois, circa 1905. Via the Abraham Lincoln Presidential Library and Museum. Right, an 1894 ad for an ornate fountain produced by Charles Lippincott & Co.

“People who had better business sense than Silliman set up their pump rooms like a spa: You came to drink your carbonated water, but you hung around reading the free books and conversing with other intelligent people who were also there to drink carbonated water,” says Funderburg. “They understood that you could make a real business out of it, where Silliman treated soda more as a medicine.” Though the servers at Tontine recognized that customers preferred soda water as a mixer, it remained a slow seller, and eventually Silliman was forced out of the industry. Even as Silliman’s company failed, the soda trend was catching, and successful fountains soon popped up in other cities like Philadelphia and Baltimore.

Because carbonated water was still viewed as a health drink, the first soda shops were situated in drugstores and closely linked with their pharmacies. “Part of the reason they became so entwined is that the process of carbonating water and making syrups or flavorings was something pharmacists already had the skill set to do,” Donovan explains. “They were the obvious people to take this on, and they started adding in ingredients they thought were health-providing. Sarsaparilla was linked to curing syphilis. Phosphoric acid was seen as something that could help hypertension and other problems.” Long-standing favorites like ginger ale and root beer were also initially prized for their medicinal qualities.

According to Darcy O’Neil, author of Fix the Pumps, pharmacists initially used sweet-tasting soda flavors to mask the taste of bitter medicines like quinine and iron, as most medication was taken in liquid form during this era. Plus, many pharmaceutical tinctures and tonics were already mixed with alcohol, which made even the most pungent medicinal flavors enticing. “Many of the elixirs and tonics contained as much alcohol as a shot of whiskey,” writes O’Neil. “This was popular with both the imbiber and pharmacy. The imbiber could get an alcoholic drink at a fraction of the bar’s price because there were no taxes on alcohol-based ‘medicine.’”

Acid phosphates like Horsford’s, seen in these advertisements from the 1870s, gave many soda fountain drinks a distinctively tart flavor.

Besides booze, sodas of the 19th century also incorporated drugs with much stronger side effects, including ingredients now known as narcotics. Prior to the Pure Food & Drug Act of 1906, there were few legal restrictions on what could be put into soda-fountain beverages. Many customers came to soda fountains early in the morning to get a refreshing and “healthy” beverage to start their day off right: Terms like “bracer” and “pick-me-up” referred to the physical and mental stimulation sodas could provide, whether from caffeine or other addictive substances.

Pharmacists were soon making soda mixtures with stronger drugs known as “nervines,” a category that included strychnine, cannabis, morphine, opium, heroin, and a new miracle compound called cocaine, which was first isolated in 1855. “Cocaine was a wonder drug at the time when it was first discovered,” Donovan explains. “It was seen as this marvelous medicine that could do you no harm. Ingredients like cocaine or kola nuts or phosphoric acid were all viewed as something that really gave you an edge.

“Cocaine was a wonder drug at the time when it was first discovered. It was seen as this marvelous medicine that could do you no harm.”

“Recipes I’ve seen suggest it was about 0.01 grams of cocaine used in fountain sodas. That’s about a tenth of a line of coke,” he says. “It’s hard to be sure, but I don’t think it would’ve given people a massive high. It would definitely be enough to have some kind of effect, probably stronger than coffee.” While the dosages were small, they were certainly habit-forming, and soda fountains stood to profit from such consistent customers.

Throughout the mid-19th century, soda fountains spread clear across the U.S., and a niche health drink became a beloved American refreshment, capable of competing with the best cocktails in the world. Soda throwers or soda jerks, as they were later called (after the jerking arm movement required to operate the taps), had to be just as skilled as bartenders at mixing drinks in fact, many bartenders started working at soda fountains once the industry was booming.

“Around that time, it became obvious to the medical profession that there weren’t any health benefits to carbonated water on its own, so people started selling it as a treat,” says Funderburg. “It’s hard to put our heads around how much of a treat cold fizzy water was back then. People didn’t have mechanical refrigeration, so to have a cold drink was a big deal. They flavored them with chocolate or fruit syrups, and citrus fruits like lime and lemon became favorites.”

By the early 20th century, soda fountains were an integral part of neighborhood drugstores, such as this counter in the People’s Drug Store, in Washington, D.C. pharmacy, circa 1920. Via Shorpy.

Presumably, as soon as carbonated water was commercially available, people were adding their own flavorings to spice things up. “The earliest advertisement I’ve managed to find for something we would call soda was from 1807, and that was a sparkling lemonade being sold in York,” says Donovan. “It could have been a fairly new idea, but people had flavored still water for years beforehand.”

Lemon drinks made up the first of many flavor fads to hit the soda industry, likely because un-carbonated lemonade was a familiar refreshment. According to O’Neil, lemon syrups were already used as a base flavor for many medicines, so concocting a tasty drink with these was natural. Beyond lemon, all manner of citrus-flavored sodas were enjoyed in the mid-1800s, in part because their essential oils were easy to extract and preserve. Other fountain staples included orange, vanilla, cherry, and wintergreen, although shops were always testing new recipes looking for the latest hip drink. Most soda mixtures were made using a sugary simple syrup, but popular flavors were often far more tart than today’s sodas.

One of the most complete records of these innovative cocktails is DeForest Saxe’s 1894 book entitled Saxe’s New Guide, or, Hints to Soda Water Dispensers. In its pages, Saxe illuminates his own experience working a soda fountain, detailing tips for pouring sodas, keeping them cold, and making an extensive list of drink recipes. From a “Tulip Peach” to a “Swizzle Fizz,” or an “Opera Bouquet” to an “Almond Sponge,” Saxe covered the wildest new flavor sensations in addition to the classic egg creams and flavored phosphates. But despite their fantastic names, Saxe’s recipes notably avoid the medicinal ingredients many soda fountains relied upon to give their drinks a kick.

An illustration of proper mixing form as published in Saxe’s 1894 book.

By the turn of the 20th century, many Americans had begun to recognize the dangers of serving unregulated medications in such a casual manner. In 1902, the Los Angeles Times published an article titled “They Thirst for Cocaine: Soda Fountain Fiends Multiplying,” which focused on the questionable ingredients in popular drinks like Coca-Cola. However, Donovan says that judging from the small quantities of cocaine in actual recipes, it’s doubtful that there were many soda-addicted fiends.

In the 1890s, Coke was directly marketed as a medicinal drink.

In fact, Coke was developed while looking for an antidote to the common morphine addictions that followed the Civil War: Veteran and pharmacist John Stith Pemberton concocted the original Coca-Cola mixture while experimenting with opiate-free painkillers to soothe his own war wounds. The company’s first advertisement ran on the patent-medicine page of the Atlanta Journal in 1886, and made it clear that Coca-Cola was viewed as a health drink, “containing the properties of the wonderful Coca plant and the famous Cola nuts.”

Of course, these were also the properties of your basic uppers: Cocaine is a coca leaf extract, and the African kola nut is known for its high caffeine content. Once the Pure Food and Drug Act of 1906 required narcotics to be clearly labelled, the majority of Coca-Cola’s cocaine was removed, though it took until 1929 for the company to develop a method that could eliminate all traces of the drug.

However, at the turn of the 20th century, the harshest public criticism was reserved for a different devilish drink—alcohol. As temperance groups rallied against booze, they helped propel teetotaling customers into American soda fountains. In 1919, the year before Prohibition took effect, there were already 126,000 soda fountains in the United States, far exceeding the number of bars and nightclubs today. “Soda had always played up the temperance link,” says Donovan. “Even before Prohibition, sodas like Hires Root Beer were presented as non-alcoholic drinks and marketed that way. Lots of fizzy-drink companies encouraged the temperance movement, and they were generally quite pleased from a business perspective when Prohibition came in. Their sales rose. People couldn’t go to bars anymore so they turned to soda fountains instead.”

Hires’ Root Beer was originally sold as a temperance drink, seen in this ad from 1893.

Bottled soda sales were also booming as companies increasingly marketed their drinks for home consumption. The crown cork, a predecessor to today’s familiar bottle cap, was invented by William Painter in 1892, finally improving sanitation and solving leakage issues with earlier corked bottles. “The bottle cap really sealed the deal, because before that the process was quite difficult and the stoppers weren’t particularly secure,” Donovan says. “Even though they could produce and fill bottles en masse, keeping them clean and the seals strong proved quite tricky. Essentially, the bottle cap was the invention that allowed bottles to get past their reputation of being faulty containers that exploded or had insects and dirt slipping into them at the factory.”

Though Coke had established a major soda-fountain presence by the late 1890s, the company’s long-term success depended on getting their drink into bottles. “At the time, Coca-Cola didn’t really like the idea of bottled drinks,” explains Donovan. “They thought bottles were dirty, and setting up bottling plants and distribution networks was very expensive, so they were better off just shipping their syrup around.” But in 1899, two entrepreneurs named Joseph Whitehead and Benjamin Thomas convinced Coca-Cola co-founder Asa Griggs Candler to give them the exclusive rights to bottle his product. Coke would soon become the greatest success of the bottling movement.

Instead of building their own bottling facilities, Whitehead and Thomas came up with a more clever solution—selling franchises to regional bottlers all over the country. “They divided the U.S. up into small territories and sold Coca-Cola bottling licenses to all these local businessmen. This meant that the company didn’t have to put any money into this huge expansion. Their biggest competitor at the time, Moxie, refused to do this and, ultimately, got left behind,” says Donovan. Additionally, Moxie’s flavor was much more tart than Coke’s, making it an outlier as mainstream sodas came to depend on more sugary recipes.

Left, early Coca-Cola ads, like this one from 1905, emphasized its energizing medicinal effects on the mind. Right, in 1921, the company promoted its soda fountain drinks with ads that outlined the best way to hand-craft a Coke.

By the end of the 1920s, more Coca-Cola was sold in bottles than served at fountains. And over the next decade, the repeal of Prohibition combined with America’s growing car culture to hasten the demise of the ubiquitous pharmacy soda fountain. “When roadside stands like Dairy Queen started opening up after World War II, they were taking customers away from soda fountains,” says Funderburg. “Americans were spending a lot of time in their cars and moving to the suburbs, so most of the drugstores on Main Street were in decline. Soda fountains were also labor intensive, while retail was moving to a self-serve model.”

The final step in Coke’s global expansion occurred during World War II, when the company declared that all American troops should have access to a bottle of Coke for 5 cents. By aggressively expanding abroad and using creative methods to deliver their products, like pop-up soda fountains, the company made good on its promise. “Obviously, that made the U.S. troops very loyal to them, but it also made Coca-Cola iconic around the world,” says Donovan. “At the end of the war, in the bombed-out cities of Europe where food was in short supply, one of the things first you might see was U.S. troops—these well-fed heroes who helped liberate you—carrying bottles of Coca-Cola. The drink became symbolic of America—and even freedom in a way. It made Coca-Cola more than just another fizzy drink.”

During the 1940s, Coca-Cola built soda fountains in far-flung locations in order to serve its drinks directly to American troops, like at this fountain in the Philippines.

Our thirst for carbonated drinks clearly didn’t evaporate along with soda shops: Instead, consumers turned to the convenience of bottled beverages, as Big Soda took over from locally crafted drinks. Following the war, many Americans purchased their first home refrigerators, further bolstering the market for bottled sodas. After being forced to remove their narcotic ingredients, sodas increasingly relied on sugar to hook their customers. And as the soda giants continued to grow, these companies tweaked their recipes to lower overall costs, turning to cheaper ingredients like corn syrup and caramel coloring.

“Coca-Cola, Dr. Pepper, Pepsi, and Moxie all started out as soft drinks that were supposed to have some medical benefit,” says Funderburg. “Nobody worried about sugar in the late 19th century. That was an era when people wanted to be plump women were supposed to be full-figured back then. Certainly, no one worried about their weight the way we do today.”

Along with new policies that restrict where sodas are sold, our growing awareness of soda’s unhealthy impact is hurting soda sales. Although the carbonated soft drink remains a remarkably American beverage (we consume around 13 billion gallons a year, or a full third of global sales), statistics show a decline in American soda purchases over the last few years. At the same time, bottled artisanal sodas have made a comeback everywhere from Whole Foods to corner bodegas. Even a few authentic soda fountains have opened in recent years to re-create the complicated drinks of yore, like Blueplate in Portland, Oregon, Ice Cream Bar in San Francisco, or Franklin Fountain in Philadelphia.

Through 1950, the ingredients for 7UP included lithium citrate, a mood-enhancer—this ad is from the 1930s.

“There’s definitely a soda movement that seems to be echoing the shift toward craft beer,” says Donovan. “People are trying to use more local, natural ingredients in contrast to the big, monolithic brands. There’s a push to make soda more real again, rather than this overprocessed, industrial thing.” Only recently have studies begun to show that sugars can be just as addictive as drugs like morphine and cocaine, making sweeteners one of the industry’s greatest challenges.

“Sugar or any kind of sweetener is quite crucial to the flavor of these drinks. Artificial sweeteners got tainted, possibly wrongfully, by their link to carcinogens. So soda has been struggling with the fact that people are distrustful of artificial sweeteners, and—let’s be frank—they don’t taste as good as sugar. The soda industry’s approach is putting a lot of faith into finding natural sweeteners that taste just as good as sugar and have no calories in them. It could be quite a game changer if they do.”

Regardless of whatever “healthy” new recipes these companies come up with, if history is any measure, they’ll probably turn out to be terrible for you.

The Franklin Fountain in Philadelphia replicates the classic soda-fountain atmosphere and vintage recipes like juleps, phosphates, and egg creams. Via thefranklinfountain on flickr.

Three Things to Know About the Craft Soda Trend in 2016

Not only has craft soda influenced the idea of brewing unique batches of soda, but it appears the craft soda trend is influencing the giants of the coffee world . What else is there to know about the craft soda trend in 2016? Here are three things to sip on…

1. Craft Soda is Not Exclusive to Independent Brands

Craft, by definition, refers to an activity involving skill in making things by hand. So in the case of craft soda, there isn’t a governing presence that formally defines the trend. Craft beer for example, has the Brewers Association, which has criteria including batch quantity to give definition to the industry. What that means for craft soda is that it’s up for interpretation. Defining craft in soda making is defined as products that are:

  • Authentic
  • Higher quality
  • Differentiated experience
  • Premium priced
  • Local

Many bottlers adhere to a small batch mentality, creating a unique recipe with intentional ingredients, flavor profiles, and packaging. And it’s not just the small, independent brands like Virgil's or Bruce Cost Ginger Ale adding to the ever-increasing selections of craft soda in the marketplace, but national giants like Pepsi have introduced their own lines of specialty sodas. Imitation is the highest form of flattery. PepsiCo started selling bottles of Caleb’s Kola this fall, as well as Dewshine from Mtn. Dew, a clear version of its popular namesake. While both of those flavor profiles favor the brand’s already established and bestselling soda recipes, the company is releasing a line of craft soda called Stubborn Soda in flavors like black cherry with tarragon, orange hibiscus, pineapple cream, and agave vanilla cream.

2. Craft Soda isn’t a New Concept

People have been enjoying Pepsi Cola since the late 19 th century. Peruse the shelves of any antique store or flea market and you’ll find decades worth of soda nostalgia. Before prohibition, nearly every single town and city despite population had its own brewery or bottling works operation. Back then, it was cheaper to build a local facility than it was to obtain distribution from outsiders. And in order to maximize the productivity of the facility’s operation, most bottlers added soda to their production. So for many fans of craft soda, the trend is nostalgic to them.

Traditional flavors like ginger ale, root beer, sarsaparilla or cream soda, and orange continue to do well in the market place likely due to that sentiment. Another reason the craft soda trend continues to represent its piece of the $77 billion-per-year soda market is due in part to what’s on the label – rather, what’s not on the label, like artificial colors or high fructose corn syrup. The transparency of brands helps demystify what’s in soda, encouraging people to enjoy their selections with the abandon of their ancestors decades ago.

3. Craft Soda is an Experience, not a Habit

Jonathan Texeira, co-owner of the Batch Craft Soda brand said, “People like soda. Occasionally, they’re gonna want a root beer, say, once or twice a week, and when they do, they would like to have a really good root beer.” This mentality falls in line with what craft beer has done for the beer industry – proved that consumers demand an overall better drinking experience. Because soda (like beer) isn’t always an every day phenomenon for many people, the products have to emulate that almost destination-like experience for drinking.

Take Stubborn Soda as it prepares to launch in 2016. The brand is “stubborn for good reason,” citing this mission statement:

Sometimes you have to be a pain in the ass to make something really good.
We make soda the way it should be made and we don’t compromise when it comes to ingredients and flavors.
We do it for ourselves, pouring our heart and soul into making the best thing we know how.

Watch the video: Amazing Soda Making Tachnique Tasty Extreme Soda. Indian Street Food (November 2021).